Are out-of-pocket medication charges alarming? Understand the public hospital drug formulary in one article

In Hong Kong, public hospitals receive government subsidies and medical fees are much cheaper than at private hospitals, which has led some people to develop a “rely on the government when ill” mindset. However, medical and drug costs in public hospitals can also be quite staggering, especially when treatments require medications that are not government-subsidized. Therefore, understanding how the “Drug Formulary” system works, and the funding safety net behind it, is essential for patients and their families.

When you visit a public hospital, why are some medicines almost free while others require out-of-pocket payment? It all stems from the "Drug Formulary" system established by the Hospital Authority (HA).

Since 2005 the HA has implemented the "Drug Formulary", standardising medication policies and prescribing across all public hospitals and clinics to ensure patients are prescribed cost-effective, safety-validated, and effective medicines. Some medicines on the Formulary receive government subsidies, so the charges are low; however, if patients need medicines that are not subsidised by the government, they must bear the cost themselves.

The HA regularly evaluates new medicines and updates the Formulary each quarter (January, April, July and October every year).
 

The "Drug Formulary" currently contains over 1,500 medicines, mainly divided into three categories: General Drugs, Special Drugs, and self-financed drugs that receive safety-net funding.

General Drugs

General Drugs are the most commonly used medicines in the public hospitals’ drug stock, including antihypertensives, antidiabetics, antibiotics, analgesics, etc. These medicines have been proven appropriate and effective for patients’ clinical conditions and are available for widespread use; this category accounts for about 80% of the formulary. Patients only need to pay the standard drug fee (currently HK$15 per item, for up to 16 weeks) to receive a prescription.

Special Drugs 

Special Drugs are medicines prescribed for use in specific clinical circumstances after clinical assessment by a specialist, for example certain cancer targeted therapies and orphan drugs. These medicines are prescribed for particular clinical applications, and public hospitals and clinics will charge the standard fee of HK$15 per item. However, if an individual patient chooses to use a Special Drug outside of its specified clinical application, they must pay for the medicine themselves.

Self-financed Drugs 

These medicines have been shown to have significant therapeutic effects but, based on cost-effectiveness considerations, were not included in the General or Special drug lists after review. They are generally very expensive and must be purchased by patients at their own expense; examples include orphan drugs and new medicines. However, the Hospital Authority will still provide drug-cost assistance to patients who need these medicines and are financially disadvantaged through safety-net schemes such as the Samaritan Fund and the Community Care Fund Medical Assistance Programme.

If you want to learn about the medicines in the "Drug Formulary", you can click here to view the complete list of the "Drug Formulary".
 

In order to help patients with financial difficulties cope with expensive medication costs, the Hospital Authority has two main subsidy schemes——the "Samaritan Fund" and the "Community Care Fund Medical Assistance Programme", which together form Hong Kong's drug safety net.

Samaritan Fund 

The Samaritan Fund covers self‑financed medicines from various specialties, including haematology, rheumatology, neurology, oncology, endocrinology, dermatology and a small number of drugs for treating rare diseases. Patients in need who wish to apply for assistance must be assessed and referred by their attending doctor, then undergo a financial assessment by a medical social worker, and have their application approved by staff at the fund's office before they can receive full or partial medical subsidies. Patients receiving Comprehensive Social Security Assistance (CSSA) are exempt from the financial assessment.

Community Care Fund Medical Assistance Programme 

The Community Care Fund Medical Assistance Programme covers certain self‑financed cancer drugs that are not yet included in the Samaritan Fund but have rapidly accumulated clinical evidence and relatively higher cost‑effectiveness, for example drugs that treat specific types of cancer. Applicants are also required to undergo a financial assessment.

According to Legislative Council documents, in the 2023–24 financial year the Samaritan Fund and the Community Care Fund Medical Assistance Programme provided drug subsidies of about HK$1.05 billion and HK$860 million for patients, respectively.
 

If a patient wishes to apply for the Samaritan Fund or the Community Care Fund Medical Assistance Programme, they must undergo a financial assessment. The authorities will assess, on a household basis, the income, expenses and assets of the patient and core household members living with them, and calculate the "Annual Disposable Financial Resources" (ADFR). The Hospital Authority will then use a set of cost-sharing rate tables to determine the patient's maximum contribution. In general, the stronger a household's financial capacity, the higher the proportion of drug costs they are required to bear. The maximum cost-sharing rate is 20% of the patient's ADFR, and the patient's contribution remains unchanged regardless of the drug cost.

To make this easier to understand, we assume the following example and use the Hospital Authority's financial assessment calculator to run the numbers.

For example, a four-person family has to bear HK$700,000 a year in targeted drug costs. Suppose their monthly household incomes are HK$80,000 and HK$160,000 respectively, and their household assets are HK$700,000 and HK$1,500,000 respectively. Roughly speaking, their monthly allowable deductions are both HK$40,000. If they successfully apply for assistance, how much of the drug costs would they have to pay themselves?

According to the table above, Patient A and Patient B's maximum annual cost-sharing are estimated to reach HK$106,000 and HK$378,000. The monthly shares are about HK$8,833 and HK$31,533, accounting for approximately 11% and 19.7% of monthly household income, respectively. Even for a middle-class family, affording this would likely be quite difficult. Of course, the actual approval and subsidy amounts need to be handled by the medical social worker.

Although the “Drug Formulary” and the related subsidy safety net provide citizens with basic medical protection, reflecting the spirit of “healthcare for all,” this safety net is not万能. When treatment requires drugs beyond general and specialized medicines — especially some new and expensive self-financed drugs — not all families meet the financial thresholds for subsidies. For citizens who fail the review, or whose financial situation places them in the “squeezed middle,” heavy drug expenses can at any time become a burden that breaks the family. Therefore, it is particularly important to plan ahead and purchase suitable medical insurance, so that patients have more treatment options when needed without worrying about drug costs.

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Sources: Hospital Authority, Legislative Council documents

Further reading:
Old-style medical insurance not enough? Three ways to cope with rising healthcare costs in Hong Kong
[Secret Weapon Against Claim Denials] Medical insurance "full reimbursement" — does it cover everything? The "medically necessary" clause you must know
What is targeted therapy? Can it treat cancer? Learn about the mechanism, types, and effects
 

Article last updated: 16 June 2025

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.