China's Innovation Drug Policy: Five Impacts on Taiwan Biotech

China's Innovation Drug Policy: Five Impacts on Taiwan Biotech
China's Several Measures to Support High-Quality Development of Innovative Drugs represents a strategic overhaul of its pharmaceutical ecosystem. Covering R&D through reimbursement via 16 concrete actions, this policy accelerates China's biotech ambitions, posing significant challenges for Taiwan:
1. R&D Resource Drain:　China is concentrating resources in hubs like Shanghai and Suzhou, offering 50% subsidies for preclinical research. This creates a powerful magnet for global early-stage projects, diverting talent and investment from Taiwan. Countermeasures must include strengthening Taiwan’s translational research platforms (e.g., Academia Sinica) and introducing R&D tax credits.
2. Accelerated Market Acces：China now approves breakthrough drugs in 60 working days via rolling reviews – dramatically faster than Taiwan’s average 1.5 years. Acceptance of Real-World Evidence (RWE) further shortens development cycles. Innovent Bio’s PD-1 inhibitor entered China 22 months before Taiwan equivalents, capturing critical market share.
3. Clinical Trial Shift：China’s streamlined ethics review (60 days vs. 90) and regional mutual recognition systems have increased trials by 37% YoY. Multinationals are relocating studies: Pfizer moved 50% of its Asia-Pacific Phase I trials from Taiwan to Shanghai in 2023, citing 3x faster patient recruitment.
4. Reimbursement Leverage：The NRDL negotiation channel drives volume through aggressive pricing (avg. 61.7% discount) while boosting sales (avg. 320% post-listing). Taiwan’s delayed reimbursements create access gaps: Roche’s Alecensa reached 85% of Chinese lung cancer patients during Taiwan’s 28-month approval delay.
5. Global Market Squeeze：China links domestic reimbursement to international expansion commitments. Local players like BeiGene leverage this to rapidly enter global markets, while Taiwanese firms struggle without scale. Taiwan Liposome’s EU-approved injection holds <1.5% global share due to lack of China access.
Policy Ripple Effect: Taiwan biotech IPOs fell 42% in 2023 as companies sought funding via Hong Kong’s Chapter 18A. China’s 6-month drug-to-reimbursement timeline (vs. Taiwan’s 23 months) threatens Taiwan’s competitive position.
Taiwan’s Strategic Response
Flexible Reimbursement: Implement temporary payment codes (T-codes) for pre-confirmed efficacy drugs
Cross-Border Evidence: Establish US-Taiwan-China RWE mutual recognition
Risk-Sharing Models: Adopt outcomes-based payment agreements with NHI
China’s policy weaponizes its 1.4 billion-patient market to drive industrial upgrading. Taiwan must accelerate regulatory reform and reimbursement innovation by 2025 to avoid marginalization. As China moves to biannual reimbursement updates, Taiwan’s annual NHI negotiations risk leaving patients behind and stalling industry growth. Policy agility is now existential – the window for adaptation is closing.