Drug related issues have been under heated discussions in Taiwan.  As patented original drugs are usually more expensive, many hospitals in Taiwan turn to generic drugs due to cost concern.  So, what are generic drugs?  Generic drugs refer to those drugs with the same ingredients as an original drug with expired patent. They are cheaper to buy, hence generate a larger profit margin for hospitals.  Some generic painkillers are sold at NT$1 a tablet, while the original drug costs NT$15.  Doctors worry about the impact on drug quality caused by NHIA’ relentless price cuts.

There are two types of drugs: original drugs and generic drugs.  Original drugs are researched and developed by drug manufactures and are under patent protection.  They are usually more expensive.  Once a patent expires, other manufacturers are allowed to produce drugs identical in ingredient, dosage form, strength and efficacy and sold at a cheaper price.

The NHIA implements a price cut on new drugs almost once every year.  The new drug price level in Taiwan was about 89% of the international price in 1995 (based on the new drug prices in the so-called A10 countries, including the US, Canada, the UK, Germany, France, Japan, etc.).  It fell to 53% in 2015, down by 40% in the past 2 decades.  The low price policy has a devastating impact on international manufacturers’ willingness of introducing new drugs into Taiwan.  In fact, some original manufacturers have already withdrawn their business in Taiwan due to low NHI payment prices.

Exactly how low is the NHI drug price?  Lin Shu-Feng, a DPP legislator, pointed out that there are 475 cardiovascular drugs and 230 gastrointestinal drugs priced under NT$1, and 914 drugs for nervous system and 838 gastrointestinal drugs priced under NT$5.  Yet, the NHIA implemented another drug price cut on 7392 drug items this April to save NT$3.18 billion on drug expenditure a year.

Obviously, no one will stay in unprofitable business if there is no profit. Any decision affecting drug safety should be made with great care.  Generic drugs can be good as long as the authority can assure the drug quality.

【2016-05-14/ TTV News】