Three Steps to Improve Drug Introduction, Retain Pharma Companies, and Root Them in Hong Kong
Three Steps to Improve Drug Introduction, Retain Pharma Companies, and Root Them in Hong Kong
The source text is in Chinese. This English version is for reference only. In case of any discrepancy between this English version and the Chinese version, the Chinese version shall prevail.
The Hospital Authority's "Office for the Introduction of Innovative Drugs and Medical Devices" (hereafter "the Office") recently began formal operations. Tasked with proactively identifying local clinical needs and accelerating the entry of innovative drugs and devices into the public healthcare system, the Office represents a critical step in deepening Hong Kong's biomedical strategy.
In recent years, the SAR Government's investment promotion efforts have yielded impressive results. In just over three years since its establishment, the Office for Attracting Strategic Enterprises has brought in 124 key enterprises, with planned investments exceeding HK$73 billion and the creation of approximately 25,000 jobs — including five of the world's top ten pharmaceutical companies.
Three Key Considerations for Pharma Siting; Eli Lilly Reportedly Exits Hong Kong
Yet US pharmaceutical giant Eli Lilly recently made headlines with reports of winding down its directly operated business in Hong Kong. On one hand, mechanisms are being refined and companies continue to set up here; on the other, individual pharma firms are restructuring their Hong Kong operations. This serves as a timely reminder: while Hong Kong has laid the groundwork for attracting and retaining pharmaceutical companies, maintaining a leading edge amid regional competition still demands continuous improvement.
Eli Lilly is one of the world's most valuable pharmaceutical companies, with its GLP-1 drugs Mounjaro and Zepbound dominating the global diabetes and obesity markets. The restructuring of a multinational pharma firm's Hong Kong operations offers an opportunity to examine the site-selection logic of global drug companies. Generally, a pharma company's decision to establish a directly operated presence in a given location hinges on three considerations: whether drugs can efficiently enter the local healthcare system, market size and growth potential, and the location's strategic value as a regional hub.
Assessed against these criteria, Hong Kong's strengths are clear: world-class healthcare and research capabilities, robust intellectual property protections, and the free flow of capital and talent. Moreover, the city plays the role of "super connector" and "super value-adder" linking the Mainland with the international community.
Yet despite these advantages, shortcomings cannot be ignored. The local market is limited in scale — a population of roughly 7.5 million alone can hardly sustain directly operated structures. Furthermore, the process of listing drugs on the Hospital Authority's Drug Formulary is lengthy, and approval transparency has room for improvement, meaning some innovative drugs fail to reach patients within an ideal timeframe. These structural factors are precisely what pharma companies must weigh when making their calculations.
To its credit, the SAR Government's reforms in drug introduction have shown tangible progress in recent years. Since the implementation of the "1+" approval mechanism in 2022, 21 new drugs have been approved, of which 7 have been successfully listed on the Hospital Authority's Drug Formulary. The newly established Office proactively identifies needs, engages early with pharma companies on pricing negotiations, and prioritises recommending eligible new drugs for formulary listing — reducing the review period for cancer drugs from up to 150 working days to within 100, a reduction of more than one-third. Meanwhile, the Office works in concert with the "1+" mechanism, the Greater Bay Area International Clinical Trial Institute, and the soon-to-be-established Centre for Medical Products Regulation (CMPR), progressively strengthening Hong Kong's dual role as a biomedical "super connector" and "super value-adder."
Although Hong Kong's institutional framework has taken shape, there remains room for improvement when measured against the practical operational needs of pharma companies. The Eli Lilly episode signals an opportunity for Hong Kong to elevate its game in three key areas.
Optimise the Drug Formulary; Leverage Greater Bay Area Advantages
First, enhance the efficiency and transparency of the Drug Formulary mechanism. Innovative drugs must be listed on the Hospital Authority's Drug Formulary before they can be widely used in public hospitals — this is a critical threshold. Currently, while the main reasons for rejection are disclosed publicly (such as insufficient cost-effectiveness), the specific evaluation criteria and calculation methodologies still lack greater transparency for external stakeholders, and reapplication may take considerable time. It is recommended that the Hospital Authority further clarify its evaluation rationale, make good use of the streamlined direct application channel, and strengthen two-way communication with pharma companies. At the same time, the system should avoid over-reliance on short-term fiscal indicators, enabling innovative drugs to benefit patients more smoothly while bolstering industry confidence in the system.
