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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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