Calculating the Long-Term Cost of Medication After a Serious Traffic Accident

In December 2024, the Hospital Authority (HA) published its revised Drug Formulary for 2025, which includes a new category of targeted cancer therapies and biologics now available under the Samaritan Fund. While this expansion benefits oncology patients, it signals a broader trend: the cost of specialist medications in Hong Kong is rising faster than general inflation. For a victim of a serious traffic accident, the long-term cost of prescribed medication—pain management, nerve regenerators, anticonvulsants, and biologics for spinal injuries—can easily exceed the initial hospital bill. The 2025 HA formulary update means that more drugs are now subsidised, but the criteria for subsidy remain strict, and many accident victims find themselves paying market rates for drugs not on the list. This article explains how to calculate the lifetime cost of medication after a serious traffic accident, using the framework of Hong Kong tort law and the Personal Injuries (Assessment of Damages) Ordinance (Cap. 29). The goal is to give claimants and their families a method to quantify this head of damage, not a legal opinion.

The Legal Framework for Future Medical Expenses

The law in Hong Kong allows a claimant to recover the reasonable cost of future medical treatment, including medication, as a head of special damages. Section 7 of the Personal Injuries (Assessment of Damages) Ordinance (Cap. 29) provides that damages for personal injuries shall be assessed once and for all. This means the court must calculate a lump sum that covers all future medication costs, not a series of periodic payments.

The leading authority is Chan Pak Ting v. Ho Kwok Wa (2015) 18 HKCFAR 89. In that case, the Court of Final Appeal held that a claimant must prove the need for future medication on a balance of probabilities, and that the cost must be quantified using a multiplier-multiplicand approach. The multiplier reflects the claimant’s remaining life expectancy, discounted for contingencies. The multiplicand is the annual cost of the medication.

Step 1: Establish medical necessity. You must obtain a medical report from a specialist (orthopaedic surgeon, neurologist, or pain management physician) that states:

• The specific medication required.
• The dosage and frequency.
• The expected duration (lifelong or for a defined period).
• The medical rationale linking the medication to the accident injuries.

Step 2: Obtain pricing evidence. The court will accept two sources:

• The HA’s Drug Formulary price list (publicly available on the HA website, updated quarterly).
• Private pharmacy quotations from three separate registered pharmacies in Hong Kong.

Step 3: Calculate the annual cost. Multiply the unit price by the daily dosage, then by 365. For example, if a drug costs HK$50 per tablet and the prescribed dose is two tablets per day, the annual cost is HK$50 x 2 x 365 = HK$36,500.

The Multiplier: Life Expectancy and Discounts

The multiplier is the number of years the claimant is expected to need the medication, reduced by a discount for early receipt of a lump sum. The discount rate in Hong Kong is currently 2.5% per annum, as established in HKSAR v. Cheung Wai (2005) 8 HKCFAR 1. This rate is applied using actuarial tables published by the Law Reform Commission of Hong Kong.

Life expectancy is calculated using the Hong Kong Population Life Tables published by the Census and Statistics Department. The 2024 edition (the most recent) shows that a 40-year-old male in Hong Kong has a life expectancy of 45.3 years. A 40-year-old female has 50.1 years. For a claimant with severe injuries, the court may reduce life expectancy by a factor determined by the medical expert.

The court applies a “contingency discount” for the normal vicissitudes of life. This is typically 10-15% for a middle-aged claimant, but can be higher if the claimant had pre-existing health conditions. The multiplier is then calculated as:

Multiplier = (Life expectancy in years) x (1 - contingency discount) / (1 + discount rate)^n

Where n is the number of years until the medication starts (if there is a delay). For lifelong medication starting immediately, the formula simplifies to an annuity factor. A 40-year-old male with a 45.3-year life expectancy and a 10% contingency discount has a multiplier of approximately 28.5.

