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Following is a question by the Hon Andrew Cheng and a written reply by the Secretary for Food and Health, Dr York Chow, in the Legislative Council today (May 12):
Question:
It has been recently reported that some pharmacies have substantially raised the prices of certain drugs, which has resulted in the increase in the burden of drug expenses on patients who need to take for long periods self-financed drugs prescribed by public hospitals and clinics under the Hospital Authority (HA), and some of the patients have been forced to reduce the frequency of taking drug, so as to relieve their burden. In this connection, will the Government inform this Council whether:
(a) it knows the number and percentage of patients who had been prescribed self-financed drugs by public hospitals and clinics under HA last year and, among such patients:
(i) the respective percentages of those who had been prescribed special drugs, drugs with safety net and drugs without safety net;
(ii) the number of those who are chronically ill; and
(iii) the number of those who purchased self-financed drugs through HA and the expenses concerned;
(b) it knows the difference between the average price and the average cost of self-financed drugs provided by HA last year; of the profit derived by HA and how the profit was used; whether HA had increased the prices of self-financed drugs it provided last year; if so, details of the increase; if not, the reasons for that; and
(c) the authorities had collected information to track the increases in drug prices in the private market last year; whether it knows if HA will relax the limits on income and assets for applications to the Samaritan Fund for subsidies in response to the increases in drug prices, so as to relieve the burden on patients of purchasing self-financed drugs and prevent them from falling into poverty because of illness?
Reply:
President,
The Drug Formulary (the Formulary) has been implemented by the Hospital Authority (HA) in public hospitals and clinics since 2005. The main objective is to ensure equitable access by patients to cost-effective drugs of proven safety and efficacy through standardisation of the drug policy and drug utilisation in all HA hospitals and clinics.
At present, there are about 1,300 standard drugs in the Formulary. They can be classified into two categories, namely general drugs and special drugs. General drugs constitute around 80% of all standard drugs. These drugs have well-established clinical indications and effectiveness and are available for general use. HA charges standard fees and charges when providing these drugs. Special drugs constitute around 20% of all standard drugs. These drugs are to be used under specified clinical conditions with specific authorisation by specialist doctors. Patients who meet the specified clinical conditions and are prescribed with special drugs will be provided with the drugs at standard fees and charges by HA. For patients who do not meet the specified clinical conditions but choose to use specific special drugs, they may still be prescribed with such drugs after passing the assessment by doctors and they would have to pay for the drugs as self-financed items.
Having regard to the considerations of evidence-based medical practice, targeted subsidy and opportunity cost, patients have to purchase those drugs which are not standard drugs in the Formulary at their own expense. These self-financed drugs can be classified into drugs covered by the safety net and drugs not covered by the safety net. Drugs covered by safety net are those proven to be of significant benefits but with significant cost burden for HA to provide. Patients who need these drugs and can afford the costs have to purchase the drugs at their own expense. Meanwhile, we provide a safety net through the Samaritan Fund to subsidise the drug expenses of patients who need the drugs but have financial difficulties. Drugs not covered by the safety net include drugs which have preliminary medical evidence only; drugs with marginal benefits over available alternatives but at significantly higher costs; and life-style related drugs (e.g. weight-loss drugs). Patients have to purchase drugs not covered by the safety net at their own expense.
The reply to various parts of the question is as follows:
(a) In 2008-09, HA prescribed self-financed drugs to about 90,000 patients, around 3% of the total number of patients in HA. We do not yet have the information for 2009-10.
In 2009-10, a total of 39,385 patients purchased self-financed drugs through public hospitals. The total drug expenditure involved was $752 million. Among these drugs, special drugs (prescribed under conditions which are beyond the specified clinical conditions) accounted for 57%, self-financed drugs covered by the safety net accounted for 8% and self-financed drugs not covered by the safety net accounted for 35%. As at December 31, 2009, a total of 742 HA patients were subsidised by the Samaritan Fund for using self-financed drugs covered by the safety net. The expenditure involved was about $70 million.
HA has not compiled statistics on the number of chronic patients who purchased drugs at their own expense. Basically, chronic patients can receive appropriate treatment with general drugs and special drugs provided by HA at standard fees and charges which are highly subsidised. Nevertheless, under suitable clinical conditions, individual patients may also choose other feasible treatment options, including using self-financed drugs for treatment.
(b) At present, HA supplies three categories of self-financed drugs for purchase by patients. These include items not easily accessible in the community pharmacies, items covered by the safety net, and items that need to be supplied for operational convenience (e.g. injection drugs).
HA provides self-financed drugs to patients at cost. The at-cost price includes the cost of the drug itself, which is determined by the average price at which various hospitals purchase the drug each month; and the administrative cost in handling the drug, with the dispensing charge for each drug item set at $50 at present. HA does not make any profit in supplying self-financed drugs.
The contractual purchase price of each drug will be adjusted upwards or downwards from time to time in the light of market conditions. It is difficult for HA to generalise the changes in drug prices in the past year.
(c) HA makes bulk purchases of drugs through contract and provides drugs to patients at standard fees and charges or at cost. It has not collected information on the sale and price movements of drugs in the private market.
HA uses the Samaritan Fund as a safety net to provide full or partial drug subsidies to patients who have financial difficulties in paying the drug expenses and require the use of specific drugs which are proved to be of significant benefits but not covered by HA's standard fees and charges. With subsidy under the Samaritan Fund, patients' contribution to the drug expenses is fixed as a proportion of their disposable financial resources and the proportion is capped at 30%. This is to ensure that patients can largely maintain their quality of life even if they have to purchase more expensive drugs for treatment.
In determining the level of contribution by patients to drug expenses, the Fund looks at their annual disposable financial resources as an indicator in considering their affordability. The amount of annual disposable financial resources of patients is derived by deducting the allowable deductions from their annual household gross income and adding the household disposable capital.
Personal allowance is one of the allowable deductions. The amount is adjusted once a year based on the Consumer Price Index (A) and further adjusted once every five years based on the results of the latest household expenditure survey conducted by the Census and Statistics Department of the Government. This calculation model and the corresponding adjustments help us take the impact of rising prices on the living expenses of patients into consideration when assessing their affordability.
Ends/Wednesday, May 12, 2010
Issued at HKT 15:16
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