"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."
Wen-ta Chiu, Ministry of Health and Welfare
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."
Yu-Ray Chen, Chairman of Steering Committee, Chang Gung Memorial Hospital
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."
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 perspective from:
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."
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.
Chih-Ping Yang, President, 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."
Heather Lin, COO, IRPMA