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Pricing and Reimbursement of G i M di i i T iGeneric Medicines
in Taiwan
Workshop on Pricing and Reimbursement of p gGeneric Medicines in
Asia, December 4, 2012
Weng-Foung Huang, Ph.D.Professor
Institute of Health and Welfare PolicyNational Yang-Ming
University, Taiwan
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Professional Background gWeng-Foung Huang, Ph.D.
BS in Pharmacy, National Taiwan University (1972); MS in
Pharmacy Administration (1975) and Ph D in Social andPharmacy
Administration (1975) and Ph.D. in Social and Administrative
Pharmacy, University of Minnesota , USA (1979)
Public service career (1980~1994) - Senior official in DOH:
(Senior Specialist, Deputy Director General, and Director General
of Pharmaceutical Affairs Bureau Director GeneralGeneral of
Pharmaceutical Affairs Bureau, Director General of National
Laboratories of Foods and Drugs)
Architect of Taiwan’s GMP and clinical trial regulations; Key g
; ycontributor to Taiwan’s NHI pharmaceutical reimbursement
system
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Professional Background gWeng-Foung Huang, Ph.D.
Academic career (1994 ~ present): Associate Professor, Director,
Professor ; Institute of Health and Welfare Policy, National Yang
Ming UniversityNational Yang-Ming University
President, Pharmaceutical Society of Taiwan (1995~1997,
2007~2011.1) ;Advisor to Taiwan’s DOH(1999~2000, ) (
,2005~2007);Chairman of OTC Committee, DOH (1999~2007) ;Chairman of
Pharmacy Service Quality Committee, DOH (2004~2007)DOH
(2004~2007)
Fields of Specialization: Health Policy Evaluation,
Pharmaceutical Pricing and Reimbursement in Health gInsurance,
Health Technology Assessment (HTA) , Development Strategies in
Health Care Industry
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Outlinesl i d i ’ G i Drug Regulation and Taiwan’s Generic
Pharmaceutical Industry Taiwan’s NHI and Pharmaceutical Benefit
Scheme Pricing and Reimbursement of Generic Medicines Pricing and
Reimbursement of Generic Medicines
in NHIK I i G i M di i Key Issues in Generic Medicine
Future of Taiwan’s Generic Pharmaceutical Industry
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Law and Regulation gof Pharmaceuticals in Taiwan
Physicians Act and Medical Care Act: Medical practices and
medical behaviors, Pharmacists violating Physicians Act in
providing prescription medicines without aAct in providing
prescription medicines without a physician’s prescription and
involves diagnosis, treatment or therapyor therapy
Pharmaceutical Affairs Act: governing pharmaceuticals, medical
devices, pharmaceutical companies and related , p paffairs
Pharmacists Act: governing the practices of pharmacists Drug
Hazard Relief Act: Drug relief payment for serious
drug adverse reactions as a result of legal drug uses
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L d R l tiLaw and Regulation of Pharmaceuticals in Taiwan
Rare Disease Control and Orphan Drug Act Controlled Drugs
Act/Illicit Drug Hazards and Controlled Drugs Act/Illicit Drug
Hazards and
Prevention Act。 National Health Insurance Act: Pharmaceutical
National Health Insurance Act: Pharmaceutical
Benefit Scheme, NHI Contract PharmacyS f C l f C i H i A Statue
for Control of Cosmetic Hygiene, Act Governing Food Sanitation,
Health Food Control Act, tetc.
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Evolution of Drug Regulation in TaiwanEvolution of Drug
Regulation in Taiwan New drug approvals usually follow the
marketing
authorization of reference countries (such as USA
UKauthorization of reference countries (such as USA, UK,France,
Japan, Germany, Switzerland, Sweden, Belgium, Australia, Canada,
etc.) in 1980s. , , )
Center for Drug Evaluation, a miniature of USFDA, was
established in 1998 and plays a pivotal role in enhancing the
efficiency and quality of drug evaluation. Taiwan could eventually
establish its own regulatory review system for domestic NDA
reviewsystem for domestic NDA review.
Requirement of bioequivalent study (BA/BE) for generics in
1989in 1989
Inauguration of Taiwan Food and Drug Administration (TFDA) in
2010.
