Taiwan: New Pharmaceutical Regulatory Trends

The recent Asian financial crisis did not significantly affect the Taiwanese economy. In 1999, Taiwan registered about 6% GDP growth and kept low inflation (1.6%) and unemployment (2.6%) rates, in sharp contrast to most other Asian economies. Many analysts credit this achievement not only to Taiwan’s strong economic fundamentals, but also to the government’s encouragement of foreign investment and trade. Indeed, Taiwan’s foreign exchange reserve level in October 1999 reached $87 billion, to become the second highest in the world.


Taiwan ’s current National Health Insurance System is a 1995 expansion of the previous system, offering more comprehensive benefits and covering a wider variety of services. The new system has added outpatient services, dental care, traditional Chinese medicine, hospitalization, home care, preventive treatment, and pharmaceuticals to the list of services it covers. The Bureau of National Health Insurance (BNHI) regulates pharmaceutical prices.

Since 1996, Taiwanese national healthcare expenditure has stayed constant at 5.7% of GDP, about NT$16,900 (US$615) per capita. In an attempt to prevent rapid medical cost growth experienced by other countries, the government has sustained total healthcare expenditure growth at 1% below nominal GDP growth.

Currently, the island houses more than 16,000 medical institutions. Roughly 12% of Taiwan’s 787 hospitals are public, in addition to its more than 15,300 clinics, which are smaller public healthcare facilities. In total, medical facilities have more than 101,400 beds, 39.7% of which are public. Users and their insurance providers fund 65% to 90% of public health fees, and the government, 10% to 35%.

Perhaps the most important facet of the revised healthcare system is that it now covers more than 96% of Taiwan’s citizens. Third party reimbursement is therefore an important consideration in any healthcare expenditure or in the procurement of a new medical device or pharmaceutical.


The Department of Health (DOH) has established the Bureau of Pharmaceutical Affairs (BPA) to handle pharmaceutical regulation.

In order to enhance the clinical trial application and review process, the private, nonprofit Center for Drug Evaluation (CDE) was established in 1998. Among the CDE’s duties are facilitating company and government meetings during a new drug’s development phase, and reviewing new drug applications for the BPA.


Good Clinical Practices (GCP) are used in several countries to provide a base for quality drug development. In addition, Taiwan encourages early phase global clinical studies, plans to develop a first class clinical trial center in Taiwan, and hopes to influence other parts of Asia, including the Chinese mainland.

The DOH adopted GCP guidelines in 1996 and new inspection procedures in 1996-97. All drugs in the registration phase must comply with GCP guidelines, but developed drugs need only comply by July 1, 1997, and all Phase IV drugs (those in the final stages of clinical trials) must comply by January 1, 1998.

GCP Inspection Activities

The GCP Clinical Trial Training program began in 1995, when it covered the cardiovascular, oncology and infection areas. In 1996, it added endocrine, metabolic and gastro-enteric clinical inspections, then neurology, anti-inflammatory and analgesics in 1997. Finally, in 1998, the pulmonary and nuclear medicine areas were added.

Although a number of medical center inspections were held in the 1999 fiscal year, the DOH is still wrapping up its initial inspector-training program, with the help of hospitals, who have trained inspectors since 1995. Sponsors have monitored training programs, as well. In addition, hospitals are responsible for establishing a joint International Review Board (IRB) and for speeding up reviews.

History of Other Related Regulations

1970 – Taiwan passes its first law concerning control of medicament and pharmaceutical firms.

1982 – Establishes Good Manufacturing Practices (GMP) requirements and criteria.

1983 – Establishes a safety monitoring system.

1984 – Creates stability guidelines for drugs.

1987 – Establishes requirements for generic drug bio-equivalence standards.

1990 – Changes the drug classification system.

1993 – Passes Law on Pharmaceutical Affairs.

– Creates rules for local clinical trial requirements.

1996 – Enacts GCP criteria and requirements.

1998 – Creates Good Laboratory Practices (GLP) and applies to non-clinical laboratory studies.

– Publishes GLP criteria for non-clinical laboratory studies.

– Creates adverse reaction reporting system.

