Director Hsueh Yung (Mary) TaiDivision of Medical Review and Pharmaceutical Benefits

National Health Insurance Administration, TaiwanOct. 15, 2020

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Updates on Drug Reimbursement Model

of Taiwan’s NHI System

Outline

Pharmaceutical Reimbursement System and 

Expenditure in Taiwan

Principles and Procedures of drug listing

Optimization of Reimbursement Model

Conclusion

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Pharmaceutical Reimbursement System and 

Expenditure in Taiwan

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The insured

Co‐payment

Medical care providers

NHIA

supportive funding

Claim

Reimbursement

NHI ICcard

Premium

Medical service

The Framework of NHI

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CoverageCompulsory enrollment for all citizens and legal residents

Administration Single‐payer system run by the government

Financing Premiums

Benefits Uniform package, copayment required

Providers About 93% of healthcare providers contracted with NHI

Payment Plural payment programs under the global budget payment systems 

Privileges Premium subsidies and copayment waivers for the disadvantaged

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NHI Characteristics

Catastrophic disease Chronic disease (OPD) Others

Year Expenditure(million) 

Growth rate % Expenditure

(million) Growth rate % Expenditure

(million) Growth rate %

2012 1,403 6.0% 30.7% 2,197 ‐2.9% 48.0% 977 ‐2.6% 21.4%

2013 1,529 8.9% 30.8% 2,442 11.2% 49.1% 1,000 2.2% 20.1%

2014 1,590 4.1% 30.7% 2,571 5.3% 49.6% 1,023 2.3% 19.7%

2015 1,632 2.5% 31.2% 2,597 1.0% 49.6% 1,006 ‐1.2% 19.3%

2016 1,735 6.4% 31.6% 2,713 4.5% 49.4% 1,045 3.7% 19.0%

2017 1,877 8.2% 31.7% 2,977 9.7% 50.3% 1,065 2.0% 18.0%

2018 2,032 8.2% 32.2% 3,187 7.0% 50.5% 1,094 2.5% 17.3%

2019 2,142 5.4% 31.9% 3,442 8.0% 51.2% 1,132 3.6% 16.9%

1. OPD chronic disease medications contribute to half of total drug expenditure . Medications used for catastrophic diseases contribute to around 30% of total drug expenditure.

2. The expenditure on OPD chronic disease medications shows higher growth rate.  

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Factors Contribute to the Growth of Drug Expenditure

ATC category Percentage

L Antineoplastic and immunomodulating agents 22%J Antiinfectives for systemic use 16%C Cardiovascular system 15%A Alimentary tract and metabolism 14%N Nervous system 10%B Blood and blood forming organs 9%R Respiratory system 4%M Musculo‐skeletal system 3%G Genito urinary system and sex hormones 2%S Sensory organs 2%

H Systemic hormonal preparations, excl. sex hormones and insulins 1%

D Dermatologicals 1%V Various 1%P Antiparasitic products, insecticides and repellents 0%

Total 100% 7

Distribution of Expenditure by Category of Drugs

Principles and Procedures of Drug Listing

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Pay for Value

Health Technology Assessment

(HTA)

Health Technology Assessment

(HTA)

Subjects Subjects 

ComparatorsComparators

Relative effectiveness

Relative effectiveness

CBA/CEA/PE

CBA/CEA/PE

Budget impactBudget impact

Ethical/legal/social/political 

impact

Ethical/legal/social/political 

impact

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Classification of Drugs Listed

Drugs submitted for listing

• New active ingredient(s)• New dosage form• New route of 

administration• Combined preparation 

with new effect

Originators BA/BE 

generics Common 

generics

N

Y

Category 1 new drugs

Category 2 new drugs (2A, 2B)

New items

New drugs

Biosimilars

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N

composed of stakeholders to ensure decision making for drug listing and reimbursement

Healthcare Providers

Scholars and Experts

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The Insured

Employers

Health Regulatory Authority (MoHW)

Drug Regulatory  Authority (TFDA) 

93

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1

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The Suppliers 3

PBRS Joint Meeting

2Patients

Category Pricing  Mark‐ups

1 Breakthrough  Median price of A‐10 countries • domestic clinical trials (10%)

• domestic pharmaco‐economic study (up to 10%)

• better therapeutic effects (up to 15%)

• greater safety (up to 15%)• more convenient (up to 

15%)• pediatric preparations with 

clinical implications (up to 15%)

2A Me‐better

Capped at A‐10 median price• lowest price in A10• price in original country• international price ratio• treatment‐course dosage 

ratio• a combination drug is priced 

at 70% of the sum of each ingredient’s price, or at the price of the single active ingredient.

2B Me‐too

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A‐10 reference countries：Australia, Belgium, Canada, France, Germany, Japan, Sweden, Switzerland, US, UK.

Pricing of New Drug (1)

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Pricing of New Drug (2)

A new drug that demonstrates significant clinical value and is first introduced in Taiwan among the world

Based on actual transaction price

Cost calculation method

The listing prices of A‐10 countries of the new drug and its comparators

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Year of listing

No. of cases

No. of items

Minimum(month)

Average(month)

Maximum (month)

Median(month)

2013 19 26 4.2  7.8  12.9  7.7 

2014 23 45 4.0  8.4  14.9  7.9 

2015 22 40 6.3  11.5  22.0  10.0 

2016 17 26 7.3  11.3  21.1  10.4 

2017 29 50 7.3  12.0  31.3  8.9 

2018 26 51 7.3  11.7  28.2  10.2

2019 33 51 3.7 11.5 19.1 10.6

Total 169 289 3.7  10.6  31.3  10.0

New Drug Listing Time Course (from submission to listing)

• Drug suppliers disagree with the pricing results, resubmit, or submit additional documents

• Uncertainty in efficacy/ cost‐benefits

• Limited improvement in efficacy or similar in value compared to existing therapy, but more expensive

• High‐expenditure innovative drugs with huge budget impact

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Interfering Factors of Pricing Process

Principle of Pricing Generics and Biosimilars

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100Originators

BA/BE generics

Common generics

90

80

Capped at 80% of the lowest price of the listed originators.

