Hong Kong Pharmaceutical Industry Association Executive Director Sabrina Chan On Competition and R&D in Hong Kong: An Interview with PharmAsia News (Part 2 of 2)

Hong Kong, with a population of just under 7 million and long known for its status as one of the most open markets in the world, can be a challenging market for pharma companies because roughly half of the drugs sold in the Special Administrative Region of China go through its Hospital Authority. It can take up to three years to get an approved product on its list of available products. The Hong Kong Association of the Pharmaceutical Industry, which represents 42 companies including multinational companies that operate in Hong Kong, is fighting to cut through the red tape and get innovative drugs to patients faster while trying to stay on top of a stubborn counterfeit problem, Executive Director Sabrina Chan told PharmAsia News' Hong Kong bureau in an exclusive interview.

[Editor's note: This is part two of a two-part interview. (Also see "Hong Kong Pharmaceutical Industry Association Executive Director Sabrina Chan On Competition and R&D in Hong Kong: An Interview with PharmAsia News (Part 1 of 2)" - Scrip, 20 Nov, 2008.) appeared in PharmAsia News, Nov. 20, 2008.]

PharmAsia News: Overall, how is the Hong Kong pharma industry faring? Would you say it is working well?

Chan: Yes and no. We couldn't say it is almost ideal because the government budget for drugs is not as extensive as it should be for patients. Almost 90 percent of patients in Hong Kong use public hospital facilities.

The HA has a drug formulary. If one of our members wants to get a new product listed, they first have to get centralized approval from the HA's Drug Advisory Committee, which meets quarterly. But this is only the beginning. Afterwards, they have to go to each of the 41 individual HA hospitals for a second committee review in order to get the new product on a formulary at a particular HA hospital and have the product available. The whole process takes more than 30 months on average.

If you think about the patent life of a drug, it is 20 years, most of the time. It takes an average of 10 to 12 years to create a drug. After that, approvals by the U.S. FDA and other regulatory agencies are required. Afterward, when companies want to launch new products in Hong Kong they have to go through a very long enlistment process at HA, so the marketing life is just a few years at the end. We can immediately go to the private hospitals but that's [only] 10 percent of patients.

PharmAsia News: How does this compare with other countries?

Chan: Every country has different barriers. In China everything takes a long time. Japan requires extensive local clinical trials. Hong Kong has a secondary approval approach but why can't unnecessary and redundant administrative barriers be removed?

I should say, looking at the registration process, we are very efficient. Hong Kong is one of the most efficient countries in the world… but it takes too much time to introduce a new drug in the HA system. Sometimes more than three years. It is unfair to patients if some hospitals bring in a new drug [and not others]. The quality of care through the HA system should be consistent and HA should not be excluded from the Competition Law.

We know they need a system because it is public funding but can we enhance the system? Maybe we can. There is some duplication.

Good medication can always increase the quality of care. …

From our perspective, if the drug is really good for patients, if it is really innovative, it is sometimes introduced in Hong Kong [even if it is not in the formulary]. Sometimes the private market goes faster than HA.

PharmAsia News: Are there any other big hurdles the association is working to overcome?

Chan: We still have a counterfeit problem. The situation is much better than a lot of developing countries but from time to time we have singled out cases. The problem are the low penalties.

According to our records, most cases are fined between HKD 5,000 to HKD 50,000 [$645 to $6,450].

PharmAsia News: How big is the drug counterfeit problem in Hong Kong?

Chan: How do you define big? You talk about the number of raids? You talk about the number of thefts? Even if it happens once it is too much because it is a public safety issue. It delays treatment. It even causes harmful effects. We really think increased penalties would be a deterrent in this issue.

Thinking about it, one tablet is too much. I don't want to identify this as a big or small problem.

Hong Kong is a trans-shipment center [and] because Hong Kong is a free trade area and has a good name, it just goes through Hong Kong to other places. Hong Kong is such a busy harbor.

Customs and Excise has a unit dedicated to counterfeiting and the industry works very closely with C&E on this issue. We have a good partner, and we work very well. We have regular raids [and] we have liaison officers to support the operations.

But, in the end, even though it is a successful raid and it goes to the courts, the penalty is such a low penalty.

We are actively doing raids in specific areas to do some searches. These types of operations are very good deterrents.

PharmAsia News: Have you seen counterfeiting go down at all as a result of these efforts?

Chan: It is difficult to tell from these raids. According to the number of raids, we see it is an ongoing issue. ... It is difficult to say if it goes up or down. But the government has the same issue because it is harmful to health.

PharmAsia News: Are there any other issues affecting the industry?

Chan: Our industry is also looking at health care financing to proactively solve the problem with HA. We agree with some kind of copayment.

In the HA drug formulary they have a category called self-financing. If the patient has enough money to pay by himself, he can choose the standard item or the self-financing item.

They call them expensive with marginal benefits. The problem is, what is the definition of essential if you're a cancer patient? Some good cancer drugs are in the self-financed category. The definition of essential drugs is impossible. In Hong Kong, the self-financed drugs concentrate on things like cancer drugs, which are more expensive.

- Alfred Romann ([email protected])