Despite the widespread effects of the COVID-19 pandemic, Taiwan’s economy increased at a 6.28% annual rate in 2021, its highest growth rate in 11 years. But even during a period of robust economic growth and positive outlook, the Committee observes that Taiwan’s past momentum in investing in biopharmaceutical innovation – a critical factor in international competitiveness recognized by advanced countries – has stagnated. The state of Taiwan’s competitiveness at a time of global supply chain shifts is even more concerning. While neighboring countries have continued to invest boldly in biopharmaceutical innovation to firm up their international connections, Taiwan’s investment in new drugs and indications was at its lowest in recent years, as were its policy measures to ensure Taiwanese patients’ access to innovative treatments.
The Committee is deeply concerned about these developments, and urges Taiwan to take bolder steps to secure its place in the international innovative biopharmaceutical value chain. We also call on the government to set a clear and forward-looking policy objective to strengthen international connections and cooperation between the public and private sectors, increase public health resources, and invest further in innovative biopharmaceuticals within its excellent single- payer health insurance system to benefit people, patients, the medical communities, and the industry.
Suggestion 1: Improve Taiwan’s competitiveness in the international innovative biopharmaceutical value chain through Public-Private Partnerships (PPPs).
The COVID-19 pandemic has demonstrated the importance of ensuring ready access to critical innovative biopharmaceuticals in response to an emerging pandemic. The optimal course of action is to consistently play an active role in the global innovative biopharmaceutical value chain, from research and development to patient access. It is therefore essential to identify Taiwan’s weaknesses and opportunities and work to gain a competitive position in the international innovative biopharmaceutical value chain.
Taiwan is home to some of the world’s most prolific researchers and health professionals, and there are ample opportunities to capitalize on this domestic ability. It is critical for Taiwan to ensure that its talent stays connected and competitive internationally, both in practice and in research capacity, for a treatment population that is on par with that of high-income countries. This can be accomplished by ensuring that Taiwan’s clinical and treatment settings are aligned with international guidelines.
Taiwan is experiencing a widening disparity between local and international treatment environments. The inconsistent increase of budgets in Taiwan for new drugs and indications has slowed the medical community’s ability to access innovative treatment options. Meanwhile, South Korea and Singapore have made rapid progress in ensuring that their medical communities have access to innovative treatment options on par with international treatment guidelines, which has helped create a treatment setting conducive to innovative biopharmaceutical research and development.
Over the years, the Committee has advocated for Taiwan to make international connectivity in the innovative biopharmaceutical value chain a top priority. The Committee urges Taiwan to work to ensure the continuity of its competitive advantage in talent and close the gaps between clinical settings and populations to create a clinical and research environment aligned with international standards.
The Committee commends Taiwan for taking measured steps toward regulatory reform, such as by adopting the Regenerative Medicine Development Law. We urge the government to take bold actions to align patient populations and treatment options with international treatment guidelines in key areas, including precision medicine, oncology, gene and cell therapies, and other innovative treatments. Members of the Committee stand ready to collaborate with and support Taiwan through PPPs, with a focus on improving Taiwan’s competitiveness in the global biopharmaceutical value chain.
Establish an Executive Yuan-level inter-ministerial task force with the international biopharmaceutical industry to draw up an acceleration policy roadmap and cross- ministerial funding sources for Taiwan’s international biopharmaceuticals. This will close the gap in key focus areas in the international biopharmaceutical value chain. Government stakeholders may include the Ministry of Health and Welfare, National Development Council, Ministry of Economic Affairs, and Ministry of Digital Affairs, among others.
Consider openness, security, and reliability in establishing public-private partnerships to foster public consensus and support for critical areas of Taiwan’s public health agenda, such as precision medicine, digital health, and big data utilization.
Suggestion 2: Expand the annual healthcare budget by improving the horizon-scanning approach and securing multiple funding flows.
The Committee thanks the government for its adoption last year of a horizon-scanning approach to budgeting for new drugs and new indications to accelerate the launch of new pharmaceutical products and improve patient access to innovative treatments. However, the new drug/new indication budget for 2022 is the lowest in recent years. The Committee is concerned that such a small budget will affect the competitiveness of Taiwan’s pharmaceutical market as well as patients’ access to new medicine, which is a much broader concern within Taiwan’s population.
During this period of high economic growth, we strongly urge the government not to underestimate the importance of its investment in healthcare and remind it of its duty to safeguard the new drug/new indication budget. Although Taiwan’s National Health Insurance (NHI) system faces financial challenges, long-term investment in new drugs is vital to establish a sustainable healthcare system and protect people’s health.
2.1 Prioritize patients’ unmet needs under the horizon-scanning approach and regularly communicate with the industry to improve budgeting methods. Due to limited resources, the horizon-scanning approach adopted by the National Health Insurance Administration (NHIA) includes a uniform NT$200 million cap for individual products and is thus inadequate for satisfying the unmet medical needs of many patients, particularly in the fields of oncology and rare diseases. To improve this approach, the Committee suggests consulting the industry and prioritizing the allocation of sufficient resources to fully address patient needs. Moreover, the budget- preparation method should be continuously discussed and improved. We therefore urge the government to regularly communicate with the Committee, preferably every January and March during the budget determination period, to collect our feedback and suggestions on setting the annual budget.
