Pressured by drug price cuts, several makers of brand name drugs have voiced their intent to leave the Taiwan market, raising scrutiny against the National Health Insurance Agency (NHIA). In response, NHIA Director General Lee Po-chang has said that plans are in place to address a list of drugs that have been set with unreasonable prices, while the floor price of three types of drugs has been raised. At the same time, a new cloud-based medical data system has helped in reducing redundant prescriptions to save costs. In addition, the Food and Drug Administration would also work with local suppliers to promote the equivalence of generic drugs with brand name drugs in terms of effectiveness to help ease doubts about not using brand name drugs.
Cost reduction, revenue expansion key to sustaining NHI
Although the National Health Insurance program enjoys an 80-percent satisfactory rating, many have questioned the program’s sustainability. During a forum assessing the public’s accessibility to healthcare and the government’s insurance drug reimbursement scheme, Director General Lee said that the NHI program has a mechanism that links revenue and expenditures. In the event that the NHI’s reserve fund is exhausted by 2021, increases in premiums would be triggered. Therefore, the government’s current priority is to ensure that resources are utilized efficiently without increasing insurance premiums.
As the population ages leading to more patients with cancer and other chronic diseases, demand for new oncology treatments and drugs have risen rapidly. To address rising demand, the NHIA launched on a trial basis the Drug Expenditure Target (DET) system, which cuts prices of classes of drugs that exceed expenditure targets to contain runaway drug spending. As a result, these price cuts have pressured some suppliers and have become the leading cause of their grievances.
Price cuts an inevitable aspect of DET
Director General Lee explained that Taiwan’s reimbursement prices take reference from the median prices of 10 other countries, each with their own unique considerations when it comes to drug pricing. In Taiwan, hospitals often profit from a price gap by receiving higher reimbursement prices while procuring drugs at low prices from suppliers, Director General Lee said, while also acknowledging that the current DET program is not ideal and that considerations in drug price adjustments would need to address whether drug makers are able to have a reasonable level of profitability to prevent the exit of drugs from the Taiwan market.
For example, prior to the exit of the antidepressant Prozac from Taiwan, the NHI’s reimbursement price was set at NT$2.08, while hospitals’ procurement prices ranged between NT$2.04 and NT$2.05, leaving them with little headroom to profit from the price gap. The NHIA later lowered the reimbursement price of Prozac to NT$1.96, which would mean that suppliers would be forced to sell the drug at a loss. Director General Lee also revealed that while his colleagues only carried out the drug price adjustments according to regulations, he personally discovered this unreasonable outcome of the DET and has accordingly asked for a list of drugs that are subject to unreasonable prices.
Public should rest assured that generic drugs equivalent to brand name drugs
Regarding the public’s doubts about the Taiwan-made generic drugs following the exit of brand name drugs, Director General Lee noted that many patients said that they have received different drugs for the same prescription, depending on whether they had sought care from a hospital or a clinic, while many doctors still feel that the quality of generics fall short of brand name drugs. However, from the government’s perspective, Director General Lee feels that he must stress the message that “generics are as good as brand name drugs,” and said that the quality of Taiwanese generic drugs meet global standards and that the Food and Drug Administration and local drug makers should promote this fact proactively.
Director General Lee said that he was distraught upon reading newspaper headlines describing how drugs are cheaper than candy in Taiwan. Director General Lee urged local generic drug makers to have the fortitude to repel hospital’s efforts at strong arming unreasonably procurement prices. Regarding drug makers’ appeal for government intervention, Director General Lee said that the Ministry of Health and Welfare has a plan to redirect some of the hospitals’ drug price gap profits to community pharmacies.
Cloud-based information system reduces drug wastage
On drug wastage, Director General Lee said that 80 percent of the NHI’s drug reimbursement spending is concentrated in 661 types of drugs, which include antitumor, immunomodulators and cardiovascular drugs. Through the cloud-based information system, redundant prescriptions can be identified and deleted, leading to a 22-percent year-on-year reduction in wastage during the first quarter of this year.
Director General Lee added that the cloud-based information system also serves as a platform for reporting ineffective drugs for auditing.
【2019-06-14 / HealthNews】
