DECISION MAKERS AND DECISION-MAKING PROCESSES DIAGRAM
Figure 1. Decision-makers and decision-making process for coverage and reimbursement in Taiwan.
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DOH: Department of Health; TFDA: Taiwan Food and Drug Administration; BNHI: the Bureau of National Health Insurance
The population in Taiwan was estimated in July 2011 at 23.3 million and the GDP per capita was estimated in 2011 as US$20,503.Taiwan's universal healthcare system, known as the National Health Insurance (NHI) Program, is a mandatory social insurance program that has been administrated by the Department of Health (DOH) and operated by the Bureau of National Health Insurance (BNHI) since 1995. It covers more than 99% of citizens. Citizens need to pay the premium and have the right to access any physician or hospital. The premium rate was 5.17% in April 2010. The system is primarily funded by the premiums paid collectively by the insured, employers, and governments. The National Health Insurance system offers a comprehensive and uniform benefits package to all those covered by the program, and with a valid health insurance IC card, the insured have access to more than 18,000 contracted health care facilities around the country, offering comprehensive inpatient and outpatient services, dental services, and traditional Chinese medicine therapies. About 85% of the hospitals and 98% of the primary clinics are private. Using the global budget system and fee-for-service mechanism, the healthcare providers claim for services provided. The health care expenditure was around 6.9% of the GDP in 2011. For more details on the BNHI, please see http://www.nhi.gov.tw/english/index.aspx.
The medical device market size in Taiwan was 1.75 billion dollars in 2009, the 4th largerst in Asia, and over 75% of the market is still supplied by imports. By the end of February 2010, there were 8,769 medical devices covered under the program.
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DECISION-MAKERS AND THEIR INFLUENCERS
All new medical devices are reviewed and approved by the Taiwan Food and Drug Administration (TFDA) and Department of Health (DOH) before market access.
TFDA: Taiwan Food and Drug Administration. The TFDA is responsible for the regulatory approval of medical devices. The Department of Medical Devices and Cosmetics, under the TFDA, is responsible for the implementation of the regulations and standards of medical devices, such as implementing quality manufacturing systems for medical devices, implementing GCP inspections, overseeing product registrations and evaluating clinical trials.
CDE: Center for Drug Evaluation. It was commissioned by the Department of Health (DOH) of Taiwan on July 13, 1998, as a non-governmental, not-for-profit organization. The CDE evaluates new drugs and new medical devices for regulatory requirements and offers consultation services to related parties. The main tasks of the CDE include: review of new drug applications, evaluation of pre-marketing approvals and clinical trial protocols for medical devices, review of clinical trial protocols for new drugs, bridging study evaluation, Taiwan's critical path program (of bio-medical product development), and consultation. Through these, the CDE plays a pivotal role in enhancing the quality and efficiency of drug evaluations for appropriate and timely access to innovative medicine, thus promoting health and welfare of the public.
HTA Division: The Health Technology Assessment Division was officially approved by the Board of CDE on December 20, 2007, and has been 100% funded by the DOH on an annual basis starting in 2008. The HTA division is organized under the CDE. The major functions of the HTA division are to provide the evidences report to the decision makers in the BNHI for every new drug submitted to the BNHI for reimbursement purposes, and to provide research reports for those temporarily raised issues during DBC appraisal meetings. The HTA division is not assessing non-drug technologies at this moment.
BNHI: Bureau of National Health Insurance. The BNHI is the decision maker of the medical device reimbursement and pricing. Once a product is added to the reimbursement list by the BNHI, its reimbursement price will be determined by the Medical Device Division in the BNHI, and can be used at any of the healthcare facilities in Taiwan.
MDEC: Medical Device Experts Committee. The MDEC consists of clinical specialists, health economists, material experts, nurses and officers from BNHI. They are responsible for providing recommendations to the BNHI regarding new medical device reimbursement: whether to list them or not as well as on the presence of any restrictions on coverage. For some contentious cases, the expert committee will request an economic evaluation by the Health Technology Assessment Division (HTA Division) within the Center for Drug Evaluation (CDE).
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REGULATORY PATHWAY / MARKET APPROVAL PROCESS
Taiwan regulates both medical devices and pharmaceuticals under the same legislation. According to the Pharmaceutical Affairs Act Article 13, medical devices mean apparatuses, appliances, instruments and their accessories, fittings, and parts, which are used to diagnose, treat, relieve or prevent human diseases or may have an effect on the structure and function of human bodies.
Regulatory framework for a medical device in Taiwan covers product classification, quality system and GMP manufacturing, registration of products, labeling control, commercial advertisement control, control of clinical investigation, adverse event reporting, and sales and distribution control.
