US President Donald Trump has proposed raising tariffs on imported medicines to 150 percent, and potentially to 250 percent, as a way to boost US domestic production. How would such a policy affect Taiwan’s pharmaceutical market?
About 75 percent of medicines in Taiwan are imported. Much less is exported to the US. Many of Taiwan’s biopharmaceutical companies have established operations in the US. If the US government raises tariffs on drug imports, it would benefit these Taiwan-backed US companies to become even more competitive.
In Taiwan, medical institutions apply to the National Health Insurance Administration (NHIA) to register drug prices according to reimbursement benefits and payment standards. These institutions negotiate prices with pharmaceutical companies, often driving them down and squeezing profits. For instance, under the National Health Insurance system, Plavix — a drug used to prevent atherosclerosis — costs NT$36, compared with the equivalent of NT$239 in the US.
If higher tariffs disrupt the global pharmaceutical supply chain by raising costs and reducing output, and if purchase prices in Taiwan remain capped, companies might prioritize selling to higher-margin markets. Under free-market conditions, this could lead to shortages of brand-name drugs in Taiwan.
While brand-name and generic drugs are essentially the same in terms of ingredients, dosage and form, the former carry higher prices due to research and development costs. Generics, produced after patents expire, must still meet the Good Manufacturing Practice standards set by the Pharmaceutical Inspection Co-operation Scheme, ensuring safety and quality equivalent to the originals.
To mitigate the risk of brand-name drug shortages, Taiwan’s pharmaceutical industry must strengthen its capacity to produce generics, reducing reliance on imported brands. Locally manufactured generics could serve as a vital substitute in the event of supply disruptions.
Yeh Yu-cheng is a civil servant at the Public Health Bureau
Translated by Lai Wen-chieh
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