Enabling Taiwanese patients to have access to innovative new drugs soon after their international launch, and supporting Taiwan’s efforts to become a hub in Asia for innovation and patent protection.
Reward for innovation is the key enabler for Taiwan to achieve a leadership position in the biopharmaceutical industry in the Asia Pacific region and fulfill the government’s ambition outlined in its “5+2 Industrial Innovation Plan.” The Pharmaceutical Committee recognizes the government’s effort in the last few years in building the foundation for reward for innovations. Major achievements were the enshrining of Patent Linkage provisions into the Pharmaceutical Affairs Act and agreement by the National Health Insurance Administration (NHIA) to introduce Managed Entry Agreements.
This year, the Committee highlights the following regulatory issues and suggested solutions:
Full implementation of Patent Linkage to protect both biologics and chemical compounds by June 30, 2019;
Improved access of life-saving, life-changing innovative drugs to patients through improving transparency, predictability, and sustainability of the reimbursement system; and
Accelerated reforms in pricing and participation in the current reimbursement system.
The Committee is convinced that by accelerating these reforms, the government will be providing the right incentives to fuel the growth in Taiwan’s biopharmaceutical ecosystem and provide sustainability to Taiwan’s healthcare system.
Suggestion 1: Implement Patent Linkage for both small and large molecule drugs by June 30, 2019.
The Committee two years ago applauded the milestone passage of provisions in the Pharmaceutical Affairs Act to establish a Patent Linkage (PL) system. Since then, both the R&D and generics segments of the industry have worked closely with the Ministry of Health and Welfare (MOHW) and its Taiwan Food and Drug Administration (TFDA) to ensure that the PL enforcement rules are aligned with international standards. We were pleased to see the government’s recent adoption of advanced standards that include both large and small molecule drugs within PL, the same as in Canada, Korea, and Singapore. Unquestionably, including big molecule products within PL will accelerate Taiwan’s drive to become the biomedical R&D hub in the Asia-Pacific region.
Based on the “Items Requiring Attention for the Legal Operation of Central Government Administrative Agencies,” the implementation rules should be set within six months of the promulgation of the law – in other words, by June 30, 2019. Without a clear timeline for implementation of the law, companies from both the innovation and generics segments of the industry may have difficulty preparing for the launch of the PL system. We urge the Executive Yuan to announce the implementation date as soon as possible to help ensure that President Tsai Ing-wen’s “5+2 Innovative Industries Plan” remains on the right track.
Suggestion 2: Expedite patient access to innovative medicines.
2.1 Allocate sufficient new drug/new indication budget to meet the need to reimburse life-saving, life changing drugs.
The Committee appreciated NHIA’s doubling of the new drug/new indication budget for 2018. However, the new drug/new indication budget for 2019 is less than the 2018 allocation. Both the pharmaceutical industry and patients are concerned that this year-to-year budgetary fluctuation and insufficient budgetary allocation will result in delayed or denied reimbursement approvals for new drugs. The insufficient budget also makes it difficult for both the industry and patients to predict when reimbursement for life-saving or life-changing drugs can become available to patients in need.
Horizon scanning is an established practice in advanced countries for reimbursement agencies to look ahead for products that will be launched in the next few years in order to secure multi-year budgets. The Committee recommends that NHIA adopt long-range budgetary planning based on a review of what life-saving and life-changing drugs will be launched in the coming years. For example, NHIA could prospectively allocate adequate new drug/new indication budget based on the projected financial impact of each pharmaceutical company’s new drug/new indication launches over the following five years. This practice could help improve predictability and sustainability beyond the current year-to-year budgetary practice.
For the short-term, the Committee urges NHIA to commit to doubling the current new drug/new indication budget for 2020. Longer range, we recommend that NHIA improve the predictability of life-saving and life-changing drugs’ reimbursement approvals by allocating sufficient funding for new drugs in a forward-looking manner.
