Concerns over drug shortages have resurfaced recently, with findings by the Taiwan Food and Drug Administration (TFDA) showing that 47 drugs are slated for withdrawal from the domestic market as of September 2025. Although most of the affected drugs have substitutes, their withdrawal has still raised supply concerns. The Ministry of Health and Welfare emphasized that amendments to the Pharmaceutical Affairs Act will empower the TFDA to better oversee and manage Taiwan’s drug inventories to prevent market imbalances. Experts note that drug shortages are not unique to Taiwan but a global challenge, driven by rising production costs, the heavy concentration of active pharmaceutical ingredient (API) production in China and India, and increased transportation and energy costs following the pandemic and escalating geopolitical tensions. In addition, excessively low drug prices have left manufacturers with narrow profit margins and weak incentives to maintain supply.

Drug pricing policy also presents a dilemma. Because new drugs involve high R&D costs, lengthy review processes, and short patent-protection periods, companies must recoup their investment within a limited timeframe, often resulting in higher prices for new medicines. Taiwan’s current pricing mechanisms—primarily international price referencing and treatment-course comparison—aim to keep domestic drug prices aligned with global standards. Once patent protection expires, generic drugs can enter the market and significantly reduce prices. However, if prices are driven too low, manufacturers may lose the incentive to continue production, which in turn could worsen drug shortages.

The recently discussed balance billing system is viewed as a potential way to ease drug supply issues. Under this system, patients may pay the price difference above the amount covered by National Health Insurance, allowing brand-name drugs to maintain reasonable profit margins and remain on the market while preserving patient choice. However, if the system is poorly designed, it could undermine medication equity for disadvantaged groups. Therefore, balance billing must be accompanied by robust information disclosure and adequate subsidy mechanisms. Experts urge Taiwan to strengthen early-warning systems for drug supply, establish appropriate safety stockpiles, and introduce the balance billing system cautiously to ensure both fairness and sufficient incentives for suppliers.

[2025-11-12/Liberty Times]