Quantifying Specific Drug Categories

Pain management drugs are the most common long-term medication after a serious traffic accident. The HA Drug Formulary lists gabapentin (HK$1.20 per 300mg capsule) and pregabalin (HK$2.80 per 75mg capsule) as first-line treatments for neuropathic pain. For a patient requiring 300mg of gabapentin three times daily, the annual cost is HK$1,314. For a 40-year-old male with a multiplier of 28.5, the lump sum is HK$37,449.

Biologic drugs for spinal cord injuries are significantly more expensive. The HA subsidises rituximab (MabThera) for certain autoimmune conditions, but not for traumatic spinal injury. Market price for a monthly infusion is approximately HK$18,000. Annual cost: HK$216,000. With the same multiplier, the lump sum is HK$6,156,000.

Anticonvulsants for post-traumatic epilepsy are a separate head of damage. The HA Drug Formulary covers levetiracetam (Keppra) at HK$1.50 per 500mg tablet. A standard dose of 1,000mg twice daily costs HK$6.00 per day, or HK$2,190 per year. With a 40-year-old male multiplier of 28.5, the lump sum is HK$62,415.

The Role of the Samaritan Fund and Private Insurance

The Samaritan Fund provides financial assistance for patients who cannot afford the cost of drugs not covered by the HA Drug Formulary. The fund covers drugs that are clinically effective but not yet listed. For a traffic accident victim, eligibility is means-tested. The HA assesses household income and assets. If the claimant qualifies, the fund pays the full cost of the drug.

Private health insurance may cover some medication costs, but the court will not deduct this from the damages award. The principle of Bradburn v. Great Western Railway (1874) LR 10 Ex 1 applies: insurance proceeds are collateral benefits and do not reduce the defendant’s liability. However, if the claimant has already claimed from insurance, the insurer may have a subrogation right to recover the amount from the damages award.

The court will deduct any amount the claimant would have spent on medication anyway, regardless of the accident. This is the “pre-accident baseline” rule. For example, if the claimant had a pre-existing condition requiring painkillers, the court will deduct the cost of those pre-accident drugs from the future medication claim.

Practical Steps for the Claimant

Step 1: Gather all medical records and prescriptions. This includes hospital discharge summaries, specialist letters, and pharmacy receipts from the HA or private pharmacies. The court requires documentary proof of the medication regimen.

Step 2: Obtain a life expectancy assessment from a medical expert. The expert should be a specialist in the relevant field (e.g., a neurologist for spinal cord injury, a pain specialist for chronic pain). The report must state the life expectancy with and without the medication.

Step 3: Obtain pricing evidence from three private pharmacies. Use the HA Drug Formulary as a baseline. If the drug is not on the formulary, the court will accept the average of three private pharmacy quotations.

Step 4: Calculate the lump sum using the multiplier-multiplicand method. Use the actuarial tables published by the Law Reform Commission of Hong Kong. The tables are available online at the Department of Justice website.

Step 5: Include a claim for future medical consultations and monitoring. The court will allow the cost of follow-up appointments with the prescribing specialist, typically one per year. The HA charges HK$1,000 per specialist consultation (2025 rate). With a multiplier of 28.5, the lump sum for 28.5 consultations is HK$28,500.

Actionable Takeaways

1. Obtain a medical report from a specialist that explicitly states the medication, dosage, and lifelong necessity—the court will not infer this from general medical records.
2. Use the HA Drug Formulary as your baseline pricing source, but supplement with three private pharmacy quotations for drugs not on the list.
3. Apply the multiplier from the Law Reform Commission’s actuarial tables, using the current 2.5% discount rate, and deduct a 10-15% contingency for normal life vicissitudes.
4. Do not deduct private insurance payouts from your claim—they are collateral benefits under Bradburn v. Great Western Railway.
5. File your claim within the three-year limitation period under the Limitation Ordinance (Cap. 347), or the right to future medication damages is lost.

This does not constitute legal advice. Consult a solicitor for your specific case.