Taiwan Seeks to Strengthen its Intellectual Property Governance

Improvement in the protection of intellectual-property rights is a critical part of Taiwan's ability to raise its standing in the global life-sciences industry. A recent PricewaterhouseCoopers analysis identified two long-standing intellectual property issues that could inhibit innovator-drug companies' willingness to introduce new products to the market (1). The report says that Taiwan has not yet established patent linkage in its regulatory procedures for approving generic drugs and does not provide adequate data exclusivity for the full range of eligible pharmaceutical products. To address these issues, Taiwan's Department of Health (DOH) is evaluating the implementation of patent linkage and examining procedures for conducting specialized clinical trials. Patent linkage is the practice of linking market approval for generic medicines as well as their pricing and reimbursement status to the patent status of the original reference product. It prohibits granting market authorization to generic drugs until original drug patents have expired and it has been determined that the patents are not being infringed, invalid, or are unenforceable (2).

A recent report by the Office of the United States Trade Represenative (USTR) identified pharmaceutical pricing and management in Taiwan as two barriers in promoting trade between the US and Taiwan (3). Through the Trade and Investment Framework Agreement (TIFA) process, the report says that the US has been encouraging Taiwan to adopt a system of actual transaction pricing (ATP) to address the significant gap between the amount that the Bureau of National Health Insurance reimburses for a pharmaceutical product and the price actually paid to the provider of that product. "This gap distorts pharmaceutical trade and prescription patterns in Taiwan," says the report. "These distortions are worsened by hospital doctors' ability to both prescribe and dispense pharmaceuticals, which may result in prescribing practices based on monetary factors instead of purely medical considerations. Separating these functions would help to resolve the long-term pricing problem."

The USTR report also says that Taiwan's lengthy pharmaceutical registration process imposes unnecessary costs and slows market entry for new drugs that have already received regulatory approval in advanced economies (3). For example, the Taiwan DOH Bureau of Pharmaceutical Affairs (BOPA) requires a company that wants to register a drug for sale in Taiwan to provide a certificate of pharmaceutical product (CPP) certifying the drug for sale in two separate markets outside Taiwan. BOPA is considering new registration procedures that would reduce the current requirement to one CPP, which would help speed introduction of new pharmaceuticals, especially US-made drugs, into the Taiwan market, according to the USTR report (3).

Through the TIFA process, the US is encouraging Taiwan's DOH to take action to resolve pharmaceutical pricing and reimbursement problems. The DOH has agreed to set up working groups to study options to bring more transparency and fairness to drug pricing, implementing ATP, and separating dispensing and prescription (3).

Developments in intellectual property

Taiwan joined the World Trade Organization in 2002 and raising intellectual property enforcement remains an important goal. The Taiwan Intellectual Property Office (TIPO) of Taiwan's Ministry of Economic Affairs is the government body within Taiwan to formulate, implement, and enforce intellectual property rights within the country.

TIPO recently unveiled its "Triple E Plan," a new policy focus for 2009 that seeks to promote "examination, excellence, and enforcement," in intellectual property, according to information from TIPO and the Taiwan External Trade Development Council (TAITRA).

Under the goal of "examination," TIPO plans to improve the efficiency of patent examinations by increasing the number of examination personnel, ensuring a standard level of examination quality, and increasing the number of new applications processed. The body has set a goal of processing 50,000 new applications for 2009.

Under the goal of "excellence," TIPO wants to strengthen the legal structure of intellectual-property rights in Taiwan through completing amendments to the Patent Act and Trademark Act, according to TIPO and TAITRA.

Under the goal of enforcement, TIPO is interested in increasing copyright awareness and enforcement through three methods:

• Improving mechanisms of copyright licensing uses (i.e., advocating proper, legal use of copyright and sound mechanisms for intermediary licensing)

• Promoting the new 2009–2011 Intellectual Property Rights Action Plan to emphasize investigation of counterfeiting and ensuring the assets of industry

• Coordinating with prosecutors, police, and the courts to strengthen the judicial system and ensure the protection of intellectual property rights.

For more on this topic, see "Taiwan, No Longer a Life-Sciences Island Unto Itself"

References

1. "The Changing Dynamics of Pharma Outsourcing in Asia," PricewaterhouseCoopers (New York, Sept. 2008)

2. "Patent-Related Barriers to Market Entry for Generic Medicines in the European Union," European Generics Association, Brussels, June 2008.

3. "2009 National Trade Estimate Report on Foreign Trade Barriers," Office of the United States Trade Representative, Washington, DC, pp. 482–483, Mar. 2009.