President Lai’s initiative to freeze drug prices by suspending the NHI drug price and volume survey for three years has been well received by hospitals and the pharmaceutical industry. However, patient groups have expressed concerns about the impact on funding for new innovative drugs. The Ching Kang Foundation for Pharmacy Promotion shared conclusions from a conference on the Drug Expenditure Target (DET) system. The panel suggested setting an upper limit on drug price differences or reducing the drug price difference ratio to overturn the outdated practice of “using profits from medicine to support medical services”. 

The DET system uses the drug price and volume survey mechanism to compare differences between hospitals’ actual purchasing prices and NHI reimbursement prices. The NHIA then carries out price adjustments based on the survey results. The Ching Kang Foundation pointed out that, according to Article 62 of the NHI Act, a global budget for drug expenditures should be established. When actual expenditure exceeds the preset budget, the government should adjust drug prices in the following year, and the excess amount should be deducted from payments made to medical institutions in the current quarter. However, this provision has not been implemented since it was passed more than 10 years ago.

Ms. Shen Li-Jiuan, President of the Ching Kang Foundation, pointed out that the purpose of this provision is to prevent overprescription, which directly contributes to drug expenditure. Therefore, this provision, which empowers the NHIA to claw back excessive drug costs from medical payments, is based on the concept of shared responsibility, encouraging hospitals to be more cautious in their prescribing practices.

In Taiwan, NHI-contracted healthcare providers are highly dependent on the drug price gap to sustain their operations. This practice seriously undermines the sustainability of the healthcare system. Ms. Shen pointed out that Taiwan is the only country in the world that allows hospitals to retain profits from the drug price gap, whereas in other countries, such profits are returned to payers to improve healthcare reimbursement standards.

Ms. Shen continued that the core value of the healthcare system is to provide patients with appropriate treatment and adequate medications. She suggested that the NHIA fully implement Article 62 by setting an upper limit on the drug price gap and deducting excessive spending from medical payments, or by reducing the drug price gap to below 5%. This would help eliminate hospitals’ dependence on profits from drugs.

【2026-03-20/ United Daily】