The Committee appreciates the government’s continued efforts to strengthen Taiwan’s pharmaceutical supply resilience and in this paper offers our recommendations to further enhance that resilience, safeguard the sustainability of the National Health Insurance (NHI) system for the benefit of Taiwanese patients, and strengthen Taiwan’s international competitiveness.

In light of evolving global political and economic developments and their potential impact on international drug pricing and new drug launch strategies, Taiwan’s current drug pricing structure may have implications for supply stability. Under evolving policy conditions, this may further affect patients’ timely access to innovative therapies.

At this critical stage of Taiwan-U.S. pharmaceutical cooperation, the Committee provides policy recommenda-tions aimed at strengthening healthcare system resilience, supporting the sustainability of the NHI system, and enhancing Taiwan’s global competitiveness. Through deeper public-private collaboration, we aim to jointly support the long-term development of innovative healthcare in Taiwan.

Suggestion 1: Establish a regularized policy dialogue mechanism to strengthen healthcare collaboration and align with international practices.

1.1   Formalize a U.S.-Taiwan pharmaceutical policy dialogue mechanism. The Committee welcomes the major breakthrough achieved in addressing U.S. tariff measures affecting Taiwan. The resulting agreement has granted duty-free treatment in the U.S. market for generic drugs and active pharmaceutical ingredients (APIs) from Taiwan. To further the bilateral cooperation, we also look forward to seeing increased U.S. investment in Taiwan’s biotechnology sector as part of the “Five Trusted Industries” outlined by the President Lai Ching-te administration.

As pharmaceutical and biotechnology collaboration between the United States and Taiwan deepens, a more structured mechanism will be needed to sustain progress, ensure alignment, and address emerging global challenges. We therefore urge creation of a formal U.S.-Taiwan pharmaceutical policy dialogue to facilitate regular, institutionalized exchanges among government representatives and relevant stakeholders such as manufacturers, scholars, and other experts on topics such as the introduction of innovative medicines, regulatory alignment, and pharmaceutical pricing developments. In the interest of supporting the effectiveness of that platform, we recommend that the National Health Insurance Administration (NHIA) conduct biannual consultations with industry to jointly review international economic and pharmaceutical pricing trends.

To extend this kind of dialogue beyond the bilateral level, the Global Cooperation and Training Framework (GCTF), through which Taiwan shares its expertise in various areas with global partners, can be leveraged to expand international engagement and showcase Taiwan’s strengths in healthcare governance.

1.2   Align drug reimbursement with international treatment guidelines to enhance global clinical value positioning. The Committee commends the government for its Healthy Taiwan policy vision, a national initiative prioritizing improvements in cancer care. The policy calls for aligning cancer drug reimbursement conditions with international treatment guidelines, thereby improving access to medicines for patients such as those diagnosed with lung, breast, and colorectal cancers.

However, significant gaps remain between Taiwan’s reimbursement conditions and international treatment guidelines for non-cancer medicines and certain cancer therapies. These include limitations on the eligible patient population, restrictions on prior lines of treatment, and constraints on treatment duration or dosing. This misalignment not only affects physicians’ ability to provide optimal care, but also limits Taiwan’s participation in international clinical trials, constrains the accumulation of clinical experience and opportunities for collaboration, and ultimately undermines the global competitiveness of the domestic healthcare system.

To address this weakness, the Committee recommends that the government accelerate the alignment of reimbursement conditions across all disease areas with international treatment guidelines, thereby strengthening the long-term sustainability and global competitiveness of Taiwan’s healthcare system.

Suggestion 2: Ensure fair R&D cost-sharing to support global new-drug launch strategies.

2.1   Implement evidence-based funding mechanisms to support innovative therapies and strengthen health system resilience. The introduction of innovative medicines is a key driver of healthcare quality and industry competitiveness. The Committee welcomes the government’s establishment in 2025 of a dedicated Cancer Drugs Fund for cancer therapies, expected to reach about NT$10 billion when fully funded.

To ensure the effective and sustainable use of such funding, budgeting for new drug expenditures within the NHI system should be based on a medium- to long-term outlook, rather than relying on a single set of data indicators. This more comprehensive approach would incorporate multiple evaluation metrics and decision-support tools, including horizon scanning, as an early awareness and alert system collecting and analyzing existing information to anticipate future developments. It would enable a more holistic assessment of whether government investment and policy directions can achieve intended health outcomes, while ensuring the adequacy and precision of resource allocation, maintaining policy alignment, and safeguarding uninterrupted patient access to medicines.

A stable regulatory environment and effective incentive mechanisms remain critical to attracting multinational pharmaceutical companies to invest in clinical trials and R&D collaborations in Taiwan. The Committee therefore stresses the importance of ensuring that any future regulatory revisions safeguard existing incentives for the introduction of innovative medicines, such as pricing premiums for drugs supported by domestic clinical trials. Such mechanisms will strengthen Taiwan’s healthcare capacity and global competitiveness while enabling patients to benefit earlier from globally innovative therapies.

2.2   Review drug pricing regulations and introduce new incentive mechanisms to maintain Taiwan’s advantage in innovative drug launches. In light of evolving global political and economic developments, companies’ global headquarters are reviewing pricing structures and adjusting new-drug launch strategies.

