Updates on Taiwan’s Pharmaceutical and Medical Devices Market

The Office of the United States Trade Representative (USTR) recently issued a 2009 National Trade Estimate Report on Foreign Trade Barriers, with details on over 50 countries. Taiwan was one specific country where the USTR had updates on the pharmaceutical and medical devices market.

In the pharmaceutical area, there is considerable concern over pharmaceutical pricing and management. In Taiwan, there is a sizeable gap between the amount the Bureau of National Health Insurance (BNHI) reimburses for a pharmaceutical product and the price actually paid to the provider of that product. The US has been encouraging Taiwan to adopt a system of actual transaction pricing (ATP) to address this gap. In addition, hospital doctors in Taiwan are able to both prescribe and dispense pharmaceuticals, which may result in prescribing practices based on monetary factors instead of purely medical considerations. Therefore, separating these functions would help resolve the long term pricing problem. The Taiwan Department of Health (DOH) has agreed to set up working groups to study options to bring more fairness and transparency to drug pricing, implement ATP, and separate dispensing and prescription.

Taiwan also has a lengthy drug registration process with both a product registration process and a plant master file registration process. Another issue is that the Taiwan DOH Bureau of Pharmaceutical Affairs (BOPA) requires a company registering their drug in Taiwan to provide Certificates of Pharmaceutical Product (CPP) from two separate markets outside Taiwan. However, BOPA is considering new registration procedures that would reduce the current requirement to one CPP, which would help speed introduction of new pharmaceuticals, especially US-made drugs, into the Taiwan market.

In the medical devices area, there has been a growing concern with Taiwan’s ban on imports of about 30 medical products from China. Many US medical devices are sourced/manufactured in China and the foreign medical device industry has suggested that Taiwan lift import bans for these products. In response, the Ministry of Economic Affairs recently announced that it would conditionally allow limited imports of blood glucose meters made in China.

DOH officials are also working to make the medical device registration process more efficient. The DOH recently adopted more flexible product registration procedures for in-vitro diagnostic medical devices that allow importing companies to follow US or EU procedures, rather than demand extensive documentation and redundant testing for products made in Europe by US companies.

The reimbursement price gap seen in pharmaceuticals is also an issue for medical devices in Taiwan. In addition, the BNHI pricing criteria currently specifies a single purchase price for all medical devices that treat the same indication. Therefore, lower quality, often domestically-made devices are subsidized while producers of higher-priced, higher-value devices (with additional services such as physician training and technical support) are reimbursed at an insufficient level.