Taiwan is a developed island economy on the East China Sea with a population of 23.4 million. According to the IMF, Taiwan’s economy grew at 2.2% in 2016, and its PPP adjusted GDP per capita is $48,000, compared to $41,300 in Japan and $15,400 in mainland China. Taiwan is one of the wealthiest economies in East Asia, behind only Hong Kong and Macau.
Market Size and Growth
Taiwan’s pharmaceutical market is currently worth $5.6 billion, and is projected to grow at 4% in 2017. The size of Taiwan’s pharmaceutical market is similar to that of the Philippines, a country with more than four times its population. Key drivers of Taiwan’s drug market include a rapidly ageing population, the increase of non-communicable diseases and the rise of medical tourism.
Healthcare System
Despite spending only 7% of GDP on healthcare, Taiwan has a robust public healthcare system that provides its population with affordable and quality care. Taiwan has reached almost universal healthcare coverage under its compulsory single-payer National Health Insurance (NHI) system. The NHI provides a range of services and products, including both Western medicines and Traditional Chinese Medicines (TCMs).
Regulatory Overview
Taiwan’s pharmaceutical market is regulated by the Taiwan Food and Drug Administration (TFDA), an agency that operates under the Ministry of Health and Welfare (MoHW). The TFDA’s Division of Medicinal Products is responsible for the registration, approval and management of drug products. The Center for Drug Evaluation (CDE), commissioned by the TFDA and MoHW, is also responsible for the pre-market and post-market review of medicinal goods.
Drug Registration and Updates
In 2015, the TFDA approved 170 new drug applications, 143 of which were applications of imported drugs. According to the TFDA 2016 Annual Report, pharmaceutical products are divided into either Active Pharmaceutical Ingredients (APIs) or their finished products. The finished products category is further divided into new drugs, bioagents, generic drugs and orphan drugs.
All imported pharmaceutical drugs must be registered with the TFDA. According to the TFDA, the first step of registration for foreign drug manufacturers is to confirm that their overseas manufacturing plant can meet Taiwan’s GMP. Once this has been met, the drugs are further classified as either new or generic drugs, and registered according to the Guidelines on Drug Review and Approval.
In May 2015, the TFDA made a number of amendments to the registration fees of Western drugs:
- Drugs with New Chemical Entities (NCEs): TWD 800,000 (USD $26,000)
- Drugs with new administration route or new therapeutic compound: TWD 300,000 (USD $10,000)
- Drugs with new dosage, form, or unit strength but with the same administration route or therapeutic compound: TWD 150,000 (USD $5,000)
In July 2015, the TFDA announced the GMP for the distribution of Western Pharmaceutical Products to ensure the standards of medicinal supply-chains. Foreign pharmaceutical companies in Taiwan that already have Western pharmaceutical product registrations must implement these GMP changes by January 1, 2019.
The TFDA has been a member of the Pharmaceutical Inspection Cooperation Scheme (PIC/S) since 2013, ahead of both South Korea and Japan. This agreement guarantees that Taiwan’s Good Manufacturing Practice standards (GMP) are aligned with international standards.
Foreign Pharmaceutical Companies
Multinational pharmaceutical companies including Roche, Pfizer, GlaxoSmithKline, AstraZeneca, Lilly and Bayer have established offices in Taiwan. Most multinational pharmaceutical firms in Taiwan are engaged in drug distribution or contract manufacturing with local companies. A notable exception is Pfizer, which established one of the only foreign-owned drug manufacturing plants in Taiwan. Pfizer’s Hsinchu manufacturing plant plays a key role in manufacturing Pfizer’s products for sale within Taiwan, as well as for distribution to other Asia-Pacific markets.
Medical Tourism
While Taiwan’s medical tourism market remains smaller than that of Malaysia or Thailand, it has seen promising growth in recent years. According to the MoHW, Taiwan received around 300,000 medical tourists in 2015, more than a 75% increase since 2012. Taiwan has traditionally been a well-known medical tourism destination to patients from mainland China, who made up 80% of all medical tourist arrivals in 2016.
Demographic Trends
Along with South Korea and Japan, Taiwan has one of the most rapidly ageing populations in Asia. According to the Ministry of the Interior, over 13% of Taiwan’s population was over 65 in 2017, a figure that is expected to rise above 20% by 2026. The island’s growing life expectancy and low birth rate have been the two main drivers of its population ageing. Taiwan has the world’s third lowest total fertility rate at 1.12 children per female, only ahead of Macau and Singapore (CIA Factbook). As Taiwan’s population continues to age, the demand for Western drugs and health supplements for diseases such as diabetes, hypertension and dementia should continue to grow.
Taiwan’s non-communicable disease (NCD) burden has also increased as a result of the ageing population and changing lifestyles. Taiwan has one of East Asia’s highest obesity rates at around 20%. In 2016, more than 10% of Taiwan’s adult population had type 2 diabetes. In 2016, cancer, cardiovascular disease, stroke, were the three leading causes of death in Taiwan (MoHW). Among cancers, lung, liver and colon cancer were the most prevalent.
Due to the ageing population and high disposable income, foreign drug companies should find good opportunities in Taiwan’s drug markets.