2.2 Establish a co-payment mechanism for innovative medicines and proactively build consensus among stakeholders.
Co-payment, when properly considered and designed, can help alleviate financial pressure on the NHI and facilitate patient access to life-saving and life-changing drugs. Balancing the patient access with the NHI sustainability requires reform in the NHI financial structure. There is evidence that various stakeholders have begun to see the value of co-payment. The Committee therefore urges the NHIA to build consensus among stakeholders in designing an adequate co-payment mechanism for Taiwan.
In neighboring countries such as Japan and Korea, patients co-pay between 10% and 30% of the cost of the drugs. The government provides a subsidy if the total cost exceeds a predefined ceiling.
In Taiwan, a consensus is forming among stakeholders that co-payment should be made an option for high-priced new drugs. Many patient groups have been calling on the government to accelerate co-payment reform, and a poll by a cancer-related NGO in Taiwan indicated that almost 80% of the general public supports co-payment for new drugs to allow for better access. The majority of respondents say they would be willing to pay between 10% and 20% of the drug cost.
In February 2019, a meeting of the Pharmaceutical Benefits and Reimbursement Schedule Joint Committee (PBRS) concluded that NHIA should amend its rules to allow patients to co-pay for certain high-cost new drugs. As stakeholders have gradually become aligned in their support for co-payment, the Committee believes it is time for NHIA to move decisively in that direction while providing a safety net for disadvantaged groups.
2.3 Improve the transparency and efficiency of the new-drug review process.
The Committee commends MOHW and NHIA’s adoption of the international practice of Managed Entry Agreements (MEA) as an additional tool in the new drug reimbursement and negotiation process. We urge the government to make its next effort the improvement of patient access by increasing transparency and efficiency in the new-drug approval process.
There are two difficulties with the current reimbursement approval timeframe. First, there is no set time limit between key milestones in the reimbursement process. Second, the scientific information a pharmaceutical company submits for the registration and reimbursement processes is reviewed sequentially, creating delays.
The scientific data submitted to TFDA and NHIA for their respective independent reviews clearly overlap. An aligned, concurrent, information-sharing review could save significant time in getting a drug to market for the benefit of patients.
Canada’s experience in dealing with this problem provides a good model. To streamline the review process, Canada in June 2018 adopted a formalized sharing of information between agencies, with industry consent.
Increase transparency and predictability by setting a clear timeline between key milestones in the reimbursement process.
Learning from the Canadian experience, establish a consent-based, information-sharing platform between the TFDA and NHIA for parallel registration and reimbursement approval for innovative medicines.
Suggestion 3: Provide critical investment incentives for the biopharma industry to promote sustainable growth in the “5+2” plan.
With the aim of positioning Taiwan to be an Asia-Pacific Biomedical R&D hub, Taiwan’s biomedical industry was one of the first to be included in the Executive Yuan’s “5+2 Innovative Industries Plan.” Eyeing the international market, the 5+2 policy aims at strengthening industry competitiveness by upgrading domestic technology and attracting a more talented workforce. To realize this vision, Taiwan needs to embrace concrete enabling policies to create a more favorable environment and ensure the sustainable growth of the industry.
Member companies of the Pharmaceutical Committee are the key providers of innovative medicines and medical technology in Taiwan. Over the years, the member companies have introduced and transferred the most up-to-date technology and invested in talent cultivation to improve the overall capacity of the pharmaceutical industry in Taiwan.
Recognizing the benefits to their economies and healthcare systems, some OECD countries have adopted policies to encourage the development and introduction of new medicines in their markets. These policies include a commitment to providing sufficient budget for innovative new drugs, including the reinvestment of drug-price reductions to support that budget.
To realize its vision of Taiwan as the Asia-Pacific Biomedical R&D hub, the Taiwanese government can learn from the key enabling conditions that other advanced countries have used to attract investment to spur innovation. The Committee urges MOHW and NHIA to accelerate the following reforms:
Reward value for innovation through new innovative drug reimbursement prices.
According to the latest NHIA report on “Comparisons of New-drug Approved Prices and International Drug Prices in Recent Years,” current new-drug approval practices have resulted in prices far below the spirit of the rules intended to reward innovation. Reimbursement prices for new drugs in Taiwan from 2013 to 2017 were much lower than A10 median prices. The same was true for Category 1 breakthrough innovative medicines, even though in 2014 they had once reached the level of A10 median prices. The situation was even worse for Category 2A new drugs, whose reimbursement prices in 2016 and 2017 were even lower than the lowest A10 prices.
