Authors (including presenting author) :
Li HYC(1), Suen LHH(1), Mang KWK(1), Young WMG(1), Chui CMW(1), Wong YC(1), Tang YHS(2), Cheung FCE(3), Cheung TFI(4), Kwan WMG(5), Sin NC(6), So WY(7)
Affiliation :
(1) Cluster Services, Hospital Authority Head Office (2) Prince of Wales Hospital (3) Queen Elizabeth Hospital (4) Yan Chai Hospital (5) Caritas Medical Centre (6) Alice Ho Miu Ling Nethersole Hospital/Tai Po Hospital (7) North District Hospital
Keyword 1: :
Health technology assessment
Keyword 2: :
Drug pricing
Keyword 3: :
Price negotiation
Keyword 4: :
Cost evaluation
Keyword 5: :
Drug utilization review
Keyword 6: :
Resource allocation
Introduction :
Drug pricing and financial sustainability have become a critical concern for healthcare systems worldwide. Leading health technology assessment (HTA) agencies have increasingly integrated price negotiation into their reimbursement decision-making frameworks. Notable examples include agencies in Chinese Mainland, Australia and Canada, where negotiation success rates routinely exceed 60%, with achieved price reductions ranging from 21% to 96%. These outcomes translate into substantial fiscal savings while maintaining clinical access.
In this context, the Hospital Authority (HA) established a Cost Assessment Panel (CAP) to systematically evaluate drug costs and leverage negotiation opportunities to optimize resource allocation while maintaining equitable patient access.
Objectives :
The primary objectives of the Cost Assessment Panel (CAP) are to prioritize resources for high-impact drug applications and to secure the most favorable offers from pharmaceutical companies. This involves conducting comprehensive cost evaluations for new drug applications, negotiating potential adjustments and discounts, and identifying cost-reduction opportunities for existing contract items based on Drug Utilization Reviews (DUR) by the Drug Management Committee (DMC). Ultimately, the CAP aims to maximize benefits for patients and the HA by achieving optimal drugs costs while maintaining access to essential and innovative medications.
Methodology :
The CAP was initiated as a trial phase in May 2024 and, from January 2025 onwards, has been incorporated as a standing process. Routine meetings were held prior to each Drug Advisory Committee (DAC) meeting, with additional ad hoc meetings convened as required.
Based on the defined framework, the panel conducts structured cost evaluations on drug proposals based on their per-patient treatment costs, total yearly expenditures, and annual budget impact on the HA. Applications demonstrating high per-patient treatment costs and significant net budgetary impact are systematically referred to CAP for comprehensive evaluation. This process is supported by health economists from local universities, who conduct localized cost-effectiveness and budget impact analyses using Hong Kong-specific data. The CAP subsequently formulates evidence-based recommendations on pricing and managed entry terms to facilitate direct negotiations with pharmaceutical companies.
Result & Outcome :
As of January 2026, the CAP reviewed over 90 drug applications. Successful price negotiations were concluded in 77% of cases. The mean price reduction achieved was 16.4% (range: 2.67%–50%), with several applications securing additional risk-sharing agreements or volume-based discounts.
These outcomes are expected to generate annual savings of around HKD 150 million for drugs listed in the HA Drug Formulary, demonstrating the effectiveness of a dedicated cost-focused panel in prioritizing high-impact applications and driving substantial price concessions for high-impact drugs. The resulting sustainable framework strategically reallocates savings to broaden the safety net coverage, directly enhancing patient access to a wider variety of essential and innovative medicines.
