Identifier
Created
Classification
Origin
06AITTAIPEI428
2006-02-12 01:27:00
UNCLASSIFIED
American Institute Taiwan, Taipei
Cable title:
TAIWAN INVITES COMMENTS FROM DRUG COMPANIES
how-toVZCZCXYZ0000 RR RUEHWEB DE RUEHIN #0428/01 0430127 ZNR UUUUU ZZH R 120127Z FEB 06 FM AIT TAIPEI TO RUEHC/SECSTATE WASHDC 8484 INFO RUEHBJ/AMEMBASSY BEIJING 4655 RUEHUL/AMEMBASSY SEOUL 7598 RUEHKO/AMEMBASSY TOKYO 7418 RUEHGZ/AMCONSUL GUANGZHOU 8964 RUEHHK/AMCONSUL HONG KONG 5857 RUEHOK/AMCONSUL OSAKA KOBE 0357 RUESLE/AMCONSUL SHANGHAI 8364 RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS AIT TAIPEI 000428
SIPDIS
SIPDIS
DEPT PASS USTR
DEPT FOR EAP/TC AND EB/MTA
USDOC FOR 4430/ITA/MAC/MBMORGAN
USTR FRO TIM WINELAND AND G BLUE
E.O. 12958: N/A
TAGS: ETRD ECON KPRP KTDB TW
SUBJECT: TAIWAN INVITES COMMENTS FROM DRUG COMPANIES
REF: 05 TAIPEI 4685
UNCLAS AIT TAIPEI 000428
SIPDIS
SIPDIS
DEPT PASS USTR
DEPT FOR EAP/TC AND EB/MTA
USDOC FOR 4430/ITA/MAC/MBMORGAN
USTR FRO TIM WINELAND AND G BLUE
E.O. 12958: N/A
TAGS: ETRD ECON KPRP KTDB TW
SUBJECT: TAIWAN INVITES COMMENTS FROM DRUG COMPANIES
REF: 05 TAIPEI 4685
1. SUMMARY. Joseph Damond VP International Affairs of the
Pharmaceutical Research and Manufacturers of America (PHRMA)
met with Bureau of National Health Insurance (BNHI) and Dept
of Health (DOH) officials Jan 19-20 to discuss PHRMA market
access concerns in Taiwan. They discussed separation of
prescribing and dispensing of drugs, public expenditures on
health care and the high number of prescriptions per doctor
visit, the high percentage use of generic drugs, and
transparency in drug pricing. PHRMA also voiced concerns that
new regulations were being adopted without adequate
consultation with the drug industry. DOH and BNHI officials
agreed to allow private sector comments earlier in the
regulatory process and to hold regular consultations with
industry and AIT. Damond later met with AIT Director and
conveyed similar points. END SUMMARY
MARKET ACCESS, AND DRUG PRESCRIBING
--------------
2. In a meeting with BNHI Vice President Huang San-Kuei,
PHRMA representatives Joe Damond and Heather Clark raised the
limited market access U.S. drug companies have in Taiwan, the
lack of separation between drug prescribing and dispensing in
Taiwan hospitals (i.e. hospital pharmacists dispense drugs
prescribed by hospital doctors encouraging over-prescribing
to augment hospital revenue),the high number of
prescriptions per doctor visit (seldom under six),the high
rate of generic drug reimbursement which encourages the use
of generics, and low health expenditure in Taiwan. BNHI noted
that even in the U.S. there is a "black hole" effect due to
the discount that state governments demand from the drug
companies. (Note: black hole refers to the excess
reimbursement over the real cost of the drug-the extra money
is kept by the hospitals).
3. PHRMA stated that Taiwan reimburses generics at 80 percent
of cost versus only 20-30 percent in the U.S. Generic drugs
are 50 percent of the U.S. market by volume but only 12
percent of market by value. This gives U.S. drug companies
more incentive to develop new drugs. BNHI stated that because
drug prices are set according to Pharmaceutical Affairs Law
article 49 implementation rule 67.1 there is little
flexibility.
4. PHRMA also opposed a plan to classify new drug
reimbursement into three categories and hoped the authorities
would adopt a more transparent pricing system in-line with
international practice.
AGREED: MORE DIALOGUE
--------------
5. PHRMA met the following day with DOH Vice Minister Chen
Shi-Chong to request a delay in the implementation of
regulations and procedures to allow the drug industry more
time to comment. PHRMA VP Damond reiterated the same points
he brought up with BNHI VP Huang earlier concerning
separation of prescribing and dispensing and the high
reimbursement rate for generic drugs. Chen said that drug
prices take up 26 percent of healthcare costs and the
government had put a 5 percent cap on national health
insurance expenditure growth. He re-affirmed DOH's intent to
hold regular meetings with industry and AIT as proposed by
AIT in November 2005.
6. Chen then said he would welcome industry comment under the
following conditions:
a. when new drugs are introduced to Taiwan
b. when looking for ways to minimize NHI budget and prices
for drugs already on the market
c. when looking for suggestions that would encourage proper
drug prescribing by physicians.
