Boston, MA -- (ReleaseWire) -- 03/19/2014 -- On the back of the rising aged dependency ratio, demands for long-term care and welfare expenditure are expected to rise in Taiwan, adding further weight on the government's fiscal burden. In this respect, we particularly highlight the rising importance of elderly care, which will benefit nursing home providers, medical device companies and pharmaceutical firms looking to enter developed countries in the region. Meanwhile, generic drug firms will benefit from the increased use of generic medicines in the region, although the common theme of price containment will bring downside risks to the pharmaceutical industry.
Headline Expenditure Projections
- Pharmaceuticals: TWD161.33bn (US$5.51bn) in 2013 to TWD168.88bn (US$5.93bn) in 2014; +4.7% in local currency terms and +7.6% in US dollar terms. Forecast increased from previous quarter due to a change in the drug price adjustment policy.
- Healthcare: TWD1016.09bn (US$34.68bn) in 2013 to TWD1,064.64bn (US$37.36bn) in 2014; +4.8% in local currency terms and +7.7% in US dollar terms. Forecast slightly lower than the previous quarter's projections.
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Risk/Reward Rating: Taiwan moved up two spots to overall third position in our latest Pharmaceutical Risk/Reward Rating (RRR) assessment of the 18 key markets in the Asia Pacific region, scoring 65.7 out of 100 behind Japan and Australia respectively. This stems from improvement in industry and country rewards scores. While it is a small pharmaceutical market, Taiwan boasts above-average Rewards and Risks, propped up by factors such as the high per capita consumption of medicines and an excellent chance to capitalise on the mainland-China market. Taiwan has a very strong active pharmaceutical ingredient (API) industry and although it is small, which makes the domestic market competitive and particularly constrained, it provides specialty chemicals and high-quality APIs for global needs. The now-annual price adjustments will certainly fuel the need for local companies to outgrow the small domestic market.
Key Trends & Developments:
In January 2014, China's Health and Welfare Minister Chiu Wen-ta urged the World Health Organization (WHO) to include Taiwan's National Health Insurance (NHI) programme in its list of the top 10 healthcare systems. Taiwan's ever-improving NHI was recently praised by renowned international media outlets. The NHI programme is making steps towards a coverage ratio of 100% of the population, without a significant increase in medical expenditure. Other key features of the programme include medical record access and prescription provision with the help of a national health card - which help reduce paperwork, subsidise care for the old and disadvantaged, and give the country an 80% satisfaction rate.
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