Hong Kong drug stores sell medicine 40 to 60 percent cheaper than in mainland China, causing mainland residents to rush to Hong Kong in search of a better deal.
The Hong Kong Daily News recently reported that some cancer medications sold in Hong Kong drug stores are nearly 40 percent cheaper than the same drug sold in mainland China. One such drug called Herceptin costs 24,000 yuan (US$3921) in the mainland but it is not covered by health insurance. In Hong Kong, the same drug costs 9000 yuan (US$1470) less.
Another cancer drug called Iressa can be purchased at a 60 percent discount in Hong Kong.
A woman from Changchun told a reporter from a state-run media outlet in China that she buys Iressa, a product of AstraZeneca Company in England, from Hong Kong because of the large savings.
According to the woman, “Its price is 5099 yuan (US$833) a box in Changchun, which is basically the same everywhere in China, although Beijing or Shanghai might have it cheaper by less than a hundred yuan (US$16). So we always ask friends who go to Hong Kong to buy it, because the price is 2234 yuan (US$365) a box, equivalent to a 60 percent discount compared to Changchun.”
Duowei News, a Chinese-language news website based in the United States, recently reported that more than 50 percent of some Hong Kong drug stores’ customers come from mainland China.
Although this influx of mainland shoppers creates lucrative business for Hong Kong drug stores, local residents fear this will cause a shortage of medication and drive their costs up.
A similar fate occurred in 2008 after infant formula tainted with the toxic substance melamine caused the death of at least six babies with an estimated 300,000 more babies hospitalized, according to officials. Once the incident was reported in China, a large number of Chinese parents went to Hong Kong to purchase infant formula.
As a result, not only did the price of milk formula surge, but also many stores ran out of formula. The Hong Kong government imposed a legal limit on the amount of baby formula one could carry out of Hong Kong.
Local parents are complaining because the increasing number of mainlanders purchasing medication in Hong Kong could also cause a shortage and result in the local government imposing a similar restriction.
While mainland China residents flock to Hong Kong for better deals on medication, Chinese state media blames the high prices on a lack of proper supervision.
Duowei News reported that the exorbitant prices are due to a corrupt medical system involving collusion between multinational pharmaceutical companies and high-ranking Chinese officials.
In July, the Chinese subsidiary of pharmaceutical giant GlaxoSmithKline was accused of bribing doctors to gain drug sales.
GSK China’s marketing manager for the Zhengzhou region told a New Express Daily reporter that bribery is part of their new employee training. He said that besides receiving training in GSK’s medicines and their use, the salesperson is trained to use 7-10 percent of the purchase amount to maintain a relationship with the doctor.
The China Securities Journal has reported that many multinational companies hire individuals with deep ties to the Chinese regime for key positions. These special hires usually don’t participate in any administrative tasks, but are mainly responsible for strategic and political work.
They communicate with members of the National People’s Congress and the Chinese People’s Political Consultative Congress—the national advisory body for the Chinese Communist Party—and other influential officials. By establishing such connections these employees help gain influence and market share for their companies.
Securities Market Weekly has reported that GSK China formerly employed as director of Public Relations the daughter of Hu Yaobang, a one-time head of the CCP. Li Heng left GSK China in 2007.
The son of former Politburo Standing Committee member Li Ruihuan, Li Zhenfu, was CEO of the pharmaceutical company Novartis China for three years. The current Director of Corporate Affairs for Pfizer China, Ping Danlong, is the granddaughter of Li Dequan, Communist China’s first Minister of Health.
Translated by Joseph Wu. Research by Xiangyu Ding. Written in English by Arleen Richards.