Second, leverage data and the Greater Bay Area's clinical advantages to connect the "data–application–registration" chain. The Hospital Authority holds Hong Kong's most comprehensive electronic medical records database, which is of immense real-world data value to multinational pharma companies. In coordination with the Hetao Zone, Hong Kong should promote the secure and compliant cross-boundary flow of biological samples and data, building a high-quality clinical research base. Simultaneously, by capitalising on the "Hong Kong-Macau Drug and Device Connect" policy — which allows Hong Kong-registered drugs to be used at designated institutions in the Greater Bay Area — real-world data can be accumulated and fed back into the approval process and indication expansion. The government should proactively assist pharma companies in interfacing with both the "Drug and Device Connect" mechanism and local data systems, creating a virtuous cycle of "register in Hong Kong – apply in the GBA – data flows back – approvals refined."
Strengthen Regional Headquarters Functions to Cover Asia
Third, strengthen regional headquarters and market expansion functions to enhance pharma companies' long-term willingness to stay. Hong Kong's strategic value lies in serving as the operational headquarters from which multinational pharma companies cover Asia. The government should optimise tax incentives, talent attraction, and intellectual property protection policies — for instance, offering tax breaks for regional R&D centres or Asia-Pacific headquarters. At the same time, the Office should hold regular policy dialogues with Hong Kong-based pharma companies, proactively understanding their pain points in market access, clinical trials, and supply chains, and providing one-stop coordination services. This would ensure that pharma companies not only "set up shop" but truly "take root" in Hong Kong, using the city as a fulcrum to radiate across regional markets.
Eli Lilly's restructuring of its Hong Kong operations reflects the dynamic trade-offs inherent in multinational pharma companies' global strategies, and reminds us that the gap between refining mechanisms and meeting industry needs must be continually narrowed. So long as Hong Kong pursues relentless improvement across every link — from approval and formulary listing to market support — it will consolidate its position as an international hub for healthcare innovation.
The source text is in Chinese. This English version is for reference only. In case of any discrepancy between this English version and the Chinese version, the Chinese version shall prevail.
The Hospital Authority's "Office for the Introduction of Innovative Drugs and Medical Devices" (hereafter "the Office") recently began formal operations. Tasked with proactively identifying local clinical needs and accelerating the entry of innovative drugs and devices into the public healthcare system, the Office represents a critical step in deepening Hong Kong's biomedical strategy.
In recent years, the SAR Government's investment promotion efforts have yielded impressive results. In just over three years since its establishment, the Office for Attracting Strategic Enterprises has brought in 124 key enterprises, with planned investments exceeding HK$73 billion and the creation of approximately 25,000 jobs — including five of the world's top ten pharmaceutical companies.
Three Key Considerations for Pharma Siting; Eli Lilly Reportedly Exits Hong Kong
Yet US pharmaceutical giant Eli Lilly recently made headlines with reports of winding down its directly operated business in Hong Kong. On one hand, mechanisms are being refined and companies continue to set up here; on the other, individual pharma firms are restructuring their Hong Kong operations. This serves as a timely reminder: while Hong Kong has laid the groundwork for attracting and retaining pharmaceutical companies, maintaining a leading edge amid regional competition still demands continuous improvement.
Eli Lilly is one of the world's most valuable pharmaceutical companies, with its GLP-1 drugs Mounjaro and Zepbound dominating the global diabetes and obesity markets. The restructuring of a multinational pharma firm's Hong Kong operations offers an opportunity to examine the site-selection logic of global drug companies. Generally, a pharma company's decision to establish a directly operated presence in a given location hinges on three considerations: whether drugs can efficiently enter the local healthcare system, market size and growth potential, and the location's strategic value as a regional hub.
Assessed against these criteria, Hong Kong's strengths are clear: world-class healthcare and research capabilities, robust intellectual property protections, and the free flow of capital and talent. Moreover, the city plays the role of "super connector" and "super value-adder" linking the Mainland with the international community.
