Why is it necessary to adjust the reimbursement prices of pharmaceutical products?
It has long been a major concern of the general public NHI pharmaceuticals reimbursement prices are higher than the market price for pharmaceutical products. Based on the "National Health Insurance Criteria for Drug Prices", the Bureau conducts routine pharmaceutical price surveys and makes adjustments on a bi-annual basis. Newly adjusted prices shall take effect on December 1, 2011. The purpose of this measure is to reasonably reduce the difference in drug prices and meet the expectations of the general public. Drug prices under the NHI system should not be substantially higher than market prices.
What are the Benefits of Drug Price Adjustment?
Drug Price Adjustments help to maintain the stability of NHI medical expenses. To keep pace with the aging population and technology developments, the Bureau must continuously introduce new pharmaceutical products and expand their scope of application (for example, drugs for the treatment of cancer, major injuries or diseases, rare or aging-related diseases), in order to ensure that the general public has the appropriate drugs available for use. Drug price adjustments also help to offset part of new expenses, thereby avoiding further increases to the NHI's financial deficit and reducing the general public's financial burden.
The drug price adjustment; however, will not cause the industry to shrink. In fact, given the forthcoming launch of many new drugs, overall revenues for the industry are expected to continue growing. To facilitate the long-term development of the biotechnological industry, the Bureau has, during the latest adjustment, offered preferential prices to the drug manufacturers that meet PIC/S GMP international standards.
Protective Measures for Essential Pharmaceutical Products
Some pharmaceutical manufacturers questioned the Bureau's decision to cut the prices of 58 newly-launched drugs. The Bureau has since conducted an investigation and found that only 8 items were newly-launched drugs which had never been sold on the market. All of the other items had been sold for many years, and some of them had already exceeded the patent period. Therefore, many alternative drugs are already available. On October 28 and 29, 2011, the Bureau arranged a face-to-face communication session with drug manufacturers and their agents. The Bureau has since evaluated the rationality of their queries and suggestions, and is considering accepting the following recommendations:
(1) With respect to new drugs incorporated into NHI benefits after October 2010, which have never been sold on the market, the price adjustment, if any, shall not be enforced. The prices originally payable by the NHI system shall prevail.
(2) In view of the prevalence of brand name drugs, the Bureau will consider granting preferential prices to brand name drugs manufactured in the top-ten developed countries. In other words, they will be offered the minimum price for the dosage form, which is currently applicable to the drug manufacturers meeting the PIC/S GMP international standards.
(3) Apart from the above, drug manufacturers may also apply for an increase in prices if they believe that the price adjustment may cause them to withdraw from the NHI system due to high costs and doing so may adversely affect the rights of the public.
The Request from the Pharmaceutical Industry for Further Negotiations
According to the National Health Insurance Criteria for Drug Prices, the Bureau should conduct pharmaceutical price adjustments on a bi-annual basis. The last adjustment was made on October 1, 2009. For the latest adjustment, the Bureau has granted an additional two-month grace period before implementing the new prices.
In the endeavor to maintain the financial stability of the NHI system, in the latest adjustment, the Bureau has expanded the range of the "Non-adjusted Value" for all pharmaceutical items from the 6% of the last adjustment to 15%, taking into account the public's right to medications, the reasonable costs of pharmaceutical products, as well as the development of the pharmaceutical industry. The "Maximum Adjustment Range" on price differences, has been reduced from 60% to 40%. These are considered appropriate approaches to simultaneously protect industrial development as well as the financial integrity of the NHI system; however, there are still some differences between these ratios and those proposed by the pharmaceutical industry, i.e., 25% for the non-adjusted value and 20% for the maximum adjustment range.
Following the forums on October 28 and 29 for manufacturer appeals, this week, the Bureau shall continue arranging coordination meetings for these manufactures to clarify concerns. The Bureau will also continue communicating with the pharmaceutical industry to discuss the principles for handling appeals.