Capped at 90% of the lowest price of the listed originators.

85Biosimilars Capped at 85% of the lowest price of the listed originators.

Pricing Process for Generics and Biosimilars

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Submission NHIA Preliminary Pricing Results

PBRS Joint Meeting Listing

Optimization of Reimbursement Model

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Current Challenges

Aging population

Escalating cost of new 

drugs(e.g. IO, cell/gene 

therapy)

Limited NHI resources vs. unlimited medical needs

Uncertainties in clinical efficacy of new drugs 

(e.g. due to fast tract approval)

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How to cope with Uncertainties(1)

Uncertainties in CostMEA

Good Submission Practice (GSP)/  co‐dependent 

test

Horizon Scanning The Submission Principles for 

High Expenditure Cancer New 

Drugs

Mandatory PE study for high 

expenditure new  cancer drugs (start 

from 2020)

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How to cope with uncertainties (2)

Clinical uncertainties

Biomarkers

Registry(RWE)

Refined HTA(HTR)

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I. Managed Entry AgreementII. Good Submission PracticeIII. Horizon ScanningIV. Improve Treatment Outcome through BiomarkersV. Utilization of Real World EvidenceVI. Refined HTA

Optimization of Reimbursement Model

I. MEAs Models in Taiwan

Category Mechanism of MEAs Models

1. Performance‐based 1. Ensure the improvement in overall survival

2. Ensure the progression‐free survival

3. Refund / payback based on response rate etc.

2. Financial‐based 1. Fixed‐rate refund / payback

2. Free doses

3. Payback for co‐prescribed drugs

3. Mutual share by negotiation

Mutual share of refund / payback among pharmaceutical products with the same ingredient or pharmacological category.

• Any one (or more than one) of the models be chosen on a case by case basis.

• Mutual share of drug expenditure between the supplier and the insurer via refund/ payback.

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Specify the dossier required for submissionCreate a check‐list for submission dossier and MEA proposal

Create a self‐assessment sheet for cost‐benefit analysis

II. Good Submission Practice (GSP)

Improve the completeness and quality of submission dossier

Accelerate pricing review process

HS

Clinical trial

Register for market approval

Submit for Listing

Enter market

R&D

Listing

Horizon Scanning HTA

III. Horizon Scanning (1)

20212020

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III. Horizon Scanning (2)

The end of Nov.

Deadline for HS registration

2022 2023

Reference for estimating the  budget for 2022

Datacollected

(Pilot program)

• New drug • New reimbursed indication

1st yr 2st yr

1st yr

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Platform for Registration for Horizon Scanning

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Platform for Registration for Horizon Scanning‐New Drug

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Platform for Registration for Horizon Scanning‐New Indication

IV. Improve Treatment Outcome through Biomarkers (1)

Identification of biomarkers

Improved patient outcomes

Patient sample

+ + =

Identify Patient

Right Treatment

Patient Benefit

Diagnostic test results inform treatment 

decision

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Ex: Examination of PD-L1 expression prior to the treatment with cancer immuno-therapies

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Submission of co‐dependent technology• Co‐dependent: two related technology (ex: 

gene examination to be done before the use of medication)

• If the reimbursement of a new drug may give rise to additional expenditure on a technology that is not yet covered by NHI, the technology shall be submitted for listing at the same time.

IV. Improve Treatment Outcome through Biomarkers (2)

Registry

RWE utilization

Renew reimbursement

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V. Utilization of Real World Evidence

Registry System for Cancer Immuno‐therapies (1)

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Type of Cancer No. of  Patient

Melanoma 206

Lung cancer 716

Lymphoma 18

Urothelial carcinoma 322

Head and Neck Cancer 457

Gastric Cancer 253

Hepatocellular carcinoma 453

Renal cell carcinoma 158

Merkel cell carcinoma 3

Total 2586

As of Sep. 29, 2020

Registry System for Cancer Immuno‐therapies (2)

– To evaluate the value of cancer immuno‐therapies and to regularly review their reimbursement restrictions, NHIA has established a registry system for these medicines to collect data including:– Type and stage of cancer– Results of genetic examinations (ex: EGFR/ALK wild type)– Results of biomarker examinations– Treatment outcomes– Severe side effects– Reasons for treatment withdrawal

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VI. Refined HTA

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• Assess new drugs and expansion of indication

• Evaluate risk sharing scheme

• Re‐assess the reimbursement efficiency of listed medical products

(TFDA) (NHIA)

Strike a balance between new drug accessibility and  affordabilityHorizon scanning

Conclusion

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Allocate global budget/new drug budget vianegotiation

Allocate global budget/new drug budget vianegotiation

How to allocate resources to deal with emerging pricey new drugs

How to allocate resources to deal with emerging pricey new drugs

Consider cost vs. benefit while making choices

Consider cost vs. benefit while making choices

Effective

Not effective

Global budget

New drug budget

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Conclusion

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4‐Win Situation

NHIA Patients

Medical Care Providers Industry

Pay for Value

THANK YOU FOR YOUR ATTENTION

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