Executive Summary
Market Entry
Current Market Trends
Best Prospects
Market Size
Main Competitors
Current Demand
Registration Process
Reimbursement
Barriers
Procurement & Tenders
FAQs
U.S. Commercial Service Contact Information
Tab Options
Executive Summary
Market Entry
Current Market Trends
Best Prospects
Market Size
Main Competitors
Current Demand
Registration Process
Reimbursement
Barriers
Procurement & Tenders
FAQs
U.S. Commercial Service Contact Information
Executive Summary
As populations age across Asia, there is increased demand for medical care. A key point of access to the Asian healthcare market, Taiwan’s strategic location in the transportation hub of the Asia-Pacific region makes it an ideal location for entering emerging markets, especially China.
Since launching the National Health Insurance (NHI) program in 1995, Taiwan has provided universal health coverage (99.9% of the population) through a single payer system.
There are over 20,000 primary and 500 secondary care units in Taiwan, many of which are small, privately owned clinics. In 2018, approximately 93% of all health care facilities were contracted by the NHI system to provide healthcare services. Taiwan’s NHI initiated its “second-generation phase” in 2013, which focuses on applying internet, cloud, and other information technologies to the system to optimize use and efficiency. Many treatments or examinations using more advanced medical devices are considered too expensive and not reimbursable under the NHI system. In such cases, a self-pay category is utilized, especially for items such as coronary stents, artificial ceramic hip joints, artificial intraocular lenses, and metal-on-metal artificial hip joints.
Taiwan is a major market for U.S. medical device exports and is ranked among the top 25 in the world in terms of value. As of 2018, the medical device market in Taiwan has grown to approximately US $4.66 billion (*2). Business Monitor International expects that the Taiwan medical device market will continue to grow by 9.0% between 2017 and 2022. Due to its own limited market size, most Taiwan medical device manufacturers produce mid-to-low end medical equipment and contracted manufacturing for multinationals. Major opportunities for imports in Taiwan are at the high-end level, where the United States and Japan have dominated the market. Over 70% of this market is still supplied by imports, 34.9% of which are supplied by the United States.https://www.census.gov/foreign-trade/statistics/highlights/top/top1806yr.html
Market Entry
For any manufacturer wishing to enter Taiwan, it is essential to appoint a local distributor. Private hospitals in Taiwan tend to purchase equipment directly from distributors with whom they already have established relationships. Equipment tenders for public hospitals are handled through the “Public Construction Commission” (PCC) under the Taiwan Executive Yuan (the executive branch of the government). According to the Taiwan Ministry of Health and Welfare (MOHW), there are 55,926 registered distributors for medical devices and pharmaceuticals in Taiwan.
Current Market Trends
With a population growth rate of 0.25% as of March 2018, approximately 14.05%1 of Taiwan’s population was over the age of 65. According to the Taiwan Ministry of the Interior, the percentage of senior population is more than double the percentage in 1984.
The Ministry of Health and Welfare (MOHW) reports that Taiwan’s population will continue to rise until the year 2021, along with an increase in the population of seniors. As a result, the National Health Expenditure (NHE) should continue to increase. In 20172 , Taiwan’s National Health Expenditure amounted to US $37.5 billion, which is 6.4% of gross domestic product (GDP), which represents an increase of 3.7% over the previous year. About 60.8% of Taiwan’s healthcare expenditures are funded by the public sector, with the remaining 39.6% covered by the private sector. According to the MOHW, the NHE per capita was US $1,595 in 2017, an increase of 3.6% from the previous year.
[1] Data Source: Taiwan Ministry of the Interior
Best Prospects
Below are the most promising subsectors:
Chromatographs and electrophoresis instruments
Computerized tomography
Endoscopes
Hemodialysis apparatus
Magnetic resonance imaging apparatus
Prepared diagnostic and laboratory reagents
Shock wave lithotripsy apparatus
Ultrasonic scanning apparatus
X-rays apparatus for dental uses
Market Size
Healthcare spending (including investment)
1,029,182 million NT$
… as percent of GDP
6.14%
… of which spent on inpatient services (including long-term care)
22.18%
… of which spent on pharmaceuticals/consumables
25.45%
… of which spent on investments
… of which spent on outpatient services
49.51%
Number of hospitals
494
…Public
81
…Private
413
Number of hospital beds
162,163
… available beds per capita
56.8 beds / 10,000 population
…of which in general hospitals
133,335
…of which in specialized clinics and rehabilitation centers
28,828 (clinics)
Physicians
44,006
Dentists
13,502
Demographics
Population
23,570,000
Life expectancy men/women
80.4 years (total population)
77.3 years (male)
83.7 years (female)
Infant mortality
4.6 deaths/1,000 live births
Percent of population older than 65
13.9%
…projection, 2030
23,586,654 (medium variant)
Annual deaths
7.3 deaths/1,000 population
Main Competitors
The medical manufacturing sector in Taiwan mostly consists of small to medium sized enterprises. The sector is particularly strong in manufacturing products at the lower end of the technology scale. Taiwan is one of the world’s leading producers of wheelchairs, patient aids, rehabilitation products, bandages and other medical supplies, and basic medical and surgical instruments. The local sector has also gradually expanded into orthopedic and implantable products, contact lenses, and other medical instruments and devices such as blood pressure and glucose monitors.
The Taiwan pharmaceutical market is heavily reliant on imported drugs. Taiwan has approximately 1,900 manufacturers of Western medicines and about 200 Chinese medicine producers (*1). Most major international pharmaceutical companies are widely represented on the island.
