Director Hsueh-Yung (Mary) Tai

Division of Medical Review and Pharmaceutical Benefits

National Health Insurance Administration, Taiwan

Oct. 14, 2021

1

Strategies for Enhancing

Access to New Drugs and

Reimbursement Efficiencyunder Taiwan’s NHI System

Outline

Pharmaceutical Reimbursement System and

Expenditure in Taiwan

Principles and Procedures of drug listing

Increase Patients’ Access to New Drug

Enhance Reimbursement Efficiency

Conclusion

2

Pharmaceutical

Reimbursement System and

Expenditure in Taiwan

3

The insured

Co-payment

Medical care providers

NHIA

supportive

funding

Claim

Reimbursement

NHI IC

card

Premium

Medical

service

The Framework of NHI

4

CoverageCompulsory enrollment for all citizens and legal residents

Administration Single-payer system run by the government

Financing Premiums

Benefits Uniform package, copayment required

ProvidersAbout 93% of healthcare providers contracted with NHI

PaymentPlural payment programs under the global budget payment systems

PrivilegesPremium subsidies and copayment waivers for the

disadvantaged

5

NHI Characteristics

6

Overview of Medical Expenditure

Catastrophic disease Chronic disease (OPD) Others

YearExpenditure

(million USD)

Growth

rate%

Expenditure

(million USD)

Growth

rate%

Expenditure

(million USD)

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.

Factors Contribute to the Growth of

Drug Expenditure

7

Principles and Procedures

of Drug Listing

8

9

ValueCost

$

Pay for Value

Budget impact

SubjectsComparators CBA/CEA/PE

Ethical/legal/

social/political

impact

Relative

effectiveness

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

10

N

Composed of stakeholders to ensure decision making for drug

listing and reimbursement

Healthcare Providers

Scholars and Experts

13

The Insured

Employers

Health Regulatory Authority

(MoHW)

Drug Regulatory Authority

(TFDA)

9

3

3

1

1

11

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

12

A-10 reference countries：Australia, Belgium, Canada, France, Germany, Japan, Sweden,

Switzerland, US, UK.

Pricing of New Drug

Criteria Mark-ups

Performing domestic clinical trials 10%

Conducting domestic pharmaco-economic (PE) study Up to 10%

13

Criteria Mark-ups

Superior therapeutic effects, better safety,

favorable dosage forms of children’s medications

compared to the chosen comparators

Up to 15% for

each criterion

Better convenience (ex: longer dosing interval, better

route of administration, etc.)Up to 15%

To encourage innovation

To encourage local development of new drugs

Incentives in Pricing of New Drugs (1)

14

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

Incentives in Pricing of New Drugs (2)

15

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

2020 27 45 3.3 13.6 27.5 10.0

Total 196 334 3.3 11.1 31.3 10.0

New Drug Listing Time Course (from submission to listing)

Principle of Pricing Generics and

Biosimilars

16

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.

Increase Patients’ Access to

New Drug

17

18

New Drug Registration

Submission for listing

Expected indication

Expected date of

launch in Taiwan

Type of Budget

Expected date of submission

Expected reimbursed

indications

Expected date of listing

Suggested listing price

Comparator

Financial Forecast

MEA proposal or local PE

New Drug

Expansion of

reimbursed

indications

Breakthrough

drug

2A

2B

Claimed value of

the new drug Target population for disease

Target population for new

drug

New drug expenditure

Replaced drug expenditure

Budget impact

Launched in Sep. 2020

Submission type

The Registration Platform for Horizon Scanning

20212020

19

Horizon Scanning (2)

The end of Nov.

Deadline for HS

registration

2022 2023

Reference for estimating

the budget for 2022Data

collected

• New drug

• New reimbursed indication

1st yr 2st yr

1st yr

MEA

Uncertainty in

clinical evidence

Uncertainty in

cost-effectiveness

Uncertainty in budget impact

20

Managed Entry Agreement (1)

NHIA

Mutual

agreement

Pharmaceutical

firm

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.

21

Specify the dossier required for submission

Create a check-list for submission dossier and

MEA proposal

Create a self-assessment sheet for cost-

benefit analysis

Good Submission Practice (GSP)

Improve the completeness and quality of

submission dossier

Accelerate pricing review process

22

Improve Treatment Outcome

through Biomarkers

Identification of

biomarkersImproved patient

outcomesPatient sample

+ + =

Identify

Patient

Right

Treatment

Patient

Benefit

Diagnostic test results

inform treatment

decision

23

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

immuno-therapies

Enhance Reimbursement

Efficiency

24

25

Proposal

(Initiation)

Identifying candidates

Prioritization of candidates

Reassessment Decision

Health Technology Reassessment (HTR)

Criteria for identifying candidates for

assessment (Elshaug et al., 2009)

• Clinical evidence

• Variation in cares (e.g., variation in volume, geographic

variations, clinical heterogeneity of

procedure, etc.)

