Pharmaceutical industry in Taiwan

The pharmaceutical industry in Taiwan is a key segment of the nation’s broader biomedical sector, which includes pharmaceuticals, medical devices, biotechnology, and healthcare services. In 2021, Taiwan’s biomedical industry generated roughly US $23.8 billion in revenue—of which pharmaceuticals, medical devices, and healthcare contributed about 14.8%, 35.4%, and 31.9%, respectively.^[1] The pharmaceutical sub‑sector alone produced revenues of approximately NT $67.05 billion (roughly US $2.2 billion) in 2011, and total pharmaceutical exports reached approximately US $815 million in 2021.^[2][3]

The origins of Taiwan’s pharmaceutical sector date back to the 1960s, when government initiatives encouraged domestic medicine production to reduce dependency on imports and Taiwan shifted from repackaging to manufacturing domestically produced antibiotics, formalin, and other chemical products. The Taiwanese government's 1968 Resolution promoted national pharmaceutical self-sufficiency, leading to the establishment of local drug manufacturers. During the economic surge of the Taiwan Miracle in the 1960s and 1970s, the government supported the pharmaceutical sector through industrial planning and infrastructure investments such as the Ten Major Construction Projects. The establishment of the Pharmaceutical Affairs Law in 1970 and its updates throughout the 1990s and 2000s laid the legal foundation for safety standards and regulatory control over drug manufacturing, importation, and marketing.^[4] By 2000, the industry had grown with approximately 280 Western medicine producers and 250 traditional Chinese medicine firms.

As of 2023, Taiwan hosted around 59 pharma manufacturing sites, including 44 with U.S. FDA or European Medicines Agency approval and 7 approved for the Chinese market. According to Global Data Healthcare, Taiwan has comparatively more high-value Active ingredient biologics and injectables capacity for its size compared to China, despite the fact that the two countries' workforces speak the same language.^[5] These facilities are concentrated near Taipei, Taoyuan, and Tainan, with Taoyuan alone accounting for 30% of all domestic sites.^[6]

The sector features a mix of domestic and foreign-owned companies. While most facilities are Taiwanese-owned, international companies also operate in Taiwan. Companies specialize in APIs, commercial dose injectables, biologics, and Contract manufacturing organization services. Emerging biotech firms such as TailMed Biologics, Taimed Biologics,^[7] and Taiwan Bio-Manufacturing Corporation (TBMC)^[8] focus primarily on advanced therapies, monoclonal antibodies, gene therapies, and vaccines.

Taiwan’s R&D intensity ranks among the highest globally, with total R&D expenditure reaching NT $898 billion (US $27.8 billion) in 2022—nearly 4% of GDP, the highest proportion in its history.^[9] In the biomedical space, the government’s "5+2 Innovative Industries Plan" has prioritized biomedicine since 2017, aiming for annual output of NT $1 trillion (~US $32 billion) by 2025.^[10] Government-backed initiatives include research subsidies, infrastructure development, and legislation such as the Act for the Development of Biotech and New Pharmaceuticals Industry (2007). R&D funding—covering tax incentives, grants, and collaboration with public science parks—has spurred innovation, particularly in generic drug development.^[11] As of 2011, six local firms received NT$220 million in government subsidies (~US $7.7 million) to bolster R&D for generics.^[12]

The Taiwan Food and Drug Administration (TFDA) was established in 2010, integrating multiple agencies to oversee pharmaceuticals, food safety, and medical devices. Taiwan’s API standards have been recognized by the European Commission as equivalent to EU requirements, and as of 2017, over 115 locally developed drugs held Investigational New Drug approval from the United States Food and Drug Administration.^[13] These modern regulations enable Taiwan's pharmaceutical companies to seamlessly transition from Phase II to Phase III trials in Western markets. Taiwan continues working with international regulators to promote collaborative drug development and global market integration.^[14]

Taiwan’s pharmaceutical industry faces persistent price pressures stemming from its National Health Insurance (NHI) system. In efforts to control medical expenditures—where drugs account for about 25% of total medical costs, notably above the OECD average of 16%—the government enforces frequent price‑volume reviews and periodic across‑the‑board price cuts. While patented drugs constitute approximately 70% of prescription spending, patent expirations trigger mandatory price reductions under Article 46 of the National Health Insurance Act, which frequently compress new drug profits and discourages innovation.^[15] These chronic price reductions have raised concerns about future drug availability and supply stability. Industry stakeholders have warned of potential shortages, particularly for older off‑patent drugs, as manufacturers find continued production unprofitable. hospital bargaining power combined with steep reimbursement cuts has led to diminished profitability and reduced incentives for R&D investment. In April 2024, the NHIA implemented new drug price adjustments—totaling NT$55.3 billion—but assured that essential drugs would be exempt; nevertheless, concerns linger over the six‑month lag before possible shortages emerge.^[16]

Another pressing challenge is supply chain vulnerability, largely due to Taiwan’s heavy dependence on imported active pharmaceutical ingredients, with over 90% sourced internationally—nearly half from China. This reliance has led to recent supply disruptions, particularly impacting smaller clinics and pharmacies, prompting calls for a designated drug‑shortage response office.^[17]

Additionally, regulatory barriers affect biopharmaceutical innovation. While programmes like the 2007 Biotech and New Pharmaceuticals Development Act aim to boost R&D, many companies still struggle with limited funding, talent shortages, and difficulties navigating international regulatory frameworks. ^[18] A lack of compulsory patent linkage further deters foreign investment and complicates generic drug approvals.^[19] This creates a fragmented ecosystem where ambitious biotech goals are hampered by weak infrastructure and insufficient global integration

• Health in Taiwan
• Pharmaceutical policy
• Food and Drug Administration (Taiwan)
• National pharmaceuticals policy
• Pharmaceutical marketing
• List of pharmaceutical companies
• Protein structure prediction
• Drug design
• Rational drug design
• Bioinformatics
• Cheminformatics
• Biomedical informatics
• Orphan drug
• Physiologically-based pharmacokinetic modelling
• Pharmaceuticals in India
• Generic drug
• New chemical entity (NCE)
• Quality assurance (QA)
• Quality control (QC)
• Pharmacovigilance