Singapore, July 2010: The Taiwanese pharmaceutical market in 2009 was worth an estimated $3.8 bn at consumer prices, with steady growth in recent years driven more by the steady growth in the region's economy. The market is expected to reach $4.83 bn by 2014, posting a compound annual growth rate (CAGR) of 3.25 percent in local currency terms, which will fall to 2.64 percent by 2019, according to Business Monitor International report (BMI).

Generics, which currently account for approximately 27 percent of the total market by value, will slightly increase its share, not necessarily at the expense of patented drugs, but more likely at that of over-the-counter (OTC) medicines.

Taiwan is now focusing on increasing its export-oriented 'high-end' API products with higher profit margins in order to differentiate from API producers in India and China. Compared to pharmaceutical products and Chinese herbal medicines, both categories, which have seen production output decline, API production output has bucked the trend, mainly due to rising international orders.

To support the growing pharma industry, Taiwan has finally set up Food and Drug Administration (FDA). From January 1, 2010, the responsibility for pharmaceutical regulation rests with the newly-created FDA. This agency streamlines four cabinet bureaus formerly under the control of the Department of Health (DOH). The FDA integrates the functions of the Bureau of Food Sanitation, the Bureau of Pharmaceutical Affairs, the National Laboratories of Foods and Drugs, and the National Bureau of Controlled Drugs and will have a staff of 505 people.

The new FDA has been assigned tasks relating to the development of drug production standards and regulations in line with international norms. The new regulator is also expected to approve pharmaceuticals and medical devices more swiftly, which is one of the areas that has been criticized by multinational companies in the past.

Medical devices market

The local medical device industry's capability is slowly evolving, and new growth trends are seen in export categories such as orthopaedic and implantable products, dental products and contact lenses. The market, long known as a 'difficult' one because of the regulatory environment, has been gradually showing signs of improvement. The medical devices market is growing at a CAGR of over eight percent during 2008-2013.

Taiwan is the only country in Asia having national health insurance program, covering 99 percent of the population. The program has been working effectively for more than 10 years. This will support the growth of the medical devices market in Taiwan.

Biotech

To ensure a successful pathway for biotech industry, Taiwan's government has announced its "Taiwan Biotechnology Takeoff Diamond Action Plan," a strategic plan that contains four components such as strengthening industrial value chain and pre-clinical development in the commercialization process; establishing a biotechnology venture capital fund, the 'Mega Fund'; promoting an integrated incubation mechanism; and establishing the Taiwan Food and Drug Administration.

In an effort to solidify its leadership role in the global biotech industry, Taiwan announced introduction of a 'Mega Fund', a $1.9 bn commitment to biotechnology. The 'Mega Fund' will help Taiwan's already robust biotech industry continue to grow and support global bio-medical development and commercialization. The biotech venture capital fund, with the aim of doubling the annual output of the Taiwan’s biotech industry to $8.8 bn in four years.

With support and keen interest from government the domestic venture capital industry too became more interested to invest in the local biotech sector. In 2009, several biotech companies such as St. Shine Optical, TTY Biopharm, Abnova, Taidoc Technology, G&E Herbal biotech has successfully raised capital through initial public offerings of common stock.

With its brain trust of world-class research institutes and universities, and IP protection, Taiwan has both the infrastructure and a proven expertise in integrating electronics, diagnostic information, semiconductors, micromatching and material technologies with biological and medical sciences.