Boston, MA -- (ReleaseWire) -- 02/07/2013 -- BMI View: We continue to view Taiwan as a challenging market for multinationals, mostly on account of the difficult pricing and reimbursement environment, which is due to undergo further changes. Specifically, as part of the Second Generation National Health Insurance (NHI) programme, which becomes effective in 2013, a new reimbursement system is expected to be rolled out in Taiwan. The American Chamber of Commerce in Taipei (AmCham), in its latest White Paper published in 2012, wrote that it hoped that the new system - known as the Drug Reimbursement Item and Payment Scheme (DRIPS) - will not become so complicated as to cause delays in patient access to innovative new drugs.
Headline Expenditure Projections
- Pharmaceuticals: TWD135.10bn (US$4.59bn) in 2011 to TWD140.44bn (US$4.71bn) in 2012; +4.2% in local currency terms and +2.6% in US dollar terms. US dollar forecast back in the positive territory, unlike in Q412, on account of exchange rate fluctuations.
- Healthcare: TWD953.29bn (US$32.42bn) in 2011 to TWD1,018bn (US$34.15bn) in 2012; +6.5% in local currency terms and +5.3% in US dollar terms. Local currency forecast slightly up since Q412, on account of macroeconomic factors.
- Medical devices: TWD52.63bn (US$1.79bn) in 2011 to TWD55.09bn (US$1.85bn) in 2012; +4.7% in local currency terms and +4.3% in US dollar terms. Local currency forecast slightly up since Q412, on account of macroeconomic factors.
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Risk/Reward Rating: Taiwan's score in the current version of our proprietary Pharmaceuticals & Healthcare Risk/Reward Ratings (RRRs) remains unchanged in relation to the previous year. With a composite figure of 60.2, Taiwan is again ranked sixth out of the 18 countries surveyed in the Asia Pacific region, above Hong Kong and below Singapore. Taiwan's risk component remains judged more favourably for multinationals than its rewards, which are subdued by factors such as relatively low pharmaceutical prices and opaque reimbursement.
Key Trends & Developments
- In July 2012, Taiwan-based ScinoPharm announced that it will manufacture topiramate, one of the APIs for Vivus' Qsymia (phentermine + topiramate). Qsymia is a treatment for obesity that was approved by the US Food and Drug Administration (FDA) on July 17 2012. Signifying the importance of the product to the US firm, Vivus' share price went up by 9.6% on the day the approval was announced. The move is in line with our view that offshoring manufacturing to low-cost bases will accelerate.
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