Although Taiwan is the name that many people in the international community use when referring to this territory, its official name is Republic of China (ROC), Taiwan being the name of the principal island in the ROC. During the height of the Cold War, the ROC was known as “Free China” and has since grown under this title into an entity which espouses capitalism and owes its economic success to the government’s policy of market liberalization and economic reform.
Taiwan’s influential status as an economic powerhouse has earned respect from other countries around the world, which are careful to maintain their vital trade relationships. Taiwan has emerged as the world leader in foreign exchange reserves, with $82,400 million in 1991. Moreover, Taiwan’s government has focused much effort in recent decades on the implementation of huge infrastructure programmes to support the island’s explosive economic growth. These projects have included the building of additional expressways, rail lines, power plants and petrochemical facilities, as well as investment in telecommunications expansion and pollution control projects.
… Government Stresses Healthcare
As part of Taiwan’s Six-year National Development Plan, the government will spend a total of $3,000 million on health and medical care network projects. The government’s concern with the healthcare industry is reflected in its establishment of a Pharmaceutical Production Development Center, an Industrial Technology Research Institute to conduct research aimed at developing medical products, and the implementation of Good Manufacturing Practice guidelines, which make inspection standards for the medical industry’s facilities and products more stringent.
The growing affluence of the Taiwanese (annual per capita income exceeded $10,000 in 1992) has contributed to the growing demand for better health care. Accompanying the growth in income are lifestyle changes and an increase in life expectancy, all contributing to rising demand for better facilities and more comprehensive care. The local healthcare industry is unable to meet the demand for more technologically advanced products, although it maintains a strong presence in the low to medium-end market sector. Given this situation, the short-term prospects for foreign producers of health products are favorable.
The government’s plans to institute a National Health Insurance Plan by 1995 also indicate a strong future for the long-term growth of the Taiwanese medical market. This programme will cover all 21 million people in Taiwan. The current National Development Plan specifically targets small clinics (under 100 beds) with a view to expanding their facilities and services and turning them into medium-sized general hospitals. Complementing the government measures, private hospitals have spent over $1,000 million on expansion projects — most of which were completed by 1990 — and today, eight new private hospitals are nearing completion.
… Medical device market
The overall import market size for medical devices in 1992 was almost US$295 million, with estimates predicting a steady growth rate of 3-5% per year. Domestic Taiwanese manufacturers have a very strong position in the market for disposable medical supplies, but foreign firms dominate other segments of the market due to Taiwanese consumer perception that foreign goods are of superior quality. The US is still the leading supplier of medical equipment in Taiwan, but its market share declined from 43% in 1990 to 39.1% in 1991. Market shares for other countries in 1991 were: Japan (32.6%), Germany (9.5%), and the UK (2.4%).
…how the system works
Hospitals account for the largest volume of medical device purchases. There are over 800 hospitals in Taiwan, more than 700 of which are private. Some large private hospitals purchase directly from suppliers — whether domestic or foreign — in order to reduce costs. Private clinics and smaller hospitals typically rely on agents or distributors for supply of their medical equipment. Public hospitals generally organize a purchasing committee composed of doctors and medical professors, which establishes specifications and approves purchasing requests. The medical equipment is then purchased through an open bidding process conducted by the Central Trust of China — Taiwan’s purchasing authority.
A foreign manufacturer interested in selling medical equipment in Taiwan must assign a local company on its behalf to submit application forms to the Department of Health in order to obtain a product license. This license is a pre-marketing registration for the products. In addition, a foreign manufacturer must obtain an import license from the Board of Foreign Trade (BOFT) of the Ministry of Economic Affairs, accompanying the application with appropriate documents on quality control, clinical trials, instructions for use, etc. The National Bureau of Standards (NBS) sets the design and safety criteria for medical equipment. Inspection by the Nuclear Science Council is required for X-ray machines and radiological equipment. If the product is intended for use in the human body, an inspection by the National Health Administration is needed. Some high technology equipment such as CT scanners and haemodialysis units require a “certification of need” issued by the Department of Health.
There are no non-tariff barriers or other import barriers levied on imports of medical equipment. Most medical equipment is subject to an import duty of 5% or less. These factors make Taiwan a favorable environment for the import of medical devices.
There are good opportunities for cardiology/cardiovascular medical devices in Taiwan — particularly electrocardiographs, cardio scopes, and artificial hearts and pacemakers. Electrosphygmomanometers and pacemakers are produced domestically, but these products do not have the same quality as those produced by foreign companies.
Although the market for cardiology/cardiovascular equipment has become more competitive in recent years as suppliers realize the enormous export opportunities, the market is expected to continue growing at a rate of 10-15% per year. Japanese suppliers, for example, experienced a sales increase of over 50% in electrocardiographs in 1990-91.
With the increased standard of living in Taiwan, people are living longer, and senior citizens’ health issues are increasing in importance. Changes in lifestyle have also altered the medical needs of the population. Cerebrovascular and heart disease are now the two leading causes of death in Taiwan.
Other opportunities for foreign manufacturers, besides cardiovascular equipment, include: electroencephalographs, ultrasonic scanner, X-ray diagnostic equipment, linear accelerators, laser surgical equipment, and orthopaedic and prosthetic equipment.
Taiwan no longer enjoys the position of being the only “China” in the world, yet through investment and trade links, it is beginning to carve itself a new identity as part of the “greater China” — the People’s Republic of China, Hong Kong and Taiwan. In spring 1993, talks between Taiwan and the People’s Republic began, which have been seen by some as a step towards reunification. At the same time, however, nationalist sentiment in Taiwan is growing and many on the island favor independence with international recognition as a country separate from Mainland China. Whichever path it ultimately takes, the process will most likely be a slow and gradual one, and in no way a threat to the thriving economy Taiwan’s people have worked so hard to build.
Facts about Taiwan
- Population (1992) 20.6 million
- Per Capital GDP (1992) $10,013
- Total Hospitals/Clinics 13,661
- Hospitals 821Clinics 12,840
- Hospital beds/10,000 persons 45
- Medical personnel/10.000 persons 47.1
- Total medical personnel 96,921
- Total hospital beds 92,791
- Acute beds 75,059
- Chronic bed 17,732