Objective: To analyze the impact of national volume-based procurement policy on drug utilization and expenditure. Methods: The drug procurement data from 2018 to 2019 was collected. The Difference-in-Difference(DID) model was used to compare the changes that occurred in centrally-purchased drugs and alternatives in terms of price, purchasing volume, purchasing expenditure, and the ratio of good-quality drugs. Results: After the implementation of the national volume-based procurement policy, the price of centrally-purchased drugs decreased by 72.2 %, the volume increased by 16.9 %, the procurement cost decreased by 55.3 %, and the ratio of good-quality drugs increased by 15 percentage points (all P＜0.01 ). Conclusion: The volume-based procurement policy is conducive to the medicine expenditure containment and the improvement of medicine quality. It is necessary to select more drugs into the volume-based procurement process, including Chinese patent medicines and biosimilars.