HK's dispensaries new attraction for mainland visitors

Even as regulators apply pressure to lower costs, Chinese mainland patients pay some of the highest prices for treatments worldwide.

Drug supply chains are complex, and Frost & Sullivan consultant Neil Wang estimates there is a 5 percent to 7 percent mark-up at various levels of the distribution system that drives up prices. Also, taxes on imported medicines can add up to 17 percent in the mainland, according to Wang, while Hong Kong doesn't tax drug imports.

The real Dragon City Pharmacy only provides drugs to those with a Hong Kong prescription. This was corroborated by customers who had just visited and asked for treatments.

The original Dragon City also has had complaints from customers mistakenly going to copycat branches and ending up paying too much.

"All we have is our brand and we feel it's being tarnished," said Kwong, Dragon City's manager, who asked that only her last name be used. "But even if we complain, one after another keeps popping up."

The original Dragon pharmacy has signs outside its doors saying that it only has one branch.

The Hong Kong government conducts routine inspections of pharmacies, and also buys and tests prescription drugs to fight illicit sales, the health department said in an e-mailed response to questions.

From 2011 to 2014, the department conducted 4,775 inspections of pharmacies and convicted 67 for illegal sales of prescription medicines. In Hong Kong, the maximum penalty for illegal possession and sale of prescription medicines is a fine of HK$100,000 ($13,000) and two year's imprisonment upon conviction, according to the health department.

Hong Kong has long had a reputation for selling quality health products, and many stores doing legitimate business have flourished.

Watsons, a retail pharmacy chain controlled by Hong Kong's richest man Li Ka-shing, has over 200 stores in the city and continues to add more. "At Watsons, we sell only prescription drugs to customers or patients with doctor's prescription and our registered pharmacists will check each case thoroughly," the company said via e-mail.

But there are others who don't follow the same rules. On Aug 13, Hong Kong's Consumer Council, a government-funded body, cited seven outlets for their "disgraceful" practices, including charging exorbitant amounts for products, saying the stores hurt Hong Kong's reputation as a "shopping paradise".

William Chui, president of the city's Society of Hospital Pharmacists of Hong Kong, estimates that 90 percent of cancer drug sales at Hong Kong drugstores are to mainland tourists, since most local patients can get their supply through hospitals or their doctors.

"How can they survive and pay the salary of a pharmacist and the rental cost?" said Chui, referring to the mom-and-pop stores opening up in some of the city's high-priced neighborhoods. "You think they can get by just selling toilet rolls, formula milk powder, shampoo? Of course not."