SPECIAL LOOK: INSIDE THE LOCAL MARKET
According to IMS data, the Taiwan pharma market experienced its first contraction in 20 years in 2012. Growth in this USD
4.5 billion market was negative at 0.9 percent, and the hospital segment, which is particularly affected by Taiwan's reimbursement
system, experienced a 2.3 percent decline.
Alex Ho, General Manager, IMS
Taiwan is a reimbursed market with a single-payer framework covering 99.8 percent of the population. GDP spent on healthcare,
meanwhile, is only about 6.6 percent (Ministry of Health and Welfare (MOHW)). For Chih-Ping Yang, president of the International
Research-Based Pharmaceutical Manufacturers' Association (IRPMA), the unifying body for multinational pharma organizations
in Taiwan, the math is simple: "Yes, our current system covers over 99 percent of the population. But do we want hamburger,
or steak? Do we want patients with treatable diseases to go without help because the state cannot afford their medicine? Everybody
wants steak, but the national health insurance (NHI) system has barely enough money to offer our people hamburger. We have
to pay more for steak: it's that simple."
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Dr. Yu-Ray Chen, chairman of the steering committee at Chang Gung Memorial Hospital, echoes Yang's sentiment. "The population
needs educating on this issue to understand that quality services need to be financed. There is no such thing as a free lunch.
The system should not be exploited. In Taiwan, despite a golden era of public healthiness, inpatient and outpatient appointments
are growing annually. It is the politicians' responsibility to educate the people and help them to understand that healthcare
resources are finite and should be used appropriately."
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The 2012 contraction of the market was the product of the seventh biennial round of price cuts under a mechanism called the
Price-Volume Survey (PVS), introduced after the Bureau of National Health Insurance (BNHI) experienced its first deficit.
Alex Ho, general manager of IMS Health Taiwan, says that the bureau "tried everything it could to control spending. One of
their major tactics was to reduce drug prices—and they have employed this tactic continually ever since."
Maoting Shen, Director of the Pharmaceutical and Medical Reviews, BNHI