Medical devices are, by their functions, purpose, method of use and operational principles, divided into the following 17 categories:
- Clinical chemistry and clinical toxicology devices
- Hematology and pathology devices
- Immunology and microbiology devices
- Anesthesiology devices
- Cardiovascular devices
- Dental devices
- Ear, nose, and throat devices
- Gastroenterology and urology devices
- General and plastic surgery devices
- General hospital and personal use devices
- Neurological devices
- Obstetrical and gynecological devices
- Ophthalmic devices
- Orthopedic devices
- Physical medicine devices
- Radiology devices
- Other categories specified by the central competent health authority.
For regulatory administration purposes, medical devices are further classified into 3 classes by degree of risk to a human body:
- Class 1: low risk
- Class 2: medium risk
- Class 3: high risk
The TFDA is responsible to determine product classification. A manufacturer may submit an application for device classification determination to the TFDA if their device class is unknown.
Medical devices in different classes are subject to different levels of regulatory control for product registration; see the table below:
QSD registration, if not exempted, and notification to TFDA
QSD registration and product registration with TFDA or Certification with a third party
QSD registration and product registration with TFDA, clinical data required
For a Class 1 product notification to TFDA, the general documents required are:
- Application form
- Statement of Truth from the manufacturer (states that the product is not a copy of other patented devices/design, the facts in the documents are true, etc.)
- Business license of the importer/distributor
- Free Sales Certificate
- QSD (Quality System Documentation) registration certificate
For a Class 2 or Class 3 product, when a predicate device exits in Taiwan, the general documents required for product registration with the TFDA are:
- Form of medical device review
- Checklist of submitted documents
- Application form (original and copy)
- Legal documents (e.g., Business license, EC-certificate, Free Sales Certificate, QSD certificate, etc.)
- Product information (including information of predicate devices, if any, in Taiwan)
- Test reports
- Clinical data (if applicable)
For Class 2 products without a predicate in Taiwan, general documents required for product registration with the TFDA are:
- Aforementioned documents for Class 2 products with a predicate device in existence
- Clinical evaluation report
- For the following cases the clinical report is not required:
- No differences in function between human races
- No serious adverse events or recall happened for its intended use and indication for use
- The differences between the new device and approved devices in the market do not affect the product safety and effectiveness via bench test/preclinical test
- US FDA cleared and CFG with same intended use and indication for use
- EU CE-marked and FSC with same intended use and indication for use
For Class 3 products without a predicate in Taiwan, documents required for product registration with TFDA in general are:
- Aforementioned documents for Class 3 products with a predicate device in existenceClinical evaluation report
- Clinical data collected in Taiwan may be required; TFDA shall be consulted.
Process of product registration
Figure 2 gives an overview of the registration process in Taiwan.
Figure 2. Overview of the registration process for medical devices in Taiwan
The manufacturer shall first identify if his product is a medical device under the meaning of the Pharmaceutical Affairs Act (Article 13), then the device classification shall be determined. Before submission of the product registration, the manufacturer shall meet the requirements of GMP by submitting Quality System Documentation (QSD) Registration. Many Class 1 products are exempted from the QSD requirement.
DOH will have authorized the following 4 institutes to review QSD:
- The Industrial Technical Research Institute (ITRI),
- The Metal Industry Research and Development Center,
- The Electronics Testing Center, and
- The Pharmaceutical Industry Development Center.
An EU manufacturer may submit QSD review via their local agent in Taiwan to one of the institutes listed above with the following documents:
- Application form
- Free Sale Certificate (must cover all products manufactured in the plant to be registered)
- EC-certificate and ISO 13485 Certificate
- General information
- Factory name and address
- Brief history
- Organizational chart
- Registered capital
- Plant description (size, location, product manufacturing activities, etc.)
- Product list (name and code of all products manufactured at the plant; any toxic or hazardous substances handled; whether drugs for humans or animals, radiopharmaceuticals, diagnostic reagents, cosmetics, or food products are also manufactured on site)
- Layout (drawing of plant, drawing of buildings showing each floor separately with a list of rooms and facilities, flows for personnel and materials coded by color, blueprints (if requested))
- Manufacturing flow chart for products
- Master index of the main equipment
- Quality Manual
- Top level of Standard Operating Procedures (SOP) covering all 20 points required by QSD (SOP per ISO 13485:2003 acceptable)
- List of all SOP numbers and document description
- List of Level III SOP numbers and document description (this is not necessary for the first submission but must be submitted if requested by the DOH)
Taiwan has an agreement with the EU on acceptance of quality certification. If an ISO 13485 Certificate issued by a Notified Body (NB) is recognized by the Taiwan Department of Health, the manufacturer can take an abbreviated process to apply for QSD approval with the following documents:
- Application form
- ISO 13485 Certificate
- The last audit report issued by an EU Notified Body listed by TFDA
- Free Sale Certificate
- Last QSD certificate (in case of renewal)
Currently the recognized NBs are:
- AMTAC, BSI PS, DEKRA (KEMA), DGM, G-MED, MEDCERT, MDC, NSAI, SGS UK, TUV PS, TUV Rheinland, and UL UK.
