The National Health Insurance Administration, MOHW, has planned a reform policy for health insurance pharmaceuticals, offering three significant incentives to encourage domestic pharmaceutical manufacturers to produce new drugs, biosimilars, and high-quality generics in Taiwan. If they comply with the regulations, they could receive the highest health insurance pricing, comparable to or even exceeding the price of original drugs.

Industry insiders point out that this initiative by the Ministry of Health and Welfare (MOHW) is a significant encouragement for Taiwan's pharmaceutical industry. If successfully implemented, it is expected to boost the industry’s output, which is valued at hundreds of billions of NTD, and increase the production scale of domestically produced generics, potentially adding over ten billion NTD to the industry’s value.

This reform is seen as a win-win for both the added value of the pharmaceutical industry and the efficiency of the National Health Insurance system.

Since taking office last year, Shih Chung-Liang, Director-General of the NHIA, has proposed multiple health insurance drug reform plans to address domestic drug shortages while fostering the development of the local pharmaceutical industry. In early July, NHIA Deputy Director-General, Pang Yi-Ming, introduced the latest reform plan, which is expected to be announced soon, aiming for implementation early next year.

According to the NHIA's pharmaceutical reform plan, there are three main points crucial to the development of the domestic pharmaceutical industry:

1. Encouraging Domestic Production of New Drugs: New drugs that have obtained international marketing approval within two years, or new drugs approved in ten advanced countries for over five years but are new compounds in Taiwan, if manufactured domestically, will be eligible for the highest health insurance pricing, similar to first-to-market new drugs in Taiwan.
2. Pricing Parity for Biosimilars and Generics: For domestically produced drugs, generics, or biosimilars that apply within five years after the original drug's patent expiration, the first two applications for generics undergoing bioequivalence (BE) testing domestically and biosimilars will be eligible for pricing equivalent to the original developer's drug.
3. Incentives for Using Domestic Raw Materials: Domestically produced drugs using locally produced raw materials, those with safety clinical trials published in international academic journals and listed in the package insert, and generics that have filed P4 patent declarations with the central health authority and obtained drug approval will be eligible for a 10% increase in health insurance pricing.

The proposed health insurance pharmaceutical policy reform has been met with high expectations from related industry associations. Chen Yi-fen, Chairman of the Taiwan Generic Pharmaceutical Association (TGPA), emphasized the importance of stable domestic drug supply and expressed strong support for the series of reform measures promoted by the NHIA since last year.

According to NHIA statistics, the total drug expenditure claimed under the National Health Insurance in 2023 exceeded 240 billion NTD. Chien-Hung Lee, Director of the Chinese Pharmaceutical Manufacture and Development Association (CPMDA), noted that generics accounted for approximately 85 billion NTD of this amount, with domestically produced generics constituting only 54%, about 45.9 billion NTD, while nearly half came from imported generics. He hopes that the health insurance pharmaceutical policy reform will enhance support for domestic manufacturers, driving higher quality development in the local pharmaceutical industry.

Resource (mandarin): 健保藥品改革祭三利多 鼓勵本土藥廠...最快明年初上路