Country Report: Taiwan - Pharmaceutical Executive


Country Report: Taiwan

Pharmaceutical Executive

Wen-ta Chiu, Ministry of Health and Welfare
"Ideally," says Ho, the impact of price cuts "would be offset by the introduction of new products. However, getting products to the market has been quite difficult in Taiwan. The BNHI has not only cut the prices of existing products, but also delayed and heavily controlled the reimbursement of innovative drugs."

Yu-Ray Chen, Chairman of Steering Committee, Chang Gung Memorial Hospital
On January 1, 2013, Taiwan's Second Generation National Health Insurance Act came into force: the first major overhaul of the system since it was introduced in 1995. According to Taiwan's minister of health and welfare, Wen-ta Chiu, one of the aims of the reform was to "release some of the pressure the system has put on pharmaceutical companies."

Chiu says that he understands the difficulties these companies have faced in this market in recent years. "It is for this reason," he says, "that as part of second generation NHI, we have looked to increase premium payments. Medical expenditures as a percentage of GDP will increase 0.2 or 0.3 percent by the end of this year."

The perspective from:
Bringing more money into the system is something the industry has been clamoring for, but other reforms are a mixed bag. For one, the newly formed Pharmaceutical Benefit and Reimbursement Scheme (PBRS) committee, responsible for reimbursement decisions, has introduced patients into the decision-making process: something Ho expects will further delay product launches. In 2013, the number of new drugs approved in Taiwan may be as much as 50-70 percent less than 2012.

The PVS system will be replaced by a Drug Expenditure Target (DET): a virtual budget given to the industry based on a growth rate that is decided by the National Health Insurance Committee. There will be no price cuts in 2013; in 2014, should costs exceed the target, the market will experience another round of cuts. And so forth. According to the predicted mechanism of action, GSK's Thomas Willemsen expects some immediate relief. "But," he says, "my overall prediction is that it will boil down to roughly the same impact over time."

Chih-Ping Yang, President, IRPMA
The most problematic new reform is perhaps the so-called 'Article 46', which looks to introduce immediate price cuts for products that are going off patent.

Heather Lin, COO, IRPMA
Heather Lin, chief operating officer of the IRPMA, is worried. "One thing that innovative companies could rely on under the previous system was that they would have a relatively long lifecycle compared to other markets, as originator drugs would maintain good market share and profitability even after they went off patent. Article 46 means that this profit will now be slashed. Given that the price for innovative drugs entering Taiwan is 50% less than the international median, and the fact that it can take up to two years for a drug to be listed in Taiwanese hospitals, this now means that there is a very short and unprofitable window for selling innovative drugs in Taiwan."


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