Replies to LegCo questions
LCQ1: Drug procurement policy of Hospital Authority
Following is a question by the Hon Chan Yuen-han and a reply by the Secretary for Health, Welfare and Food, Dr York Chow, in the Legislative Council today (October 18):
Question:
Regarding the policy on the procurement of drugs by public hospitals, will the
Government inform this Council whether it knows:
(a) the number of pharmaceutical companies which supply drugs to public
hospitals at present, and the respective proportions of the drugs supplied by
various pharmaceutical companies;
(b) the mechanism and criteria adopted by the Hospital Authority ("HA") for
procuring drugs which have the same efficacy but are manufactured by different
pharmaceutical companies; and
(c) if any review mechanism is in place to monitor the mechanism for procuring
drugs by public hospitals; if so, of the details; if not, how HA monitors and
prevents incidents involving acceptance of advantages?
Reply:
Madam President,
(a) Currently there are more than 200 pharmaceutical companies supplying some 3
000 drug items to the Hospital Authority (HA). In 2005-06, drugs supplied by 50
of the pharmaceutical companies accounted for 85% of the HA's total drug
expenditure. The share by these companies individually ranged between 9.25% and
0.20%. Some pharmaceutical companies have accounted for a larger share of HA's
expenditure on drugs mainly due to the fact that they have successfully
developed innovative drugs that merited patent protection. Since other
pharmaceutical companies cannot manufacture these drugs within the period of
protection, prices for patented drugs are normally higher.
Pharmaceutical companies have to invest significant amounts of resources in the
development of new drugs. If not for the protection of patents, they may not be
able to recover their costs. Therefore, it is common around the world that
pharmaceutical companies would charge higher prices for patented drugs, and it
is not something that we can avoid.
(b) Generally speaking, for high value procurement of commonly used drugs in
large quantities, the HA would make use of single tenders for patented drugs and
open tenders for non-patented drugs. The HA would normally sign a supply
contract with the successful bidders for a term of 12 or 24 months.
As the major provider of public health care services in Hong Kong, the HA has
always respected intellectual property rights. In the procurement of patented
drugs, the HA will carefully verify relevant patents to ensure that sufficient
justification exists for the use of single tenders. In respect of drugs for
which patent protection has already expired, the HA will switch to the use of
open tenders for their procurement, so as to allow other manufacturers to
compete for the supply contracts. This is to ensure the opening up of the market
in a timely manner and lower the cost of medical services.
For the evaluation of drugs manufactured by different pharmaceutical companies,
the Department of Health (DH) and the HA have a common drug procurement policy
to ensure that the quality and standards of drugs used in the public health care
sector of Hong Kong will not be adversely affected by the introduction of
generic alternatives. The evaluation of drugs is the responsibility of the Drug
Selection Committee, which comprises representatives from both HA and DH,
university professors, and clinical experts and pharmacists from the private
sector. The committee will follow the aforementioned drug procurement policy in
the evaluation and selection of drugs manufactured by different pharmaceutical
companies through a tendering process.
(c) Not only is the drug procurement mechanism a matter subject to the scrutiny
of HA's Internal Audit Department, the Independent Commission Against Corruption
also conducts assignment studies from time to time to prevent incidents
involving acceptance of advantages from happening.
Ends/Wednesday, October 18, 2006
Issued at HKT 12:23
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