Boston, MA -- (SBWIRE) -- 12/26/2013 -- Taiwan's ageing population continues to be a key driver of pharmaceutical sales in the country. However, while the increase in premium collection resulted in a strong balance sheet for the National Health Insurance (NHI) scheme, it runs a risk of returning to deficit, as it is difficult to assess the actual medical demand for the ageing population. Moreover, as the population contracts over time not only will fewer people contribute to the fund but the actual increase in the number of users will place further downside pressure on BNHI to cut its coverage in order to contain costs - potentially affecting drug prices. The advent of health economics, coupled with increasing budget deficits, points to more caps on medicine expenditure - especially on essential drugs.

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Headline Expenditure Projections:

- Pharmaceuticals: TWD161.33bn (US$5.51bn) in 2013 to TWD168.94bn (US$5.93bn) in 2014; +4.7% in local currency terms and +7.7% in US dollar terms. Forecast increased from previous quarter due to a change in the drug price adjustment policy.
- Healthcare: TWD1022.12bn (US$34.88bn) in 2013 to TWD1,075.30bn (US$37.73bn) in 2014; +5.2% in local currency terms and +8.2% in US dollar terms. Forecast in line with previous quarter's projections.

Risk/Reward Rating: Taiwan moved one down to overall fifth position in our latest Pharmaceutical Risk/ Reward Rating (RRR) assessment of the 18 key markets in the Asia Pacific region scoring 62.8 out of 100 behind Japan, Australia, South Korea, and China respectively. While it is a small pharmaceutical market, Taiwan boasts above-average Rewards and Risks, propped up by factors such as the high per capita consumption of medicines and an excellent chance to capitalize on the mainland China market. Taiwan has a very strong API industry and although it is small, which makes the domestic market competitive and particularly constraint, it provides specialty chemicals and high quality APIs for global needs. The now annual price adjustments will certainly fuel the need for local companies to outgrow the small domestic market.

Key Trends & Developments:

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