COUNTRY REPORT: TAIWAN
Increased healthcare spending will impact Taiwan’s pharma industry
Taiwan’s healthcare financing to pose risks for drugmakers Reimbursement prices tend to be lower due to the government’s single-payer status.
D
espite the wide recognition that Taiwan’s healthcare system receives with its innovations, novel pharmaceutical products are expected to see constraints to their growth prospects in the near future. This has been mainly due to the country’s singlepayer healthcare financing system with the National Health Insurance (NHI). Taiwan has an exceptional health insurance scheme, with NHI being deemed a high performing healthcare system by regional standards. Enrolment in the NHI system is compulsory for all local citizens and the program offers a comprehensive set of services, including outpatient visits, hospitalisation, Western and Chinese medication, and dental treatment. TThe main reason behind NHI’s high performance is the ability of the government to set and regulate fees and to impose a global budget system that caps total NHI expenditure. At the same time, NHI’s IT-driven administrative system provides high administrative efficiency at a low cost, becoming another important factor in the financing system’s performance. The latest data from Fitch Solutions show that the healthcare financing system will be the main driver of the country’s healthcare expenditures in the next decade. That said, Taiwan also aims to rein in healthcare costs. “Whilst the total insurance premium rate is already 24
HEALTHCARE ASIA
Novel pharmaceuticals in Taiwan to see constraints to their growth due to NHI
a low 4.69% of the insured’s wages, it is shared between the employee, employer, and government. Low-income households are exempted from paying premiums, and also receive healthcare for free,” Fitch Solutions stated. However, the report also pointed out that there are pitfalls with the country’s healthcare system, despite being largely affordable. Taiwan has only 2.3 physicians per 1,000 population and only 7.1 nurses and midwives per 1,000 population, which places it as having one of the lowest healthcare workers in the developed countries, alongside other Asian countries such as Singapore and South Korea. Meanwhile, the increasing health insurance premiums has also become a hot topic in the country. The Fitch Solutions report stated that as of the start of 2021, the government raised premiums from 4.69% to 5.17% and supplemental premiums from 1.91% to 2.11%. “Even with the increase, the NHI administration projects the reserve fund will be exhausted by 2023,” the agency forecasts. With these projections, financial difficulties brought by the increased healthcare spending will impact pharma manufacturers and the country’s spending. The impact on drug prices, especially for new and innovative medicines, are another aspect of the NHI financing system that needs to be looked into.