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Current Status of Taiwan’s Pharmaceutical Industry
Generic and domestic market oriented, weak innovation
capabilities and international competiveness
Government development policy concentrated on R&D, lacking
effective integration of up-middle-down streamsNHI d i h d l f d i
NHI dominates the development of domestic pharmaceutical industry,
however, NHI pricing and reimbursement policy inconsistent with
national industryreimbursement policy inconsistent with national
industry policy
For multinational pharmaceutical companies, a matured p p
,market without much momentum
Double jeopardy of NHI Pricing and PIC/S GMP 2012/12/04
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Top 20 Pharmaceutical Companies in Tai an 2011in Taiwan,
2011
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Pharmaceutical Market Structure in TaiwanYear 2003 2004 2005
2006 2007
Local companies 24,866 26,923 27,855 27,009 25,561
Unit: NT$1M
MNC/Imported 69,680 76,229 76,469 81,028 84,141
Total 94,546 103,152 104,324 108,037 109,702
Market share of 26.3% 26.1% 26.7% 25.0% 23.3%local companies
2007 Market Structure Unit:NT$1M
Hospital segment the major market (78%),Drugstores the next
(14%) the rest are3021
100%
2007 Market Structure Unit:NT$1M
the next (14%), the rest are clinics (8%)
Foreign companies: local companies by values - 7:3。
Foreign companies: local70843
10249
3021
60%
80%
Foreign Foreign companies: local companies by quantity - 3:7
147164957
5916
20%
40% Local
10
147160%
Hospitals Clinics
Source:2008 Biomedical industry Almanac 2012/12/04
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Pharmaceutical Benefit SchemePharmaceutical Benefit
SchemePharmaceutical Benefit SchemePharmaceutical Benefit Scheme
Fee for services in outpatient services Fee for services in
outpatient services Claims based on brand price published by
the
NHI BNHI Bureau Positive listing and national unified
reimbursement price Daily drug paymentclinics and pharmacies,
Daily drug payment clinics and pharmacies,
TCMsF f i d DRG (Di ti R l t d Fee for services and DRGs
(Diagnostic Related Groups) for inpatient services
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Pharmaceutical Benefit Scheme for National Health Insurance
Chapter I General PrinciplesGeneral Principles
Chapter II Principles on Drug Reimbursement Listing inNHI
Chapter III Chapter III Principles on Drug Reimbursement Price A
l f NHI N d N it f li t dApproval of NHI: New drugs, New item of
listed ingredients and dosage forms (Generics)
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Drug Classification under NHIDrug Classification under NHI
A. New drugB New item of listed ingredients and dosageB. New
item of listed ingredients and dosage
forms in the PBS.1. Compounding prescription and special
potency
drugsdrugs2. Other prescription drugs (Generic drugs)
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Classification of Generic Drugs
2a. Drugs from original R&D pharmaceutical company
(including authorized generic drugs)company (including authorized
generic drugs)
2b. BA/BE generic drugs.2c. Generics other than BA/BE
generics
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NHI Pricing for BA/BE Generic Drugs:g g
1) Reimbursement for newly approved BA/BE drugs shall not exceed
the lowest reimbursed price of listed BA/BE drugs with identical
ingredients, volume, dosage forms and dosage in the PBS.
2) Generic drugs may re-apply for price approval after BE
implementationafter BE implementation.
3) Prices of BA/BE drugs shall not exceed prices of i i l
R&D d h i h id i loriginal R&D company drugs that with
identical
ingredient.2012/12/04 HWF/YMU 17
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NHI Pricing for Common Generic Drugs
1) Reimbursement for newly approved drugs shall not exceed the
lowest reimbursed price of listed commonexceed the lowest
reimbursed price of listed common generic drugs with identical
ingredients, volume, dosage forms and dosage in the PBSdosage forms
and dosage in the PBS.
2) Reimbursement for common generic drugs shall not d h i b d i
f BA/BE d lexceed the reimbursed price of BA/BE drugs, also
shall not exceed 80% of reimbursed prices of original R&D
dR&D company drugs.
3) Reimbursement for common generic drugs shall not exceed the 3
folds of 50 percentile reimbursed price of general generic
drugs.
