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2024-02-28| Policy

Taiwan’s Drug Price Adjustments: Balancing Cost and Availability

by Oscar Wu
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Taiwan’s National Health Insurance Administration (NHIA) has announced a series of drug price adjustments set to take effect in April, sparking a complex debate within the healthcare sector. With a reduction totaling 55.3 billion Taiwanese dollars, this marks the smallest decrease in recent years, yet it has not quelled industry concerns about potential drug shortages and the sustainability of drug supply.

Concerns Over Potential Drug Shortages

The pharmaceutical industry has voiced apprehensions that the price adjustments might lead to drug shortages, particularly for older medications that have been on the market beyond their patent period. Such shortages are feared to become apparent six months post-adjustment. The primary concern revolves around the profitability of manufacturing drugs at reduced prices, especially when large hospitals exert significant bargaining power, potentially pushing manufacturers to halt production.

Huang Jinshun, chairman of Federation of Taiwan Pharmacists Associations, said that 7% of the new medicines were cut, while over 90% of the old medicines exceeded the patent period, and the most important thing to worry about is the shortage of old medicines.

Government’s Stance on Drug Availability and Pricing

In response to these concerns, Minister Shih-Chung Chen of the Health and Welfare Ministry emphasized that the adjustments were made with careful consideration to not impact drugs with low alternatives, ensuring they are exempt from price reductions. This move indicates a deliberate effort to balance cost savings with the need to maintain a stable drug supply.

Furthermore, Shi Chong-liang, Director of the National Health Insurance Administration, pointed out that the drug supply is influenced by multiple factors, suggesting that attributing potential shortages solely to price adjustments oversimplifies the issue. The NHIA has also opened a window for drug manufacturers facing cost inadequacies to submit cost analysis data for price adjustment suggestions, signaling a willingness to negotiate and adjust as necessary.

Aiming for Cost Down the Recent Drug, Turn into New Medicine Development

The overarching goal of these adjustments is to achieve annual savings of NT$55.3 billion, with a reduction in 4551 items and an increase in 17 items, which will then be redirected towards incorporating new medicines into the health insurance scheme. This strategy underlines Taiwan’s commitment to making innovative treatments more accessible while ensuring the healthcare system remains financially sustainable.

Efforts to Reform and Address Shortages

The NHIA is also engaging in broader efforts to reform health insurance drug policies, including incentivizing domestic pharmaceutical production to bolster the local industry. However, these reforms require careful legal amendments and industry discussions to ensure they effectively address the concerns raised by price adjustments.

Despite the intention behind the price adjustments, there remains a call for transparency in how the saved expenses will be utilized and a concerted effort to ensure essential drugs remain available to patients. As Taiwan navigates these adjustments, the balance between cost savings and drug availability remains a critical concern for all stakeholders in the healthcare sector.

Conclusion

Taiwan’s recent drug price adjustments reflect a nuanced approach to healthcare management, aiming to reduce costs while ensuring the availability of essential medications. As the NHIA and the Ministry of Health and Welfare navigate industry concerns and logistical challenges, the focus remains on maintaining a balance that benefits both the healthcare system and the patients it serves. With continued dialogue and adjustments, Taiwan aims to secure a sustainable and innovative healthcare future.

References:

  1. https://www.taiwan-healthcare.org/zh/news-detail?id=0s9hqxkybu0pdeej&utm_source=EZMail&utm_medium=email&utm_campaign=dailynews_0227
  2. https://tw.news.yahoo.com/%E5%81%A5%E4%BF%9D%E8%97%A5%E5%83%B94%E6%9C%88%E8%B5%B7%E8%AA%BF%E6%95%B4%EF%BC%81%E5%B9%B4%E7%9C%81553%E5%84%84%E5%85%83%E5%B0%87%E6%8C%B9%E6%B3%A8%E6%96%BC%E6%96%B0%E8%97%A5-102230392.html
  3. https://www.msn.com/zh-tw/health/other/%E5%B9%B4%E5%BA%95%E5%9B%A0%E8%97%A5%E5%83%B9%E7%BC%BA%E8%97%A5-%E7%9F%B3%E5%B4%87%E8%89%AF%E5%9B%9E%E6%87%89%E4%BA%86/ar-BB1iUb0D?ocid=ems.msn.dl.ZambeziRiverZambia&cvid=73f0d07aa35c4689ad93f11418769b35&ei=3
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