The NHIA is set to make an advanced announcement about drug price reform as early as the end of this year. This reform is said to be the most significant since the implementation of the 2nd Generation NHI. In addition to addressing the issues of old drugs, the NHIA will propose price incentives for first new drug launch, new drugs developed in Taiwan, new drugs manufactured in Taiwan, and the applications of NCE-2 drugs that have been on the market in the A10 countries for over 5 years. The NHIA hopes that this price reform will enhance Taiwan’s drug R&D and manufacturing capacities and resolve the issue of drug shortages.
Several factors impact Taiwan's domestic drug manufacturers' R&D and manufacturing capacities. One such factor is the prolonged wait for NHI listing, coupled with patients' preferences for original drugs. The majority of domestic manufacturers rely on the low-margin generic market for survival. The export restrictions imposed by numerous countries during the pandemic have triggered a global drug shortage. The Taiwanese government must confront the challenges of establishing a self-sufficient drug supply system.
Ms. Huang Yu-Wen of the NHIA stated that providing price incentives for drugs manufactured in Taiwan will play a crucial role in addressing the drug shortage crisis and boosting domestic manufacturing capacities. This strategy will reduce Taiwan's reliance on the international supply chain, contributing to greater self-sufficiency in the country's pharmaceutical sector.
The NHIA also intends to broaden the definition of "first new drug launch." In the future, for new drugs manufactured in Taiwan, manufacturers who apply for market authorization in Taiwan within 2 years of the initial launch in other countries will be eligible for preferential reimbursement prices. This provision also extends to NCE-2 drugs that have been on the market in the A10 countries for over 5 years. In an effort to encourage domestic manufacturers to participate in generic production, the NHI will provide a 10% price mark-up for the first two generic licenses issued after the expiration of the reference drug's patent.
Dr Chu Yi-Hong, Vice President of the Taiwan Hospital Association, voiced his concerns. While he acknowledged the NHIA's positive intent to promote domestic drug manufacturing, he emphasized the need for appropriate incentives. Dr Chu highlighted that Taiwan isn't proficient in drug R&D, with most new drugs being developed by international companies. He expressed worry that if generics are priced higher than original drugs, it could lead to drug price inflation. This, under the NHI global budget system, may adversely impact resources allocated for other medical services. Dr Chu suggested that the government should utilize the budget for public affairs for these incentives instead of relying on the NHI budget.
Mr Liu Yuan-Rei, Vice President of the Taiwan Young Patient Association, pointed out that the primary objective of generics is to reduce treatment costs. This purpose will be failed, if generics are priced higher than original drugs. Mr. Liu suggested that the government should explore alternative budgetary resources to support the industry, rather than imposing an additional financial burden on the already strained NHI.
【2023-11-19 / United Daily News】
