Taiwan Healthcare Policies and U.S.-Taiwan Relations
(Arlington, Virginia, February 24, 2021)
For U.S. companies in both the pharmaceutical and medical device sectors, Taiwan has long been one of the major export markets in the Asia Pacific. Virtually all the leading U.S. manufacturers in these industries are represented in Taiwan by well-established subsidiaries.
U.S. companies in both industries believe, however, that business opportunities in Taiwan would be considerably greater if not for government policies that give priority to cost containment. Since 1995, Taiwan has operated under a single-payer national healthcare system managed by the National Health Insurance Administration (NHIA) under the Ministry of Health and Welfare (MOHW). Increasingly, the NHIA has adopted various mechanisms designed to slow or limit entry into the Taiwan market of new and innovative products and technologies – the types of items that American companies are well known for – due to their relative expense.
At the same time, relations between the U.S. and Taiwan have been growing warmer recently due to the mutual realization of their shared interests and values. The two sides recently held a Taiwan-U.S. Economic Prosperity Partnership Dialogue and signed a Memorandum of Understanding on bilateral economic cooperation.
Prospects appear unusually encouraging for resolution of existing trade issues, whether through the established Trade & Investment Framework Agreement (TIFA) process or through negotiations toward a Bilateral Trade Agreement (BTA). The Taiwan government recently moved to relieve a longstanding irritant in the trade relationship when it changed certain import restrictions on American beef and pork products. Taking effect January 1, 2021, these changes were long requested by the United States, and should further improve the bilateral trade environment.
In the healthcare field, Taiwan has also shown its determination to enhance trade and investment conditions by implementing a Patent Linkage system for pharmaceuticals. Modeled after the U.S. Orange Book process, the enabling legislation was enacted in December 2017 and the new system came into force in August 2019. This puts an end to an issue that had been on the bilateral trade agenda for more than a decade.
In line with this atmosphere of cooperation and goodwill, the US-Taiwan Business Council looks forward to bilateral trade negotiations that will enable further progress in resolving outstanding healthcare-related issues. This report examines outstanding matters in the pharmaceuticals and medical device industries, reflecting the concerns of U.S. businesses with interests in Taiwan. It also looks at potential opportunities for additional bilateral cooperation in new, value-added healthcare fields such as digital and remote healthcare, which have grown tremendously in the wake of the COVID-19 pandemic.