– Establishes guidelines for non-clinical pharmacology and toxicology studies for medical products applications. Implementation set for two years after publication (mid-2000).

– Revises guidelines for stability testing.

– Issues general guidelines for clinical trials.


The Taiwanese adverse reaction reporting system works similarly to the auto insurance laws of most US states: the concept of “no fault” is applied, according to the injury’s seriousness. “No fault” is more likely to apply to less serious injuries, and each case is reviewed by an independent medical committee. Because the government and pharmaceutical companies both fund this system, however, some independent analysts have questioned the system’s independence, objectivity and scientific soundness.


Good Manufacturing Practices are internationally recognized and are often a requirement that must be fulfilled before a pharmaceutical product may be approved for import and marketing. Taiwan has been upgrading its GMP standards for nearly seven years, and brought them up to international standards in 1998.

Taiwan ’s more than 200 pharmaceutical manufacturing facilities have been inspected regularly every two years since 1987, in addition to unscheduled follow-up inspections. Follow-up inspections are explained in the following table:

Inspection Year Total Grade P* Grade C** Not Applicable Percentage of Grade C
1992 146 107 14 15 9.59
1993 108 37 3 67 2.78
1994 131 110 12 9 6.87
1995 94 73 9 6 9.57
1996 104 85 12 7 11.54
1997 120 101 10 9 8.33
Source: Bureau of Pharmaceutical Affairs
*Grade P: Factories Practicing GMP **Grade C: Factories Violating GMP Regulation


The Department of Health (DOH) has recently begun the process of streamlining its drug testing, trials, registration, and other requirements. Because these regulations are more efficient, more waivers and exemptions are available for local clinical trials, bridging studies, registration and other, related requirements than has been the case in the past.

Deregulation of Local Clinical Trials

Although generics must still follow BA/BE regulation standards, the DOH has stipulated that local clinical trials are not required in certain situations and for certain drugs, especially vaccines for immunization purposes. Applicants must still demonstrate the vaccine’s safety and efficacy, however, and substantial publications and documents may still be required, including local cost/benefit analyses. This waiver or deregulation process was officially announced by the DOH in March and June 1998, and applies to the following:

  • drugs for treatment of AIDS
  • drugs for use in organ transplants
  • drugs for which there are inadequate trial populations in Taiwan
  • drugs for treating serious diseases
  • drugs without any substitute therapy
  • ethnically insensitive anti-cancer treatments
  • breakthrough drugs supported by solid scientific documentation to be ethnically insensitive
  • breakthrough drugs that are diagnostic radio-pharmaceuticals and are proven ethnically insensitive
  • various other diagnostic radiation products
  • drugs that treat life-threatening diseases, such as:
  • Advanced cases of AIDS;
  • Congestive heart failure (New York Heart Association Class IV;
  • Emphysema and metastatic refractory cancers;
  • Recurrent sustained ventricular tachycardia or ventricular fibrillation;
  • Herpes simplex encephalitis;
  • Severe combined immunodeficiency syndrome;
  • Bacterial endocarditis; and
  • Subarachnoid hemorrhage.

The clinical trial application process was also changed in 1998. A certificate of approval from the highest regulatory authority in the drug’s country of origin is no longer required under the new system. Instead, applicants may submit marketing or IRB approval of a clinical trial from any developed country. Data required for the new applications is provided by Free Sale Certificates (FSC) or IRB-issued approval documents from clinical trials. Furthermore, if the clinical trial being applied for is for a new indication, none of the documentation referred to above is required.

Bridging Study Deregulation

Regulations and criteria for bridging studies are still being finalized. Such studies may waive full-scale local clinical trials on a phased basis. Ethnic sensitivity is one clinical trial issue that may be eliminated by the new regulations, although the new drug would still need to provide satisfactory documentation and evidence concerning ethnic sensitivity. Manufacturers should make a checklist based on the ICH-ES document to prove their drugs’ similar effects on different ethnic groups.

