Sat, Mar 23, 2019 - Page 2 News List

NHIA to reconsider drug pricing formula

QUESTION OF PROFIT:The prices of 7,470 drugs are to be reduced from April 1, which is when two companies said they would be pulling their drugs from Taiwan

By Lee I-chia  /  Staff reporter

The National Health Insurance Administration’s logo and name are pictured in Taipei on Wednesday.

Photo: Lin Hui-chin, Taipei Times

The National Health Insurance Administration (NHIA) on Thursday said that it would consider amending regulations to modify the calculation formula of the drug expenditure target system, after pharmaceutical companies announced that they would be withdrawing certain drugs from the Taiwanese market.

Some local media reported on Wednesday that Merck Sharp & Dohme Corp’s Taiwanese branch had informed healthcare facilities that from April 1 it would stop providing its Tienam 500mg injection, which is made up of two components: imipenem, a type of beta-lactam antibiotic, and cilastatin sodium, a specific enzyme inhibitor.

The company then released a statement saying that although it has its own considerations regarding economic benefits and source of supply, it would continue to provide a stable supply of the product to contracted hospitals.

Patients at non-contracted hospitals should seek drugs with the same ingredients from other brands according to their doctor’s prescription, the statement said.

The news came shortly after reports on Monday last week that Zuellig Pharma Ltd (裕利) informed healthcare facilities in Taiwan that from April 1 it would no longer supply Prozac 20mg, an antidepressant, because the NHIA drug expenditure target system cuts prices every year, resulting in no profits for providing certain drugs to Taiwan.

The drug expenditure target system was introduced in 2013 and adjusts pharmaceutical prices on an annual basis to secure the National Health Insurance (NHI) program’s financial stability by reducing the gap between sale and procurement prices.

The prices of 7,470 drugs are to be lowered this year, starting from April 1.

“Drug prices are modified according to specific formulas, and the NHIA performs administrative duties according to the law, but we should have implemented [the target system] more meticulously,” NHIA Director-General Lee Po-chang (李伯璋) said.

There have been complaints about “the price of a pill being cheaper than candy,” but it is necessary to modify drug prices under the NHI global budget payment system, because there is a fixed budget that cannot all be spent on drugs, he said, adding that the price of drugs are modified according to drug market surveys.

Sometimes there are “black holes of drug pricing,” Lee said.

For example, some drug companies allow large hospitals to purchase drugs at low prices due to their high demand, so if the NHIA set the drug prices higher, the hospitals would profit, he said.

The administration would consider modifying the calculation formula for drug prices, Lee said, adding that drug companies are welcome to come forward and discuss the issue.

It would also monitor whether patients are given duplicate medication, to prevent unnecessary spending, he added.

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