Pharmaceutical News
Hospitals pocked NT$25 billion from NHI drug price gap

Reported by Huang Wen-Yen from Taipei

The NHI drug price gap has long been criticized by the society.  According to the latest data, some hospitals have even negotiated a 38% price gap.  It is estimated that about NT$25 billion NHI drug fees are pocked by hospitals every year. 

Depending on the negotiation power, hospitals are able to buy drugs at a price lower than the NHI payment price and profit from the price difference.  This profit, so-called the NHI drug price black hole, is actually from the insured’s pockets.

The NHIA allows a 15% drug price gap for patented drugs.  However, according to the latest price and volume survey result, the highest drug price gap obtained by primary clinics, district hospitals, regional hospitals and medical centers were 38%, 32%, 27% and 23% respectively. 

Hsieh Tien-Jen, an NHI Committee member and the Honorary President of the Consumers’ Foundation, estimated that, in total, hospitals make a profit of NT$25 billion from the drug price gap every year.  Though the NHIA has been introducing various measures to control and close the gap, those measures are clearly ineffective, said Hsieh. 

Responding to the drug price gap issue, the NHIA considered it as a result of the market mechanism.  Lee Cheng-Hua, Vice President of the NHIA, expressed that the tight competition in the drug market in Taiwan prompts hospitals to negotiate prices with suppliers.  However, the NHIA is not able to differentiate payment prices according to hospitals’ negotiation power.  The NHI payment prices have to be standardized.

In addition to the huge profits pocketed by hospitals, there are other issues in the NHI drug pricing system.  The drug prices in Taiwan are constantly lower than prices in many countries.  There is always a concern that the manufacturers of the top-ten original drugs may withdraw their products from the market in Taiwan due to unsustainable low profit.

Kuo Chui-Wen, a specialist of the NHIA, clarified that so far none of the top-ten original drugs has been withdrawn from Taiwan. Kuo said that the NHIA has included 145 essential drugs and orphan drugs into a protection list.  Some dosage forms are also eligible for protected prices.  The drug price adjustment aims to introduce new drugs; and it won’t affect patient’s rights, stressed Kuo.


【2015-04-26 / United Daily News】