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Second Generation Healthcare Reform is Transforming Taiwan's Pharmaceuticals Market Landscape

December 27, 2013

Taiwan’s second-generation National Health Insurance (2G NHI) took effect in January 2013. Equal access to extensive medical services, low premiums and co-payments by patients, low healthcare expenditures for the government and almost zero waiting time for needed care are the major achievements of Taiwan’s NHI.

In recent findings, Decision Resources, a research and advisory firm for pharmaceutical and healthcare issues, found that the high level of pharmaceutical expenditure in Taiwan is being cut down majorly by Second Generation Healthcare Reform.

"The National Health Insurance Administration has been running at a financial deficit since 2006. Several recent developments such as the establishment of the National Institute of Health Technology Assessment and the introduction of biosimilar guidelines for monoclonal antibodies underlines the government's determination to contain costs," Michael Yeung, analyst at Decision Resources said in a statement.

"One of the main goals of the second generation healthcare reform in 2013 is to increase the financial sustainability of the health insurance program. Drug manufacturers must be prepared to expand their capacity to conduct health economics evaluations as the government is expected to more closely scrutinize the cost-effectiveness of new drugs in the future," Yeung added.

Taiwan has one of the highest levels of pharmaceutical spending in the Asia-Pacific region, accounting for approximately 24 percent of total healthcare expenditure, which is higher than neighboring countries such as Japan and South Korea. However, drug prices in Taiwan remain relatively low at about 28 percent of average U.S. prices, due to biennial price revisions.

Taiwan Market Access Tracker believes that several policies introduced as part of the healthcare reform could significantly impact the pharmaceutical industry.

It is estimated that around one-quarter of healthcare expenditures in Taiwan are spent on pharmaceuticals, and due to this the government is focusing more to contain costs and ensure the financial sustainability of the country's health insurance system.

Edited by Cassandra Tucker

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