(*1) Source: BMI Research
Current Demand
Foreign imports are in high demand and supply more than 70% of the advanced medical devices in the market. Imported advanced medical devices are generally from the United States, the EU and Japan, a trend that is set to continue.
Registration Process
In Taiwan, medical devices must be registered with the Ministry of Health and Welfare (MOHW). Licenses are granted only to individual products and not to product lines. According to the regulations set by MOHW, companies that export to Taiwan must submit the required documentation through their Taiwan importers or subsidiaries. Generally, the following documents are required by Taiwan authorities for shipments of medical devices, regardless of content or shipping method: Commercial Invoice, Certificate of Origin, Packing List, Pro forma Invoice, Bill of Lading, and a free sale certificate. Free sale certificates for medical devices may be obtained from the U.S. Food and Drug Administration’s Center for Devices and Radiological Health.
Medical devices require an application for reimbursement review, discussed below. Also, pharmaceutical products require approval by the Taiwan Food and Drug Administration (TFDA) before entering the market.
In Taiwan, medical devices are divided into three risk classification levels: Class I (low-risk), Class II (medium-risk), and Class III (high-risk). The latter two risk classifications of medical devices must meet the following labeling requirements:
Label must include product name, license number, and the name and address of the manufacturer printed in Chinese;
Label must include the manufacturing date and/or expiration date; the dates do not need to be in Chinese;
The Chinese product name cannot be in a smaller print than the foreign product name.
Reimbursement
The pricing and reimbursement for medical devices and drugs in Taiwan are set by Taiwan’s National Health Insurance Administration (NHIA). Once approval from the Taiwan FDA (TFDA) is granted, all new-to-Taiwan medical device or drug manufacturers need to submit an application to the NHIA.
Following evaluation by a committee of stakeholders, the NHIA then decides whether a new medical device or drug will be listed for NHIA reimbursement. If a new product is added to the reimbursement list by the NHIA, its reimbursement price will be determined by the administration, and the product can be used at any healthcare facility in Taiwan.
Barriers
According to the U.S. Trade Representative’s (USTR) “2018 National Trade Estimate Report”, U.S. industry stakeholders continue to underscore the need for greater transparency and predictability in Taiwan’s pricing and reimbursement policies for pharmaceuticals, including innovative pharmaceuticals, in Taiwan’s healthcare system. The 2013 introduction of the Drug Expenditure Target (DET) pilot program served as an improvement over the less predictable price volume survey system that had preceded it. However, U.S. industry continues to raise concerns over the DET pilot program’s inconsistent treatment of different forms of patented pharmaceutical products in price adjustments, the calculation of annual drug expenditure targets, what actions will be taken if targets are exceeded, and the impact of orphan drug and newly introduced vaccine expenditures on the National Health Insurance Administration (NHIA) global budget.
In December 2017, Taiwan’s Legislative Yuan passed an amendment to the Pharmaceutical Affairs Act establishing a patent linkage system that should address patent issues expeditiously in connection with applications to market pharmaceutical products. On July 1, 2019, the Taiwan Ministry of Health and Welfare announced the Implementation Rules of Patent Linkage of Drugs, an important step towards full implementation of the patent linkage system.
Despite Taiwan being a significant market for U.S. medical device exports, concerns persist over Taiwan’s systems for product license approvals and pricing review mechanisms. Manufacturing facility registration (known as Quality Systems Documentation, or QSD) is mandatory in Taiwan, regardless of whether or not a medical device is already on the market, and re-registration is required every three years. Although TFDA offers an expedited application process for regulatory review of medical devices, U.S. industry has continued to express concern over documentary requirements that limit the number of manufacturers eligible to benefit from the program. For example, TFDA accepts copies of the U.S. Food and Drug Administration (U.S. FDA) medical device Establishment Inspection Reports (EIR) of U.S. manufacturers that export to Taiwan in lieu of QSD for the simplified mode of review. However, TFDA requires an EIR issued within the last three years and an ISO 13485 certificate to qualify for simplified review. Because U.S. FDA conducts facility inspections using a risk-based approach, rather than on a set timetable, only a fraction of U.S. manufacturers can qualify for Taiwan’s simplified mode of review. Moreover, the simplified product registration mode is only available to applicants who submit a Certificate of Free Sale/Certificate to Foreign Government from the United States and the EU.
The balance billing mechanism, introduced in January 2013, allows partial patient self-pay for high-end devices or new technologies. NHIA has the authority to introduce price caps that apply ceilings on what patients pay on new balance billing items. Transparency and due process mechanisms are critical in this process, and U.S. stakeholders have expressed concern that the current balance billing system does not effectively distinguish among devices of differing effectiveness. In 2014, NHIA established a website used to help consumers compare the cost of devices at different hospitals as a way to address a consumer concern without resorting to setting a balance-billing cap. In 2016, the NHIA increased the frequency of balance billing application reviews from semiannually to quarterly. U.S. stakeholders continue to urge NHIA to lift balance-billing caps on products with the same functional classifications, and to adopt a more flexible approach in allowing hospitals to set charges.
FAQs
Taiwan Food and Drug Administration (TFDA). Telephone: +886-2-2787-8000.
TFDA medical devices registration inquiry hotline: +886-2-8170-6008
Taiwan Center for Drug Evaluation (CDE): +886-2-8170-6000
U.S. Commercial Service Contact Information
Name: Grace Tao grace.tao@trade.gov