To maintain Taiwan’s competitiveness in introducing innovative medicines, the Committee recommends implementing the NHI Pharmaceutical Reimbursement and Payment Standards, including pricing based on the median of 10 reference countries. Additional value-based price adjustments should reflect clinical effectiveness, safety, convenience, and pediatric use, alongside incentives for domestic clinical trials and pharmacoeconomic studies.

The successful launch and stable supply of innovative medicines depend on a predictable investment environment and market competitiveness. In alignment with Healthy Taiwan and supply resilience strategies, the Committee recommends establishing clear pricing premiums and reimbursement incentives to encourage the introduction of new medicines. Priority support should be given to therapies addressing urgent unmet medical needs, medicines critical to supply resilience, and products from companies establishing R&D centers or manufacturing bases in Taiwan. Such measures would reinforce investment confidence and strengthen Taiwan’s position as a trusted pharmaceutical supply chain hub in the Asia-Pacific region.

2.3   Strengthen due process and predictability to optimize pharmaceutical reimbursement agreement mechanisms. The Committee commends the government for its continued engagement with industry stakeholders to improve pharmaceutical reimbursement agreement mechanisms, recognizing these agreements as a critical tool for accelerating access to innovative therapies while addressing global price referencing pressures.

Currently, policy implementation tends to prioritize short-term financial controls, including high rebate requirements and hard spending caps. However, under the increasing cross-border impact of international reference pricing systems, the actual net price obtained in each market has become a key consideration in global pricing and market access strategies. If prices in Taiwan are excessively compressed, influencing or constraining pricing in other markets, companies may be compelled to give Taiwan lower priority within their global launch strategies.

Therefore, Taiwan’s pricing framework should strengthen procedural fairness, reasonable risk sharing, and policy predictability to ensure financial sustainability while promoting health system resilience and long-term public interest.

The Committee recommends adopting a framework for pharmaceutical reimbursement agreements that simplifies procedures, strengthens due process, and enhances predictability, enabling the mechanism to serve as a stable foundation for introducing innovative medicines. Specifically, agreements should be based on an equal footing in negotiations between contracting parties, the avoidance of multi-layered agreements with their over-complexity, implementation of reasonable rebate levels, adoption of predictable procedures grounded in scientific calculations, and assurance of strict confidentiality of terms. Such improvements would enhance the international competitiveness of Taiwan’s pharmaceutical market and encourage multinational companies to prioritize Taiwan when launching innovative medicines.

Suggestion 3: Establish a drug lifecycle management system that safeguards innovation, balances public and private power, and ensures predictability.

3.1   Enhance drug supply resilience by ensuring that lifecycle price adjustment mechanisms consider IPR protection and adhere to principles of fairness. The Committee welcomes the government’s implementation of drug price adjustments as part of NHI financial management, so as to take patient access to medicines and drug supply resilience into account, while also aiming to enhance predictability. Although the Drug Expenditure Target (DET) system, a budget control mechanism used to manage pharmaceutical spending, has been continued on a pilot basis, the baseline value used for DET calculations does not reflect actual drug expenditures and has remained unchanged for over a decade. The result is an underestimation of actual expenditures and distorted pricing signals, which may undermine supply stability, affecting resilience. We urge NHIA to engage with stakeholders to recalibrate the baseline value.

From a pharmaceutical lifecycle perspective, the Committee is concerned that the government currently provides price protection only to innovative drugs with primary active-ingredient patents. This approach is inconsistent with internationally recognized patent scope. As a result, innovative medicines that still hold valid patents at the time of market authorization in Taiwan may nevertheless be subject to price reductions based on the patent expiry rule. This practice under-mines the lifecycle value of innovative medicines and leads to delays in the launch of new drugs in Taiwan.

Since many countries have begun to reference international reference pricing, different national reimbursement systems are available for comparison in seeking to strengthen the fairness of Taiwan’s current reference mechanisms to maintain international confidence in Taiwan’s pricing system.

3.2   Address the issue of price gaps and take steps to reduce uncertainty and enhance competitiveness. Under the new conditions, referenced price structures are no longer limited to list prices. Net prices, including the effects of rebates, discounts, and hospital pricing practices, now also affect the price consistency and stability.

The Committee commends the Ministry of Health and Welfare and NHIA for their commitments, stated on several occasions last year, to gradually improve Taiwan’s drug pricing framework. The Committee recommends that they continue to dialogue with industry and initiate concrete action plans to progressively narrow price gaps, thereby enabling a more efficient allocation of healthcare resources.

3.3   Adopt a balanced approach in setting subordinate regulations under the amended Pharmaceutical Affairs Act. The Committee commends the government for completing the amendment to Article 27 of the Pharmaceutical Affairs Act, strengthening drug supply resilience and shifting the governance approach from ex-post facto shortage response to proactive front-end risk management. Nevertheless, the associated subordinate regulations may have significant practical implications for industry operations, supply forecasting, inventory management, and market allocation.

We recommend that subsequent reporting, notification, and supply intervention measures adopt a risk-based and differentiated management approach, so as to avoid imposing excessive administrative burdens on products with stable supply. In addition, forecast data should be used solely for risk monitoring purposes and not as a basis for punitive actions.

The Committee also calls on the authority to maintain ongoing dialogue with industry stakeholders to ensure that regulatory intervention is aligned with the principles of necessity and minimal infringement, and to jointly achieve the shared objective of enhancing drug supply resilience.