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Trends of Pharmaceutical Expenditure in Taiwan (2000~2012/6)
25 4% 25 2% 25 4%
30.0%1,800
(2000~2012/6)
1,236 1,301 1,313
1,424
25.4%24.8% 24.4% 24.6%
24.9% 24.8% 25.0% 24.8% 25.2% 25.4% 25.0% 25.8%25.0%
20 0%
25.0%1,400
1,600
調
829 847 906 945
1,094 1,115 1,130 1,156
15.8%15.0%
20.0%
800
1,000
1,200
調價
調價調
價調
調價
調價
693
6.9% 6.9%5.3%
8.4%
5 0%
10.0%
400
600
800 調價
調價調
價
3.1% 2.2%4.4%
2.4% 1.4%2.3% 0.9%
-1.5%0.0%
5.0%
0
200
400
-5.0%-200 89年 90年 91年 92年 93年 94年 95年 96年 97年 98年 99年 100年
101年1-6
月
藥品費用 藥費占率 成長率
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2020 2011
2012/6
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Expenditure ($) Share (%) Growth Rate (%)2012/12/04
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International Comparison of Per Capita Outpatient Pharmaceutical
Expenses, 2007Outpatient Pharmaceutical Expenses, 2007
P 8719001000
PE Per C
725 719 689 666 650 636 628 604 569 568 547 539600
700
800
apita (US
547 539 526 525456 427 402 397
318 318 301400
500
600
S$)
301 273234
172136
191
100
200
300
S : 1 OECD H lth D t 2009
0
100
美國 加 法國 比 希臘 冰島 德國 瑞士 義 奧 瑞典 挪威 日本 西 芬蘭 澳洲 丹麥 盧 葡 韓國 匈 斯 紐 捷克 台灣
波蘭 墨
20
Sources: 1.OECD Health Data 20092.DOH(Taiwan)Pharmaceutical
expenses include Prescription, OTC, and TCM
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Market Share by Type of Pharmaceutical Sources
120%
31.5% 29.7% 29.9% 30.1% 29.2% 28.8% 29.5% 28.3%26.6% 25.9% 26.1%
24.7% 25.1%
100%
13 8% 13 8% 13 3%12.2% 11.8%
%
80%
60 6% 63 1% 63 1%
17.9%17.5% 16.5% 15.3%
14.1% 13.7% 13.5% 13.7% 13.8%13.8% 13.3%
40%
60%
50.6% 52.8% 53.6% 54.6% 56.7%57.5% 57.0% 58.0% 59.7% 60.3%
60.6%
63.1% 63.1%
20%
0%88 89 90 91 92 93 94 95 96 97 98 99 100
1研發廠 2代理商 3國產廠
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1研發廠 2代理商 3國產廠 年度R&D Companies Agents National Generics
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International Comparison: Cheaper Original Products in Taiwan
(Top 20 Original Products)
450%409%
350%
400%
250%224%
250%
300%
224%212% 203% 201%
160%144% 139% 130%
116%150%
200%
116%100%
50%
100%
0%美國 德國 瑞士 日本 加拿大 比利時 法國 瑞典 英國 澳洲 韓國 台灣
USA German Swiss Japan Canada Belgium France Sweden UK Australia
Korea Taiwan
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USA German Swiss Japan Canada Belgium France Sweden UK Australia
Korea Taiwan
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Issues in NHI Pharmaceutical Benefit Scheme
1.Payment Gaps (Black-hole Issue)2. Waste in Medicines3. Unfair
Drug Pricing4. Coverage of OTC Drugs5. Pharmaceutical Budget in
Global Budget6. Trade Negotiation Issues7. Containment Strategies:
Price/Volume Survey and
Price Cutting, Claw-Back Contract on New Drugs Reimbursement
Pricing New Drugs HealthReimbursement, Pricing New Drugs, Health
Technology Assessment (HTA), etc.
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Key Issues in Generic Medicines
GMP-cGMP-PIC/S GMP Quality of generic medicines Quality of
generic medicines Price barriers and generic medicines
Reimbursement on API basis There is no incentive mechanism in NHI
to There is no incentive mechanism in NHI to
encourage the use of generics by the public
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Government’s Policy on PharmaceuticalGovernment s Policy on
PharmaceuticalIndustry - Past vs. Future
120(expected)550 230 168
No. of Manufacturers
550 30
1982 1988 1996
68
2001 2007
2005
1st
Pha
Aseptic
cGM
P
19881st Pha
Com
ple
1996 20012013
2007P
IC/S
Advoc
PIC
/sase GM
P
c Validati
Initiated
ase GM
P eted
cacy
s Expecteion
Source: PIDC 2008
ed
Source: PIDC, 2008
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PIC/S GMP The Pharmaceutical Inspection Convention and
Pharmaceutical p
Inspection Co-operation Scheme (jointly referred to as PIC/S)
are two international instruments between countries and
h i l i i h i i hi h id hpharmaceutical inspection authorities,
which provide together anactive and constructive co-operation in
the field of GMP
Currently, PIC/S has 41 members, including EU countries, USA,
Canada, Australia, Singapore, Malaysia, Israel, and South Africa
etcAfrica, etc.
Effective January 1st, 2013, Taiwan will officially be was the
43rd member of the PIC/S it is a new milestone for Taiwan’s43
member of the PIC/S, it is a new milestone for Taiwan s
pharmaceutical industry
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Quality of GenericsQuality of Generics When two thirds of the
drug quantity, consumed by the
public, are manufactured by generic manufacturers, the quality
should not be a problem.
TFDA d fi d i d d t h i th TFDA defined generics as drug
products having the same API, dosage form, dose, and therapeutic
effect.