After the QSD approval (valid for 3 years), product registration shall be submitted to TFDA with the following documents:
- QSD registration certificate
- Product technical documents (including non-clinical test reports, final quality control records, test reports or summary, and labeling for the identified predicates)
- Legal documents, such as Free Sales Certificate; EC-certificate, CFG
- For a new device without a predicate in Taiwan, clinical data shall be included
- Clinical data may also be required for certain Class 3 devices, or devices with new technology, material, and no existing predicate device in Taiwan. Local clinical investigation may be required as well for such devices. All clinical investigation shall follow Good Clinical Practice. Foreign data may be accepted under certain conditions.
- Product registration shall be submitted via a local agent
- Application fee: 10 k NTD (USD$350)
Product registration review at the TFDA usually takes about 1-2 years. The product approval license, valid for 5 years, is issued to the Taiwan agent who is authorized to register the product. A manufacturer should put into consideration the expiration date of the product license and QSD to ensure that renewal are submitted in porper time for an uninterrupted market authorization.
The TFDA requires adverse event reporting and post market surveillance (PMS) program for certain medical devices. A PMS follow up for 3 years has to be conducted after license approval for the following devices:
- Drug Eluting Stent
- Contour Threads
- Silicon Breast Implant
- Intraocular Lens
- Cardiac Ablation System
The follow-up reports are submitted to the TFDA once every 6 months.
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REIMBURSEMENT AND COVERAGE/ PAYMENT FLOW MAP AND PROCUREMENT PROCESSS
The reimbursements of the new medical devices are determined by the Bureau of National Health Insurance (BNHI). There are two reimbursement types for medical devices established by the BNHI: a fee-for-service (FFS) schedule and, Taiwan-Diagnosis Related Groups (Tw-DRGs).
During the NHI system's early years, Taiwan's health care providers were reimbursed based on a "fee-for-service" system. Under the fee-for-service system, patients only pay a small amount of copayment to the medical facility, and the medical facility receives the reimbursement from the BNHI for all the services they provided.
Between 1998 and 2002, the BNHI phased in a global budgeting systemfor each medical sector (e.g. dental, Chinese medicine, hospitals, etc.). The medical expenditure negotiation committee (MENC) sets the budget and distribution plan of a medical sector's medical expenses for each fiscal year. Consequently, health fields will provide medical services within the scope of their fixed budget. If the total services performed exceed the field's budget quota, the FFS reimbursement ratio would start to deflate, which would shrink payment for each service performed by the medical field.
In 2010, the BNHI launched the Tw-DRGs payment system for certain inpatient diagnosed groups, in which hospitals are reimbursed as a package for the entire treatment of a particular episode for a patient. However, unlike all other countries, Taiwan is simultaneously and continually setting reimbursement prices for individual medical devices used in the DRGs procedures.
Moreover, in 2011, the amended and promulgated “Second Generation” National Health Insurance Act legitimized the Balance Billing program for expensive medical devices. Under the Balance Billing program, the NHI system also covers a number of newly developed and more advanced products that provide better health benefits. For patients who choose to use more expensive medical devices, the NHI system covers the standard fee it would pay for similar conventional medical devices, while patients cover the additional cost.
The new medical device submission process requires manufacturers to complete a New Product Application form after they have received the marketing approval granted by the TFDA. The submission form and guidance notes on how to complete it are provided on the BNHI website. The Medical Device Experts Committee consists of BNHI officers, physicians, and economists. The Committee has regular meetings to discuss new medical device cases submitted by the providers. The Committee is responsible to make two recommendations to the BNHI regarding new medical device reimbursement: listing or not, and any restrictions on coverage. Once a product has been added to the reimbursement list by the BNHI, its reimbursement price will be determined by the Medical Device Division in BNHI, and it can be used at any healthcare of the facilities in Taiwan. The application result will be announced to the applicants by the BNHI.