Yet despite these advantages, shortcomings cannot be ignored. The local market is limited in scale — a population of roughly 7.5 million alone can hardly sustain directly operated structures. Furthermore, the process of listing drugs on the Hospital Authority's Drug Formulary is lengthy, and approval transparency has room for improvement, meaning some innovative drugs fail to reach patients within an ideal timeframe. These structural factors are precisely what pharma companies must weigh when making their calculations.
To its credit, the SAR Government's reforms in drug introduction have shown tangible progress in recent years. Since the implementation of the "1+" approval mechanism in 2022, 21 new drugs have been approved, of which 7 have been successfully listed on the Hospital Authority's Drug Formulary. The newly established Office proactively identifies needs, engages early with pharma companies on pricing negotiations, and prioritises recommending eligible new drugs for formulary listing — reducing the review period for cancer drugs from up to 150 working days to within 100, a reduction of more than one-third. Meanwhile, the Office works in concert with the "1+" mechanism, the Greater Bay Area International Clinical Trial Institute, and the soon-to-be-established Centre for Medical Products Regulation (CMPR), progressively strengthening Hong Kong's dual role as a biomedical "super connector" and "super value-adder."
Although Hong Kong's institutional framework has taken shape, there remains room for improvement when measured against the practical operational needs of pharma companies. The Eli Lilly episode signals an opportunity for Hong Kong to elevate its game in three key areas.
Optimise the Drug Formulary; Leverage Greater Bay Area Advantages
First, enhance the efficiency and transparency of the Drug Formulary mechanism. Innovative drugs must be listed on the Hospital Authority's Drug Formulary before they can be widely used in public hospitals — this is a critical threshold. Currently, while the main reasons for rejection are disclosed publicly (such as insufficient cost-effectiveness), the specific evaluation criteria and calculation methodologies still lack greater transparency for external stakeholders, and reapplication may take considerable time. It is recommended that the Hospital Authority further clarify its evaluation rationale, make good use of the streamlined direct application channel, and strengthen two-way communication with pharma companies. At the same time, the system should avoid over-reliance on short-term fiscal indicators, enabling innovative drugs to benefit patients more smoothly while bolstering industry confidence in the system.
Second, leverage data and the Greater Bay Area's clinical advantages to connect the "data–application–registration" chain. The Hospital Authority holds Hong Kong's most comprehensive electronic medical records database, which is of immense real-world data value to multinational pharma companies. In coordination with the Hetao Zone, Hong Kong should promote the secure and compliant cross-boundary flow of biological samples and data, building a high-quality clinical research base. Simultaneously, by capitalising on the "Hong Kong-Macau Drug and Device Connect" policy — which allows Hong Kong-registered drugs to be used at designated institutions in the Greater Bay Area — real-world data can be accumulated and fed back into the approval process and indication expansion. The government should proactively assist pharma companies in interfacing with both the "Drug and Device Connect" mechanism and local data systems, creating a virtuous cycle of "register in Hong Kong – apply in the GBA – data flows back – approvals refined."
Strengthen Regional Headquarters Functions to Cover Asia
Third, strengthen regional headquarters and market expansion functions to enhance pharma companies' long-term willingness to stay. Hong Kong's strategic value lies in serving as the operational headquarters from which multinational pharma companies cover Asia. The government should optimise tax incentives, talent attraction, and intellectual property protection policies — for instance, offering tax breaks for regional R&D centres or Asia-Pacific headquarters. At the same time, the Office should hold regular policy dialogues with Hong Kong-based pharma companies, proactively understanding their pain points in market access, clinical trials, and supply chains, and providing one-stop coordination services. This would ensure that pharma companies not only "set up shop" but truly "take root" in Hong Kong, using the city as a fulcrum to radiate across regional markets.
Eli Lilly's restructuring of its Hong Kong operations reflects the dynamic trade-offs inherent in multinational pharma companies' global strategies, and reminds us that the gap between refining mechanisms and meeting industry needs must be continually narrowed. So long as Hong Kong pursues relentless improvement across every link — from approval and formulary listing to market support — it will consolidate its position as an international hub for healthcare innovation.
