To investigate the popularity of formulary systems in all Hong Kong hospitals and to compare these with the newly introduced formulary system in a major government hospital, the Princess Margaret Hospital (PMH), as the baseline.Questionnaire and selected interviews by pharmacy students.All hospital pharmacies in Hong Kong.Department managers (directors of pharmacy services) of hospital pharmacies.The popularity of the hospitals' formulary systems and their formulary decision-making strategies. Calculations of cost savings of the new formulary system in PMH and a comparison of the PMH system with the US standards were also made.Among 38 responding hospitals, 35 (92%) had a formulary handbook and 21 (55.3%) claimed to have a formulary system. The evaluation processes and formulary decision-making procedures were found to be inadequate because basic components in drug evaluation (e.g., standardized criteria for drug evaluation) were not used regularly. However, the formulary system in PMH was found to be comparable with the US standards. Substantial cost savings were made through rejection of less cost-effective drugs by the Formulary Subcommittee in PMH.In general, comprehensive formulary systems are still not popular in Hong Kong. This may be due to insufficient staffing and lack of administrative and physicians' support. The new formulary system in PMH can be used as a model to develop a successful formulary system in which hospital pharmacists can prove their expertise for the benefit of both hospitals and patients in Hong Kong.