Market Report, "Taiwan Pharmaceuticals & Healthcare Report Q4 2013", published

Taiwan's ageing population continues to be a key driver of pharmaceutical sales in the country. However, we note that deficits in the national health insurance account will act as a downside risk to pharmaceutical firms as extensive price cuts on medicines may be enforced to contain costs.

Headline Expenditure Projections:

* Pharmaceuticals: TWD153.74bn (US$5.20bn) in 2012 to TWD162.43bn (US$5.54bn) in 2013; +5.7% in local currency terms and +6.6% in US dollar terms. Forecast increased from previous quarter due to revised historic data.
* Healthcare: TWD975.76bn (US$32.99bn) in 2012 to TWD1,023bn (US$34.93bn) in 2013; +4.9% in local currency terms and +5.9% in US dollar terms. Forecast in line with previous quarter's projections.
* Risk/Reward Rating: Taiwan moved up to fourth position in our latest Pharmaceutical Risk/Reward Rating (RRR) assessment of the 18 key markets in the Asia Pacific region. The country had been ranked sixth in the previous quarter. 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.

Full Report Details at
- http://www.fastmr.com/prod/670685_taiwan_pharmaceuticals_healthcare_report_q4_2013.aspx?afid=301

Key Trends & Developments:

* In its submission to the Special 301 report, the Pharmaceutical Research and Manufacturers of America (PhRMA) recommended that Taiwan be placed on the Watch List. The report reviews foreign countries that restrict fair market access to PhRMA members, who are dependent on intellectual property protection and fair operating conditions. Its key concerns around Taiwan's pharmaceutical market include Price and Volume Survey, intellectual property protection and enforcement and the National Health Insurance Act.
* In June 2013 Soo Whai-jen, managing director of Taiwan's Supra Integration and Incubation Center, announced that the organisation plans to provide TWD50mn (US$1.7mn) to biotechnology start-up firms over three years, and at least TWD$100mn (US$3.4mn) to qualified research institutes annually. There are currently 10 drug development and four medical equipment development cases under review.

BMI Economic View: Despite renewed optimism in Taiwan's economic growth prospects for the rest of the year, we are sticking to our downbeat expectations on the island's economy. We expect the trade rebound to be transient, with progressive weakness outweighing the trade support provided by the Association of Southeast Asian Nations region. Indicators such as retail sales and inflation have also reflected subdued domestic demand conditions. We have consequently downgraded our 2013 and 2014 real GDP projections from 3.0% and 4.0% to 2.1% and 3.0% respectively.

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