PHRMA PRESENTS AIT DIRECTOR SAME
--------------
7. Following their meeting with DOH vice minister Chen, PHRMA
reps met with AIT Director and requested his support on the
above mentioned issues.
8. COMMENT. The positive feedback from DOH and BNHI and the
fact that heads of both agencies will remain after the latest
cabinet shuffle improves the chances for continued dialogue
with PHRMA and the drug industry. However, the entrenched
interests both in the pharmaceutical industry and medical
field make it unlikely that either BNHI or DOH will move soon
to separate drug prescribing from dispensing or to correct
the overuse of generic medicines. END COMMENT
DAVISON
DAVISON
SIPDIS
SIPDIS
DEPT PASS USTR
DEPT FOR EAP/TC AND EB/MTA
USDOC FOR 4430/ITA/MAC/MBMORGAN
USTR FRO TIM WINELAND AND G BLUE
E.O. 12958: N/A
TAGS: ETRD ECON KPRP KTDB TW
SUBJECT: TAIWAN INVITES COMMENTS FROM DRUG COMPANIES
REF: 05 TAIPEI 4685
1. SUMMARY. Joseph Damond VP International Affairs of the
Pharmaceutical Research and Manufacturers of America (PHRMA)
met with Bureau of National Health Insurance (BNHI) and Dept
of Health (DOH) officials Jan 19-20 to discuss PHRMA market
access concerns in Taiwan. They discussed separation of
prescribing and dispensing of drugs, public expenditures on
health care and the high number of prescriptions per doctor
visit, the high percentage use of generic drugs, and
transparency in drug pricing. PHRMA also voiced concerns that
new regulations were being adopted without adequate
consultation with the drug industry. DOH and BNHI officials
agreed to allow private sector comments earlier in the
regulatory process and to hold regular consultations with
industry and AIT. Damond later met with AIT Director and
conveyed similar points. END SUMMARY
MARKET ACCESS, AND DRUG PRESCRIBING
--------------
2. In a meeting with BNHI Vice President Huang San-Kuei,
PHRMA representatives Joe Damond and Heather Clark raised the
limited market access U.S. drug companies have in Taiwan, the
lack of separation between drug prescribing and dispensing in
Taiwan hospitals (i.e. hospital pharmacists dispense drugs
prescribed by hospital doctors encouraging over-prescribing
to augment hospital revenue),the high number of
prescriptions per doctor visit (seldom under six),the high
rate of generic drug reimbursement which encourages the use
of generics, and low health expenditure in Taiwan. BNHI noted
that even in the U.S. there is a "black hole" effect due to
the discount that state governments demand from the drug
companies. (Note: black hole refers to the excess
reimbursement over the real cost of the drug-the extra money
is kept by the hospitals).
3. PHRMA stated that Taiwan reimburses generics at 80 percent
of cost versus only 20-30 percent in the U.S. Generic drugs
are 50 percent of the U.S. market by volume but only 12
percent of market by value. This gives U.S. drug companies
more incentive to develop new drugs. BNHI stated that because
drug prices are set according to Pharmaceutical Affairs Law
article 49 implementation rule 67.1 there is little
flexibility.
4. PHRMA also opposed a plan to classify new drug
reimbursement into three categories and hoped the authorities
would adopt a more transparent pricing system in-line with
international practice.
AGREED: MORE DIALOGUE
--------------
5. PHRMA met the following day with DOH Vice Minister Chen
Shi-Chong to request a delay in the implementation of
regulations and procedures to allow the drug industry more
time to comment. PHRMA VP Damond reiterated the same points
he brought up with BNHI VP Huang earlier concerning
separation of prescribing and dispensing and the high
reimbursement rate for generic drugs. Chen said that drug
prices take up 26 percent of healthcare costs and the
government had put a 5 percent cap on national health
insurance expenditure growth. He re-affirmed DOH's intent to
hold regular meetings with industry and AIT as proposed by
AIT in November 2005.
6. Chen then said he would welcome industry comment under the
following conditions:
a. when new drugs are introduced to Taiwan
b. when looking for ways to minimize NHI budget and prices
for drugs already on the market
c. when looking for suggestions that would encourage proper
drug prescribing by physicians.
PHRMA PRESENTS AIT DIRECTOR SAME
--------------
7. Following their meeting with DOH vice minister Chen, PHRMA
reps met with AIT Director and requested his support on the
above mentioned issues.
8. COMMENT. The positive feedback from DOH and BNHI and the
fact that heads of both agencies will remain after the latest
cabinet shuffle improves the chances for continued dialogue
with PHRMA and the drug industry. However, the entrenched
interests both in the pharmaceutical industry and medical
field make it unlikely that either BNHI or DOH will move soon
to separate drug prescribing from dispensing or to correct
the overuse of generic medicines. END COMMENT
DAVISON
DAVISON