When assigning a reimbursement price for a new product, the BNHI will compare the new product with similar products currently on the market. Generally, the BNHI will request that an applicant provide a list of published reimbursement prices from other developed countries. If reimbursement prices are not available, then the actual market prices for these countries should be provided. The applicant also has the option to refuse the reimbursement price via an appeal.
PRICING PRINCIPLES - three possible outcomes:
(1) Applicant receives the desired reimbursement price for their product
In this case, the medical device company will most likely meet their desired profitability in their product’s market. Once a product is listed for reimbursement, it cannot switch to the self-paid (non-reimbursed) market.
(2) Applicant does not receive the desired reimbursement price for their product
For this outcome, the company may not have reasonable profit margins since the distributors may have to pay the discount to the hospitals. The additional expenses incurred by the distributors could also impact their ability to promote the product efficiently.
(3) Applicant chooses to sell the product as “Out of Pocket”
The “Out of Pocket” healthcare market for better quality products is becoming more popular in hospitals as it does not affect the hospital’s Global Budget. Nevertheless, the company will still need to apply for reimbursement, as required by the BNHI and hospitals, even if an “Out of Pocket” product is desired.
Price-Volume Survey (PVS)
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Periodically (usually every other year), the BNHI puts both drugs and medical devices through an exercise known as the Price-Volume Survey (PVS). The objective is to ensure that reimbursement rates reflect the real prices that hospitals are paying the vendors.
Details on specific data requirements and tools needed to support these decisions (for example health technology assessment, health economic analysis, budget impact, etc.), are included in the documents, whenever applicable.
- Comparative effectiveness information / Clinical trial results
Efficacy and safety data from clinical trial reports should be provided. However, there is no requirement for the comparative data or source of the data (from a head-to-head RCT, from an indirect comparison of two sets of RCTs involving a common comparator, or from non-randomized studies).
- Cost-Effectiveness information
HTA/CDE will gather evidence from the available resources. However, if a local Pharmacoeconomics study/data can be presented, it may be of great help in supporting the submission.
- Budget impact information.
- Any ethical, social, and/or political issues.
BNHI: Bureau of National Health Insurance
DOH: Department of Health
CDE: Center for Drug Evaluation
GMP: Good manufacturing practice
MDEC: Medical Device Experts Committee
NTD: New Taiwan Dollar
QSD: Quality system documentation
TFDA: Taiwan Food and Drug Administration
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- Evidence-based decision-making in Asia-Pacific with rapidly changing health-care systems: Thailand, South Korea, and Taiwan. Jirawattanapisal T, Kingkaew P, Lee TJ, Yang MC. Value Health. 2009 Nov-Dec; 12 Suppl 3:S4-11.
Health Technology Assessment Division / CDE: http://www.cde.org.tw/English/Pages/e-default.aspx
Taiwan FDA website: http://www.fda.gov.tw/Bgradation_index.aspx?site_content_sn=39
- National Health Insurance in Taiwan 2011 Annual Report. 2011. Bureau of National Health Insurance, Department of Health, Executive Yuan, Taiwan. (in English)
- Chao-ming Huang. The Administration of Drugs and Medical Devices in NHI. 2008
- Lian Zhang. Overview of Medical Device Regulation and Registration in Taiwan. 2011.
- Pharmaceutical Affairs Act (藥事法), 200507 (in English)
- Guidelines for Registration of Medical Devices(醫療器材查驗登記審查準則) (in English)
- Procedure for Reporting Severe Adverse Reactions to Medicines(嚴重藥物不良反應通報辦法) 200503 (in English)
- Special Material. Bureau of National Health Insurance, Department of Health, Executive Yuan, Taiwan.
- 2011 Price and Volume Survey of Special Material. Bureau of National Health Insurance, Department of Health, Executive Yuan, Taiwan. http://www.nhi.gov.tw/webdata/webdata.aspx?menu=21&menu_id=713&WD_ID=850&webdata_id=3631
AUTHOR & CONTRIBUTOR
Hui-chu Lang, PhD, President, TaSPOR; Professor, National Yang Ming University, Taiwan
Lian Zhang, PhD, Sr. QA&RA Consultant, Synergus AB, Stockholm, Sweden
Xue Grace Chiou, MS,PhD Candidate, Health Policy Administration, School of Public Health, Univ. of Illinois, Chicago, Illinois, USA
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Professor Raoh-Fang (Jasmine) Pwu, PhD, MS, Researcher, Center for Drug Evaluation, Taipei, Taiwan
Dr. Ming-Chin Yang, DrPH, Associate Professor, National Taiwan University, Taipei, Taiwan
Randa Eldessouki, MBBCH, MSc, MD, Director, ISPOR Scientific Initiatives, ISPOR, NJ, USA
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