While Hong Kong occupies a relatively small geographic area, its health system impacts more than 7 million individuals. In Hong Kong, the government is the primary healthcare provider, covering more than 95 percent of the total medical expenditures at a low, flat rate for its population. Notably, this highly regulated system can support most; however, citizens do have the option to pay out-of-pocket and seek medications and services outside of the standard of care.
Hong Kong’s Payer Stakeholders
While Hong Kong is a special administrative region of the People’s Republic of China, its prescription drug approval and reimbursement systems are different. Within Hong Kong, the Department of Health (DH) is responsible for overseeing the safety, efficacy, and quality of all medicines available in the region, including innovative drugs and Traditional Chinese Medicine products. For a new drug to enter Hong Kong’s market, it must first be registered with the Pharmacy and Poisons Board (PPB), which issues a registration number and classification for the new pharmaceutical product.
There are three classifications for innovative (Western) medicines; these categories impact where a drug can be sold and under what conditions.
- Category 1: Medicines that require a doctor’s prescription and can only be sold in a registered pharmacy under the direct supervision of registered pharmacists. These drugs are used to treat serious diseases, or for drugs where an incorrect dosage could lead to serious health risks.
- Category 2: Medicines in this category do not require doctor’s prescription but must be sold in registered pharmacies under the supervision of a pharmacist as their method of use or dosage may result in a health risk.
- Category 3: Medicines in this category can be sold in pharmacies or medicine stores without resident pharmacists. These are sold as over-the-counter medicines.
For Traditional Chinese Medicine, the Chinese Medicine Ordinance determines approvals and sets separate categories of classification:
- Schedule 1 Medicines: These medicines can only be sold with a prescription issued by a registered Chinese medicine practitioner. These medicines often contain toxic ingredients.
- Schedule 2 Medicines: These medicines are considered safe with no prescription needed for purchases.
Important Points to Keep in Mind
Once a drug is registered and approved, the Hong Kong government does not impose any pricing regulations in the private sector. However, The Hospital Authority (HA), public healthcare service provider for more than 90 percent of Hong Kong citizens, establishes the standard of use and cost for prescription drugs for those under its service.
In order for a prescription drug to be available in the Hospital Authority (HA), the Drug Advisory Committee (DAC) must first evaluate and approve the drug for inclusion on the Hospital Authority Drug Formulary, listing standardization of drugs and drug use policies for cost-effect patient care. The DAC reviews several drug criteria before approval, specifically drug information, safety, efficacy, cost effectiveness, international guidelines, advancements in technology and disease state.
Based on the drug criteria and utilization, the drug is either rejected or approved for the HA Drug Formulary and placed into one of four categories.
- General drug: These are drugs with established indications and cost-effectiveness that are available for general use as indicated by patients with relevant clinical conditions and provided at standard fees and costs in public hospitals and clinics.
- Special drugs: These medicines are used under specific clinical conditions under specialist authorizations. These drugs are also provided at standard fees but only for patients who meet a specific clinical condition.
- Self-financed Items (SFIs): These drugs provide a significant clinical benefit but are extremely expensive for the HA to provide as part of its standard services. Therefore, these drugs can only be purchased by patients at their own expense. However, these drugs often have safety nets that provide subsidized funds for patients with financial difficulties.
- SFIs without safety nets: These are drugs with preliminary medical evidence only, with marginal benefits over available alternatives at significantly higher costs, as well as lifestyle drugs. These drugs must be purchased at the patient’s expense.
Outside of the Hospital Authority (HA) system, there are several private health system options available to patients should they choose, albeit at higher costs to the patient.
Implications for Industry
In recent years, Hong Kong’s Hospital Authority has been under pressure to increase its scope of prescription drug coverage as more drugs are made available for rare diseases, but not to the conditions covered under the HA’s system. For example, in 2017, the HA refused to reimburse Afinitor, which had received market approval the year prior. Due to high costs of the tuberous sclerosis complex medicine, the HA refused to support the drug’s reimbursement, leading to patient deaths. Pharmaceutical companies with drugs for rare disease and some cancer drugs have now turned to public funds to support patients who need to financially subsidize treatment.
Pharmaceutical companies launching new products in Hong Kong should not only be prepared for presenting a strong clinical case to the Pharmacy and Poisons Board (PPB) but also an economic case to the Hospital Authority to reach the largest patient population.
Having a strategy to communicate value not just with the PPB, DH, and the HA is critically important. GLOBALHealthPR can help you demonstrate and effectively communicate the value of your new product to the Hong Kong market in innovative but compliant ways.
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