Drug shortage continues to affect Taiwan despite the joint efforts by the government and the industry. In many countries, medicinal products are listed as critical materials. Many governments have taken steps to ensure supply chain security. Drug shortage is not just a problem about technical issues, such as market supply and demand, NHI reimbursement policies and patients’ behaviour, etc. This is an issue that needs to be addressed from a higher perspective in order to build supply chain resilience.
The pandemic, the Russia-Ukraine War and the global shortage of labour are some of the reasons behind the unstable supply of APIs and drugs. In August 2020, the US FDA carried out an assessment of the supply sources and the local manufacturing capacities of essential medicinal products. In May 2022, the US FDA constructed a list of 86 essential drugs, which are subject to monitoring and special treatments, such as manufacturing subsidies, tax incentives, loans, etc., in order to expand the supply sources. The US government also requested hospitals to strengthen the supply security by diversifying supply sources. For products that rely heavily on imports, the US government also implemented measures to encourage manufacturers to produce these products in the US or in US-friendly countries. The US government is also keen to strengthen the alliances with countries which supply the US market.
As for Japan, the MHLW has taken actions to prevent drug shortages after experiencing a shortage of cefazolin in 2019. Firstly, the MHLW constructed a list of essential and priority drugs and set the stock level requirements respectively. Secondly, the MHLW established a mechanism for tracking inventory by directly accessing the information hold by drug companies. Thirdly, the MHLW provides incentives to encourage generic manufacturers to diversify their API supply sources and to support local manufacturing.
In Taiwan, the MOHW created a drug shortage reporting system in June 2015. It allows drug companies, hospitals and trade associations to report drug shortage on-line. Upon receiving a shortage report, the TFDA will check the availability of alternative drugs and initiate appropriate measures if necessary. However, if this mechanism worked well, this current shortage crisis would not have happened. Therefore, the government should carry out a thorough review of this mechanism, rather than just call a few expert meetings as usual. This crisis should not be viewed just as a one-off public health incident. Instead, the government should approach this crisis from a higher perspective, and to carry out a thorough health check of the pharmaceutical industry.
The MOHW should step forward from the role of simply a regulatory authority and should examine the situation from the aspect of healthcare security. The MOHW should take into consideration a sound future of the pharmaceutical industry so as to strengthen the resilience of drug supply and to avert potential shortages of essential drugs. As part of its overall strategies, the MOHW should formulate appropriate industrial policies and form alliances with neighbouring countries.
At the same time, the MOHW should incorporate the thinking of healthcare security and supply chain resilience into its “New South-Bound Policies”. The “Healthcare Cooperation and Industrial Chain Development” Project is a new southbound flagship project. It aims to increase the southbound partner countries’ understanding and confidence in our healthcare system, medical technology and medicinal products. However, the new southbound policy is not just about exportation, it also aims to enhance the industrial alliances and diversification so as to increase the healthcare resilience in Taiwan and in the partner countries. It is a shame that the MOHW focuses its efforts mainly on disease prevention and the provision of healthcare services, while pays less attention to healthcare polices. As the new southbound cooperation has been in place for many years and has been quite effective, Taiwan is in a good position to strengthen its healthcare security by diverting imports from China to the southbound partner countries.
Therefore, in view of Taiwan’s long-term welfare, we earnestly suggest that the MOHW should consider the supply chain security and industry resilience while formulating its policies.
【2023-03-22 / Economic Daily】
