Summary
Taiwan's pharmaceutical market is one of the more developed in the Asia Pacific region. In 2006, the market was estimated to have reached US$4.15bn at consumer prices, equivalent to approximately 17% of total health expenditure. Drug sales have risen in recent years (to around 1.1% of GDP), due mainly to the over-prescription of antibiotics, which has also led the population to develop one of the highest rates of antibiotic immunity in the world. The government will be seeking to address this problem, which is likely to result in the lower pharmaceutical revenues for the segment over the coming period. Other developments that will conspire to lower the overall values of the prescription and branded sectors in particular include the November 2006 price cuts - with many of the 5,359 drugs affected by the plan set to be replaced by low-cost generic versions - as well as the pending reduction in the level of reimbursement received by hospitals from the Bureau of National Health Insurance (BNHI). The authorities are seeking to rationalise public spending and tackle the vast difference between the actual price for drugs paid to pharmaceutical companies by healthcare service providers and the higher level of reimbursement claimed from the BNHI. In turn, hospitals and clinics may demand greater discounts from manufacturers, which will have a downward impact on their local revenues.
In terms of its business environment context, Taiwan's pharmaceuticals market presents more of a longterm rather than immediate prospect for multinational companies, thus retaining its ninth position in BMI's revised Business Environment Ranking Table for 14 Asian markets. While the country's healthcare and pharmaceutical industry is an increasingly attractive target for foreign direct investment
(FDI) owing to its ageing population, significant barriers still remain. These are mostly evident in the area of intellectual property (IP) issues, pharmaceutical pricing structures, registration rules, research regulations and distribution practices. Additionally, the country's political relations with mainland China may negate some of the encouraging aspects, as may the international industry's increasing interest in the Chinese market.
In order to address the nascent position of Chinese pharmaceutical manufacturing, Taiwan will continue to promote its biotechnology sector. One of the most recent developments in that field is the government's programme for the creation of a new science park. The US$900mn National Biotechnology Park is due to house centres for special biotech disciplines, such as translational and genomic medicine. The government is planning two more such sites, one focusing on pharmaceuticals and research and development (R&D), and the other on manufacturing of dental and orthopaedic equipment, scalpels, and micro-electromechanical systems.
|
