By NHIA Director General Po-Chang Lee
Pharmaceutical companies recently claimed that the yearly revisions to National Health Insurance (NHI) drug reimbursement prices have led to reimbursement prices reaching below the level of drug costs, and therefore some are stopping supply of certain products in or withdrawing certain products from the Taiwan market.
Meanwhile, physicians and pharmacists have expressed concerns about low drug reimbursement prices affecting drug quality as well as doubts about the National Health Insurance Administration (NHIA) measures on drug reimbursement price adjustment. In the face of these comments, as head of the NHIA, it is necessary for me to explain the mechanism by which the NHIA adjusts drug reimbursement prices, and going forward, how to pragmatically face the realities of the drug price gap.
According to NHIA statistics, NHI reimbursement of outpatient and inpatient drug expenditures have increased from NT$67.7 billion in 1998 to NT$174.9 billion in 2017 and NT$186.1 billion in 2018, almost doubling within the span of two decades. Under the global budget system, if no control measures are implemented, unless premiums are increased, drug reimbursement will affect other types of health care reimbursements.
Since the second-generation NHI was launched, in accordance with the law, a Drug Expenditure Target (DET) has been implemented on a trial basis. The DET is used to manage drug reimbursement prices based on drug expenses in excess of the yearly target. On the one hand, it incentivizes health care providers to control their drug expenditures, and on the other, it helps stabilize the point values in the global budget. To date, hospitals and pharmacies have largely been “dissatisfied” but “accepting” of this policy.
New drugs that enter the market are protected by patents -- as a result, their sales prices are naturally high. For reimbursement, we refer to the prices of these drugs in 10 counties. Once their patents expire, less expensive generic drugs will enter and compete, which leads to original drug manufacturers lowering their prices. Out of respect for free market competition, the NHIA uses the averages of actual transaction prices between health care providers and pharmaceutical companies as a basis for adjusting the reimbursement price.
Some have consistently claimed that drug reimbursement prices have been cut far too low, but in fact, when conducting DET calculations, the NHIA always makes decisions based on the sales prices reported by manufacturers while also factoring in reasonable profits.
Rumors persist about low reimbursement prices driving originators out of the market. According to NHIA statistics, over the past decade, close to 50 percent of drugs were pulled out of the NHI by manufacturers due to competition from generics. Other reasons include production being discontinued, licenses expiring, and authorization for local manufacturing of generics. In fact, there have only been a limited number of cases in which drugs were pulled from the market because of reimbursement and cost considerations – not to mention the market share of originators having actually increased in recent years. As to the few pharmaceuticals and medical devices that Taiwanese companies are not able to manufacture, it is upon us to review and improve our management in order to reasonably protect the interests thereof and allay public concerns as well as concerns in the medical and pharmacist communities.
【2019-03-22 / Apply Daily】