Because Asians react to some drugs differently than non-Asians, it is important for the manufacturers of these drugs to demonstrate that the product has met certain conditions. Because Chinese livers have lower metabolic activity than Caucasians, for example, pharmaceuticals metabolized by CYP2C19 or CYP2D6 in the liver need to undergo studies to determine the appropriate dosage for Chinese patients. All studies must draw from a sufficient portion of the Asian population to provide for a scientifically sound comparison of pharmaco-kinetic data between Asian and non-Asian populations.

Three specific categories have been created for which bridging studies must be conducted, though several pharmaceuticals outside of this category must also conduct this study. The categories are drugs that:

  • Have active ingredients that demonstrate the nature of non-lineal pharmacokinetics under the clinical therapeutic dosage;
  • Have a narrow therapeutic index; and
  • Are highly metabolized, particularly those that metabolize through a single pathway, which increases the possibility of drug interactions.

Deregulation of Registration Trial Requirements

Taiwan has also partly deregulated drug registration trial requirements. Registration trials are not necessary for the following new pharmaceutical products:

1. Drugs intended to be used for one-time treatment.

2. New combination drugs, the efficacy of which is the same as single component drugs marketed in Taiwan.

3. Topical use drugs, such as those used for the skin, eyes or ears.

4. Nutritional supplements, such as amino-acid infusion.

5. Products used to wash the intestines prior to operations.

In addition, drugs that treat psychosis and those that treat chronic immune system diseases do not need local clinical trials, if it is difficult to conduct the trial due to limitations of the disease itself or limitations of facilities. Drugs that treat rheumatoid arthritis, systemic lupus erythematosus (SLE), and schizophrenia do not need registration trials if data are submitted showing they are ethnically insensitive.


For a vaccine product to qualify for a registration trial waiver, it must fulfill the following conditions:

  • The drug is marketed in its original country and possesses more than two FSCs from 10 developed countries.
  • The specific microorganism or group of microorganisms the drug prevents must be regionally insensitive, or there must be sufficient data to demonstrate that immunization can interactively protect various microorganism antigens.
  • The applied vaccine’s protective effect or antibody reaction must be proven ethnically insensitive, with the use of appropriate Asian ethnic data.
  • Sufficient data proves the drug is safe for the public.
  • The product’s efficacy and safety must be proven by published documents and comply with at least one of the following conditions:
  • There are insufficient subjects for registration trials.
  • The product prevents an urgent and serious infection or its complication.
  • The product meets specialized needs.

Once the new drugs are approved, some regulations apply to listing them in public hospitals. First, public hospitals may not request that trials be listed, unless they clarify specifications concerning inspection and acceptance, as an approved clinical report is required for new drug applications. Additionally, the tender by a public hospital when new drugs are to be purchased must be listed by brand name.


Since the 1990s, the DOH has focused on simplifying the regulation and review process, to allow a larger amount of high quality drugs to enter the Taiwanese market. American pharmaceutical companies and trade associations took a large part in negotiations with the Taiwanese government to encourage a more streamlined process, opening the market further to foreign drug manufacturers.

The most recent and encouraging news of this trend is that the DOH in 1999 announced new plans to simplify drug import applications for foreign pharmaceutical companies operating in Taiwan. In addition, the DOH strengthened mutual recognition of international GMP standards for new drugs and medical equipment.

Based on an agreement between DOH officials and representatives of the Pharmaceutical and Research Manufacturers of America (PhRMA), clinical trial requirements specific to new foreign drug products are expected to be phased out by June 2000. In response, PhRMA has agreed to expand its ethnic sensitivity testing. Additionally, it will lobby the USFDA to support a Taiwanese proposal that would create a committee within the Asia-Pacific Cooperation Forum for joint clinical testing of pharmaceuticals. More American private sector support will need to be added, however, to outweigh Mainland Chinese opposition to Taiwanese involvement in the project.


” Taiwan to Phase Out Special Clinical Testing Requirements Imposed on New Foreign Drug Products by June 2000.” 5/24/99Marketletter.

” Taiwan: Important Regulations for Medical Devices.” International Market Insight Report , US Foreign and Commercial Service.

Trade Compliance Center Reports, US Department of Commerce, June 1998.

Department of Health Reports, ROC Taiwan 1995.

CIA World FactBook, 1997.

Republic of China Yearbook, 1998.