US Tariffs May Delay New Drug Introductions; Experts Urge Reducing Old Drug Spending to Spur Growth
Experts warn that US tariff policies could delay the introduction of new drugs in Taiwan. They recommend reducing spending on off-patent old drugs and optimizing the healthcare budget to accelerate innovative medical treatments.
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- 📰 Published: April 12, 2026 at 17:59
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According to a report by the Taiwan Society of Regulatory Affairs for Medical Products, "new drugs"—medications whose active ingredient patents are still valid—account for only about 40% of the spending among the top 20 covered drugs in Taiwan's National Health Insurance (NHI). In contrast, nearly 70% of overall prescription spending in the UK is on new drugs, and in Japan, the proportion has grown to over 60%. Taiwan has room for improvement, and Japan's approach of driving new drug growth by reducing the share of old drugs can serve as a reference.
Kang Chao-chou, Chairman of the Taiwan Society of Regulatory Affairs for Medical Products, attended the "Healthy Taiwan Policy Challenges and Prospects: Enhancing New Drug Accessibility and National Competitiveness" forum today. He pointed out that US President Trump's imposition of tariffs and most-favored-nation drug pricing forced pharmaceutical companies to concentrate their resources on high-potential markets. Low-price markets are being marginalized, and Taiwan's market growth rate is below the global trend, affecting its investment attractiveness and potentially leading to delayed introductions of new drugs.
Kang stated that Taiwan lagging behind international standards in its proportion of new drug spending highlights the room for progress in new drug investment. In particular, Taiwan's NHI has structural issues with drug pricing. Resources are concentrated on old drugs whose patents have expired, resulting in a low proportion of patented new drugs and poor overall allocation efficiency. A sounder drug structure that encourages original manufacturers to introduce innovations and local manufacturers to take over the off-patent market is needed to accelerate new drug accessibility and strengthen supply resilience.
Kang suggested optimizing the budget structure by expanding the new drug budget, setting annual growth targets, and establishing a circular mechanism for savings injection. Savings from price reductions and the exit of old drugs should flow back into the introduction and expansion of new drugs. Reforming the pricing and payment system is equally imperative. Establishing a standardized, methodology-based pricing procedure could emulate the innovation drug price premiums and protections implemented in Japan and the US.
He further proposed introducing co-payments for new drugs to balance accessibility and financial burden, while strengthening review efficiency. He hopes the establishment of the Center for Health Policy and Medical Technology Assessment will enhance the independence of health technology assessment reviews, implement a professional division of labor in assessment and evaluation, and guide NHI reimbursement decisions with scientific evidence and medical value.
Kang added that accelerating the introduction of new drugs also requires setting Key Performance Indicators (KPIs), including the time gap for NHI reimbursement, coverage rate, new drug spending and its proportion of drug costs, patient health outcomes, and the proportion of life expectancy and unhealthy life expectancy. A "National New Drug Policy Index" should be published and monitored to ensure the timely introduction of new drugs.
Minister without Portfolio Chen Shih-chung agreed on the importance of introducing new drugs. He recalled his past tenure as Minister of Health and Welfare, gradually including new oral drugs for Hepatitis C into the NHI until they were universally available. "Today, we have seen very significant results in eliminating Hepatitis C." In other words, in overall drug policy, decision-making should prioritize safety and efficacy and must take a long-term view rather than just focusing on the immediate future.
Chen stated that facing the continuous supply and resilience of drugs, any policy should be supported, especially the introduction of new drugs, which requires substantial funding. Currently, government investment has exceeded NT$20 billion, with a special allocation of NT$10 billion for the cancer drug fund, hoping to actively create new drug accessibility and drug supply resilience.
Kang Chao-chou, Chairman of the Taiwan Society of Regulatory Affairs for Medical Products, attended the "Healthy Taiwan Policy Challenges and Prospects: Enhancing New Drug Accessibility and National Competitiveness" forum today. He pointed out that US President Trump's imposition of tariffs and most-favored-nation drug pricing forced pharmaceutical companies to concentrate their resources on high-potential markets. Low-price markets are being marginalized, and Taiwan's market growth rate is below the global trend, affecting its investment attractiveness and potentially leading to delayed introductions of new drugs.
Kang stated that Taiwan lagging behind international standards in its proportion of new drug spending highlights the room for progress in new drug investment. In particular, Taiwan's NHI has structural issues with drug pricing. Resources are concentrated on old drugs whose patents have expired, resulting in a low proportion of patented new drugs and poor overall allocation efficiency. A sounder drug structure that encourages original manufacturers to introduce innovations and local manufacturers to take over the off-patent market is needed to accelerate new drug accessibility and strengthen supply resilience.
Kang suggested optimizing the budget structure by expanding the new drug budget, setting annual growth targets, and establishing a circular mechanism for savings injection. Savings from price reductions and the exit of old drugs should flow back into the introduction and expansion of new drugs. Reforming the pricing and payment system is equally imperative. Establishing a standardized, methodology-based pricing procedure could emulate the innovation drug price premiums and protections implemented in Japan and the US.
He further proposed introducing co-payments for new drugs to balance accessibility and financial burden, while strengthening review efficiency. He hopes the establishment of the Center for Health Policy and Medical Technology Assessment will enhance the independence of health technology assessment reviews, implement a professional division of labor in assessment and evaluation, and guide NHI reimbursement decisions with scientific evidence and medical value.
Kang added that accelerating the introduction of new drugs also requires setting Key Performance Indicators (KPIs), including the time gap for NHI reimbursement, coverage rate, new drug spending and its proportion of drug costs, patient health outcomes, and the proportion of life expectancy and unhealthy life expectancy. A "National New Drug Policy Index" should be published and monitored to ensure the timely introduction of new drugs.
Minister without Portfolio Chen Shih-chung agreed on the importance of introducing new drugs. He recalled his past tenure as Minister of Health and Welfare, gradually including new oral drugs for Hepatitis C into the NHI until they were universally available. "Today, we have seen very significant results in eliminating Hepatitis C." In other words, in overall drug policy, decision-making should prioritize safety and efficacy and must take a long-term view rather than just focusing on the immediate future.
Chen stated that facing the continuous supply and resilience of drugs, any policy should be supported, especially the introduction of new drugs, which requires substantial funding. Currently, government investment has exceeded NT$20 billion, with a special allocation of NT$10 billion for the cancer drug fund, hoping to actively create new drug accessibility and drug supply resilience.