Drug Reimbursement Price Cuts in Taiwan

The Bureau of National Health Insurance (BNHI) of Taiwan recently issued its fifth round of drug price cuts, to take effect from November 1, 2006. This cut represented a compromise from earlier plans.

The initial proposal put forward by the government was to lower prices of 562 pharmaceutical products. Five major drug associations protested this drug cut, including the TPMMA (Taiwan Pharmaceutical Marketing & Management Association) and TPADA (Taipei Pharmaceutical Agents and Distributors Association). The associations said that these price cuts would force many drugs out of the Taiwan market, and pushed for a suspension on the new prices.

The BNHI agreed to review 132 company appeals against the new drug prices. After assessing these cases, the BNHI decided to increase the prices of 39 products and decrease the price of one product from what it had originally planned. The BNHI also re-priced oral inhaler and nasal spray products to treat asthma patients. Initially, these products had been lumped into one pricing group despite differences in strength. To address this issue, 18 high-strength products were put in a higher pricing group and 12 low-strength products in a lower pricing group.

Under the current system, hospitals rely heavily on NHI reimbursement to cover costs. Therefore, lower reimbursement prices will prompt hospitals to push drug suppliers for lower retail prices. Drug prices continue to be a difficult issue as the BNHI searches for ways to reduce healthcare spending.