• Technology development

• Public interest or controversy

Items under assessment in 2021

• Efficacy:Bevacizumab (Avastin), Cetuximab

(Erbitux), Cilostazol, Drugs for

orphan diseases

• Safety:minocycline, amiodarone,

dronedarone, etc.

26

17.9 18.5

19.5 20.6

21.6 22.5

23.7

2.8 2.9 3.0 3.3 3.7 4.0 4.3

0.64 0.69 0.8 0.88 0.97 1.06 1.29

61

6465

68

72

7677

50

55

60

65

70

75

80

85

0

5

10

15

20

25

2014 2015 2016 2017 2018 2019 2020

PA

TIE

NT

S (T

EN

TH

OU

SAN

DS)

BIL

LIO

N (

USD

)

Global budget Expenditure on cancer treatment Cancer drug expenditure No. of cancer patient

Item Average growth rate

Global budget 4.80%

Expenditure on cancer treatment 7.24%

Cancer drug expenditure 10.68%

No. of cancer patients 4.52%

Expenditure on Cancer Treatment

27

Surrogate endpoint Clinical

indicator

Clinical benefit Cost-

effectiveness

Clinical trial: few participants Post-market:

large p’t population

Accelerated Market Approval but Lack

of Clear Clinical Evidence

Highly uncertain!

RWE needed!!

Registry System for Cancer

Immuno-therapies (1)

28

Type and stage of cancer

Results of genetic examinations

Results of biomarker examinations

Treatment outcomes

Severe side effect

Reasons for withdrawals

The NHIA has

established a registry

system for IO to

collect data including:

• Evaluate the value of

IO

• Review reimbursed

indications

Registry System for Cancer

Immuno-therapies (2)

29

Type of Cancer No. of Patient

Melanoma 322

Lung cancer 1309

Lymphoma 30

Urothelial carcinoma 630

Head and Neck Cancer 864

Gastric Cancer 253

Hepatocellular carcinoma 453

Renal cell carcinoma 246

Merkel cell carcinoma 9

Total 4116

As of Sep. 25, 2021

Approved for

continue the

treatment (504)

Deterioration

(487, 24%)

Expired

(465, 23%)

Complete/partial

response (CR/PR)

(452, 22%)Accelerated

deterioration

(211, 10%)

Discontinue due to other

reasons (173, 8%)

Discontinue due to SD

(140, 7%)

Intolerant to toxicity

(53, 3%)

Reported

closed cases

(1,529)

No. of patient approved for using IO treatment and reported as closed cases (inclusive of GC &

HCC): 2033

as of Mar. 31, 202130

Patient’s Response to the last IO treatment

Stable disease(SD)

(52, 3%)

31

Revise Reimbursed Indications of IO

based on RWE

If effective…

➔ Expand the scope of reimbursement

(1) PR/CR: Extend the course of treatment to 2 years

(2) SD: Extend from 3+1 months to 3+3 months

(3) Increase budget to 1 billion NTD

If NOT effective...

➔ Rebate

(1) Suspend applications from GC & HCC new cases

(2)Price revision based on A-10 lowest price

(3)Continue evaluating treatment outcomes and negotiate performance-based MEA.

32

One drug for all

patientsTarget therapy

/precision medicinePrecision health

Frost & Sullivan’s Visionary Healthcare program, 2017

Precise Matching of Patients to

Treatments

Facilitate reimbursement of drug companion diagnosis tests

– Listing of RAS & ALK test in 2021

Reinforce the precise utilization of medications

– Collect RWE

– Revise reimbursed indications

Integrate medical information and AI review to improve cancer treatment

Conclusion

33

Future Prospects

HTM(Health Technology

Management)

HS(Horizon Scanning)

HTR(Health

Technology

Reassessment)

HTA(Health Technology

Assessment)

35

Positive Feedback Cycle of

Reimbursement

Products

Patients

BudgetPay

for

Value

• Value-based pricing

• Increase patients’

access to new drugs

• Risk-sharing

mechanism

• Allocate

sufficient budget

• Horizon Scanning

• Collection of RWE

• HTR

• Revision of

reimbursed indication

Patients

Industry

NHIA

36

Patient-oriented Heath Care

Medical

care

providers

37

Thank you