Moreover, under the current NHI reimbursement mechanism, the lowest price among new drugs in the same therapeutic field is used as the benchmark price for reimbursement. This mechanism not only fails to reflect the clinical differences among individual new drugs, but also cannot reasonably reflect the new drugs’ value.
According to the NHI Reimbursement and Payment Standards, “reference prices for Category 2A new drugs are based on drugs with similar efficacy that have been reimbursed in the past five years.” The original intention was to encourage new-drug launches. However, that potential effect is completely undermined by the current reimbursement mechanism.
Low reimbursement prices may decrease industry’s willingness to bring innovative medicines into Taiwan and to further invest in Taiwan. The Committee urges NHIA to review its current new-drug pricing practices and adhere to the spirit of reward for innovation to reflect the value of new medicines.
Improve the current DET system and reform the system of hospital discounts. a. Recalibrate each year’s Drug Expenditure Target (DET) baseline. The DET baseline should be revised from the current practice to one that benchmarks the previous year’s actual expenditure, multiplied by the annual growth rate in the Global Budget. In addition, newly reimbursed technology that was not included in the previous year’s Global Budget should be reflected in the DET target growth rate. b. Adopt a broader definition of patents for price calculation. Since breakthrough technologies and treatments might not be covered by compound patents (which is the only type of patent recognized by the NHIA in the pricing scheme), the Committee urges the NHIA to broaden the recognition of patent types to provide reward for innovation. c. Establish a sound R-zone mechanism.Single-source products require a 15% reasonable-zone (R-zone) in setting the reimbursement price. In these cases, the major compound has been off-patent or never had a registered patent in Taiwan, and the product is the only source available in this market, with no generic substitute. In the absence of price protection, the drug may have to be withdrawn from the Taiwan market, to the detriment of patients’ access to treatment. d. Ensure predictability in the drug-price adjustment mechanism for special-budget accounts.NHIA should establish a transparent, predictable drug- price adjustment mechanism for drug expenditures categorized in special-budget accounts (for example, HIV/HCV, rare diseases, and hemophilia). Lowering drug prices should not be the first and only solution when funds are insufficient, as currently appears to be the case for HIV drug reimbursement. The primary factor should always be the scientific evidence regarding the efficacy of the medication. The Committee urges the Taiwanese government to take a more comprehensive view regarding HIV treatment, including the allocation of adequate budget by the Centers for Disease Control (CDC) to ensure sufficient patient access to treatment, as well as the establishment of a sustainable and predictable HIV pharmaceutical pricing mechanism. e. Reconsider the hospital discounting process.After new medicines receive reimbursement prices from NHIA, hospitals will request further discounts as part of the procurement process. The growing demand for discounts on medicines in the hospital listing procedure has placed additional pressure on the pharmaceutical manufacturers. The Committee strongly recommends that MOHW and NHIA reconsider the hospital discounting process to prevent profit-driven procurement decisions from becoming another obstacle hindering patient access to innovative medicines in Taiwan. f. Multi-stakeholders involvement in reimbursement decision-making. Currently, the participants in PBRS meetings consist of medical representatives, scholars and experts, and representatives of payers. The Committee appreciates NHIA’s efforts that have led to patient representatives now being invited to attend PBRS meetings as observers, so that patients’ voices can be heard directly at the meeting. Unfortunately, however, the manufacturers of medicines are still unable to express opinions at the PBRS. The Committee urges NHIA to set up a formalized avenue for industry representation in the PBRS meetings to ensure multi-stakeholder involvement in reimbursement decision-making.
改進現階段藥費支出目標制度(DET)並改革藥價差制度 a. 調整每年度藥費支出目標基期值之計算：當年度基期值應修正為以前一年度之實際藥費支出金額乘以該年度健保總額成長率計算。此外，新給付但未包含於前一年度總額預算支出的新醫療科技應於該年度之藥費支出目標成長率予以適度反映調整。