DOH/TFDA license is only the minimal criterion generic DOH/TFDA
license is only the minimal criterion, generic industry needs to
gain the quality recognition and support from the public.p
Core Issue: Quality Commitment to consumers (Physicians,
Patients, and the Public), not to regulatory agency only
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National Medicine Policy Conference, y ,2008/12/31
Resolution 4: To elevate quality incentives, same price issued
for theproducts with the same API and the same quality in order
toencourage the generic products and early entry to the
marketencourage the generic products and early entry to the market
For patent expired products, pricing policy is the same
price for products with the same API and qualityprice for
products with the same API and quality. Pricing measures will take
into consideration and
incentives of API Drug Master File (DMF) PIC/S GMPincentives of
API Drug Master File (DMF), PIC/S GMP (or EU, US FDA approvals) and
convenient package to use.
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Generic Substitution
Article 17, Pharmacist Act Pharmacists shall dispense according
to the prescriptions p g p p
without any mistakes; in the case that pharmaceuticals arenot
available or in short supply pharmacists shall informnot available
or in short supply, pharmacists shall informthe prescribing
physician for change, and shall not omit
b tit t th h ti l t illor substitute other pharmaceuticals at
will.
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Generic Substitution
Article 19, Enforcement Regulation of Pharmacist Act‘Other
pharmaceuticals’ in Article 17 refer toOther pharmaceuticals in
Article 17 refer to
drug products having different activepharmaceutical ingredients,
content, dose, or dosageformsforms.
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Generic SubstitutionArticle 40 Regulations for NHI Medical
CareArticle 40, Regulations for NHI Medical Care
For any medication, if the doctor has not indicated that
itcannot be substituted the pharmacist (assistant pharmacist)cannot
be substituted, the pharmacist (assistant pharmacist)can replace it
with one made by another factory or of another brand, however, the
substitute must be of the same a ot e b a d, oweve , t e subst tute
ust be o t e sa eingredients, same dosage form and same dosage at
an equalor lower price.p
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Price Barriers of Reimbursement on Brand Basis
Reimbursement on brand name basis: preference of physicians and
the public, profit and brand equity p y p , p q yconcerns of
pharmaceutical companies
Principles of Pharmaceutical Benefit Scheme in NHI Principles of
Pharmaceutical Benefit Scheme in NHI Price setting and claw-back
agreement on new drugs
R i b b d b i Reimbursement on brand name basis No balance
billing permitted Gradually phase into payment by API
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Price Barriers of Reimbursement on Brand Basis
Payment Gap (Drug Procurement Profit) is the prime factor of
purchase, the public confidence in drugs also i b dd d i b d
itimbedded in brand equity.
There is no solidarity concept in Taiwan’s society as a whole:
why using cheaper generics when premiumwhole: why using cheaper
generics when premium products are available!?
Drug profit is a key element in hospital and physicians’ Drug
profit is a key element in hospital and physicians choice of
drug
BNHI gradually phased into pricing by API for patent g y p p g y
pexpired products
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Price Barriers in PBS
Price barriers increasing amid pharmaceutical expenditure
structureR i f NHI i dj f d Recent saving from two NHI price
adjustments were transferred to premium priced new drugs, it
indirectly lowered the price barriers to access to new drugs, yet
it elevated the overall pricebarriers to access to new drugs, yet
it elevated the overall price barriers to pharmaceutical
resources.
For patent effective drugs, they are mostly of single source.
Brand product equals to API product.
For patent expired drugs, they are of multiple sources, and
there are many generic products in addition to the original
productare many generic products in addition to the original
product.
Pharmaceutical payment should be based on API (active
pharmaceutical ingredient) instead of brand name.
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The Future of Generics
Continuing expansion of market share by originals and biological
products, may reach 80% by 2020.
Generic market will become more competitive in terms of price
and quality.
More international competitors introduced to Taiwan while more
industry consolidation can be expected, and y pmore Taiwanese
generic companies will penetrate into international market.
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The Future of Generics A regulatory agency can only establish
its credential for
protecting public health in dealing with the quality, f t d ffi
f d h bli fid isafety, and efficacy of drugs when public confidence
in
regulatory agency is assured. For the industry compliance to
regulatory requirements is For the industry, compliance to
regulatory requirements is
only a minimum standard, the industry should endeavor to build
quality image to win the trust of the public and q y g pmedical
community by continuous dynamic quality approach.
For follow-on protein drugs, it’s only the beginning of another
era.
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Special Thanks to TFDA and BNHI, Department of Health
in making available of some slides in this presentation
Thank you for your kind attentionThank you for your kind
[email protected]
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