2.2 Secure multiple funding flows for the new drug/new indication budget. The spirit of the NHI is to harness the collective power of the government, enterprises, and individuals to ease the economic burden associated with seeking medical treatment and to improve citizens’ wellbeing. As Taiwan’s population ages and new medical technologies are developed, medical expenditures in Taiwan continue to grow. Given the limits on the NHI Global Budget, the budget for new drugs and new indications has stagnated. This insufficient budgetary allocation leads to cost-oriented reimbursement decisions and a lengthier review process. The widening gap between the scope of reimbursement and approved indications has also failed to meet patients’ medical needs by hindering their timely access to innovative medicines.
Patient groups and the industry have continued to raise proposals on how to expedite access to new drugs and improve their affordability. We suggest that the government learn from the experience of advanced countries in establishing multiple funding flows. In the short term, those sources could be allocated from the government budget and new-drug copayment scheme. Longer-term, we recommend establishing funds and creating supplementary insurance schemes for new drugs. Such an initiative could also help resolve the NHI’s financial predicament.
Suggestion 3: Continue the DET pilot program and work with industry to explore improvements to the drug-price adjustment mechanism.
The Committee has appreciated the government’s implementation of the Drug Expenditure Target (DET) pilot program as a way to address the shortcomings of the previous Price-Volume Survey (PVS) through improved predictability. Eight years have passed since the program’s introduction in 2013. In light of the rapid changes taking place in medical innovation and technology, a holistic evaluation of the program’s implementation and support for future adjustments to drug-price policy is necessary.
3.1 Maintain the DET pilot program. We believe that the DET should continue to be implemented on a pilot basis, and that the government should continue to communicate and coordinate with pharmaceutical companies and industry associations to seek ways to ensure the stability of drug supplies, foster the industry’s sustainable development, and safeguard the public’s right to drugs.
3.2 Schedule only one DET price adjustment per year. Frequent drug price adjustments can seriously complicate the business-planning activities of the pharmaceutical industry and impact the stable supply of drugs. In
addition, given the current scope of NHI coverage, the complicated procurement negotiation process that follows such adjustments has resulted in a heavy burden on hospital operations. The Committee therefore recommends that drug-price adjustments be conducted only once per year.
3.3 Include industry voices early in the process of adjusting drug prices and ensure that the process adheres to principles of predictability, stability, and fairness. Policy formulation or revisions inevitably impact the business operations of drug providers, who are a cornerstone of the medical ecosystem. The Committee hopes to cooperate with the government in its drug-price policy planning (for example, in reforming reimbursement standards, establishing a mechanism for addressing price gaps, and other ways) by joining the discussion early in the process and helping reduce any unnecessary adverse impact. Price adjustments that are based on market fairness, stability, and predictability will encourage long-term investment by multinationals in Taiwan, and the continuous introduction of innovative drugs will benefit the Taiwanese people.
Suggestion 4: Improve MEA practices to enhance the renewal negotiation process and protect confidentiality.
The Committee appreciates the government’s adoption in 2018 of Managed Entry Agreements (MEAs) as one of its methods for NHI reimbursement. Adoption of the practice, when it adheres to principles of mutuality and due process, puts Taiwan in sync with international drug reimbursement trends, helps accelerate the introduction of new drugs and improves the accessibility of new treatments for patients. MEAs are in essence risk-sharing mechanisms that allow the government and the pharmaceutical industry to reach agreement on the preservation of confidentiality and other mutually beneficial terms.
From 2021, member companies started to experience issues when renewing and terminating MEAs. At the termination or renewal of an MEA, principles of scientific evidence, patient needs reflected in actual demand and usage of the drugs, and confidentiality of the existing MEA terms should continue to be observed. In the course of implementation, the Committee urges the government to address any issues in the MEA procedure related to breach of confidentiality and lack of mutuality, and to meaningfully engage with industry and make improvements on the issues based on the Committee’s recommendations.
4.1 Ensure the transparency and predictability of the procedure for MEA renewal and termination negotiations and provide a reasonable amount of time for such negotiations to be completed.The current system does not clearly define the terms and procedures for MEA termination or renewal and negotiations, which makes
it difficult for member companies to effectively evaluate the proposed renewal terms and make counter-proposals. Given the complexity and product-specificity of MEAs, sufficient time and flexibility should be provided, and mutuality ensured, so that parties can prepare, propose, and respond to terms.
The Committee thus recommends that the government provide a clear procedure for MEA termination and renewal negotiations in which mutuality between parties is observed. In the process of negotiation and evaluation, recommendations arising from negotiations should be scientific and empirical, and the industry should be informed of the evaluation in advance, so that both parties can reach a mutually acceptable consensus.
4.2 Review regulations to ensure the preservation of confidentiality and protect trade secrets of the industry.Currently, there is no standard procedure for exiting MEA renewal negotiations when consensus on terms is not reached. Regardless, the government should fulfill its duty of maintaining confidentiality in such cases. It is essential that the MEA terms are treated as confidential and not leveraged to secure further discounts during renegotiations. Companies should thus be allowed to include confidentiality and termination clauses in MEAs and renewals.
政府在運用前瞻性掃描方式編列新藥及新適應症預算，考量資源有限，在預算編列上統一設定2億元上限，忽略「未滿足之病患需求」（unmet medical need），特別是在癌症與特殊疾病之領域。委員會建議透過與業界溝通及優先分配足夠的資源，以滿足病患需求。此外，在預算編列方法學上，政府也應持續討論及改善。委員會呼籲政府應在年度預算編列之際，定期與本委員會溝通討論，建議於每年1月及3月定期討論，以實質提供年度預算編列之建議。