A Regulatory Overview of the Pharmaceutical Industry in Taiwan and Commercialization Approaches
Introduction
In our previous article, An Introduction to the Drug Registration Systems in Hong Kong and Macau, we provided a brief overview of the drug registration systems in those regions. This is the second article in the series and introduces the drug registration system in Taiwan and the related commercialization arrangements.
Taiwan has different regulatory requirements to Hong Kong and Macau regarding drug registration, pharmaceutical business qualifications and the entry of mainland capital. However, pursuant to the provisions of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area and the Regulations Governing the Approval of Investment in Taiwan by the People of the Mainland Area, mainland pharmaceutical enterprises face regulatory restrictions if they seek to directly establish a subsidiary or branch office in Taiwan. Third-region companies that are not mainland pharmaceutical enterprises but contain mainland investment may also be subject to the same regulatory restrictions or face stricter scrutiny; for such types of applications, beyond substantial extensions in review timelines, multiple supplemental filings and explanations may be required. Furthermore, if mainland capital exercises de facto control over a Taiwanese partner through contractual arrangements or other means, it may also be subject to the same regulatory restrictions. Generally speaking, there is a relatively high threshold for mainland capital to invest and operate in Taiwan.
All operators engaged in pharmaceutical business in Taiwan must possess a pharmaceutical dealer qualification. Conducting clinical trials for the purpose of registration for specific pharmaceuticals, as well as applying for and holding marketing authorizations (MAs), may only be undertaken by operators qualified as pharmaceutical dealers.
The most viable form of collaboration between cross-strait enterprises at present is for mainland pharmaceutical companies to collaborate with qualified Taiwanese pharmaceutical dealers through licensing, distribution and other arrangements, to enter the Taiwan market. This article aims to help readers understand the regulatory governance system and potential collaboration models within Taiwan’s pharmaceutical industry.
Taiwan’s Regulatory Framework and the Regulatory Role of Partner Pharmaceutical Dealers
The primary legislation governing Taiwan’s pharmaceutical industry is the Pharmaceutical Affairs Act (PAA). The competent authority is the Taiwan Food and Drug Administration (TFDA) under the Ministry of Health and Welfare (MOHW), which is responsible for reviewing drug clinical trials, evaluating applications for drug registration and post-market surveillance. The Center for Drug Evaluation (CDE) is a government-established foundation and is commissioned by the TFDA to perform technical reviews, provide regulatory consultations and conduct health technology assessments (HTA). It should be noted that medical devices were also historically regulated under the PAA; however, since 2021, medical devices have been governed under the standalone Medical Devices Act, though the overarching regulatory framework remains similar.
Under the PAA, only operators that have been duly registered and granted a Pharmaceutical Dealer License may engage in the pharmaceutical business. Pharmaceutical dealers are classified into two categories: pharmaceutical distributors and pharmaceutical manufacturers. The former may engage in the wholesale, retail, import and export of pharmaceutical products in Taiwan and related research and development activities, while the latter may engage in manufacturing, processing, wholesaling and exporting their products, as well as importing APIs for self-use and related research and development activities. Only operators registered as companies in Taiwan, or foreign/mainland companies that have established a branch office in Taiwan, are eligible to apply for a Pharmaceutical Dealer License. Only operators holding a Pharmaceutical Dealer License may apply for drug registration and obtain a MA for individual products. MAs are categorized into import licenses and manufacturing licenses: the former refers to importing finished products into Taiwan for wholesale and retail, while the latter refers to manufacturing (and selling) pharmaceuticals locally in Taiwan. Domestic clinical trials conducted for drug registration purposes must also be filed by qualified pharmaceutical dealers. Therefore, if a mainland enterprise cannot register and establish a subsidiary or branch office in Taiwan, it must partner with a Taiwanese pharmaceutical dealer possessing the aforementioned license to conduct business in Taiwan.
To the Taiwanese authorities, the local pharmaceutical dealer holding the MA assumes the administrative rights and obligations associated with the product under the PAA and serves as the legal entity liable for the product in Taiwan. These obligations include post-market safety surveillance and adverse drug reaction reporting, product recalls, import and distribution compliance, product labeling, package insert management and the pre-approval of drug advertisements. Beyond evaluating the commercial marketing capabilities, the local partner must not only possess the aforementioned pharmaceutical dealer qualifications, but also maintain a solid track record in regulatory compliance and quality management.
The subsequent sections explore clinical trials, drug registration and the National Health Insurance (NHI) regulations within this collaborative framework.
Clinical Trials and the Utilization of Mainland Data
In Taiwan, human research, human trials and clinical trials are governed by distinct regulations and have separate statutory definitions. In the context of drug registration, clinical trials conducted for the purpose of registration must comply with the PAA and the Regulations for Good Clinical Practice (TW GCP). This includes obtaining prior approval from the TFDA and from the Institutional Review Board (IRB) of the trial institution regarding study protocols and informed consent forms. Trials may only proceed in accordance with protocols after subject’s consent is properly secured pursuant to the relevant regulations.
The regulatory framework of the TW GCP aligns with the standards of the International Council for Harmonisation (ICH). In 2020, the TFDA issued the Good Clinical Practice Guidelines referencing ICH E6(R2) as supplementary guidance to the TW GCP. In response to the release of the updated ICH E6(R3) Annex 1 by the ICH in January 2025, the TFDA also pre-announced a draft revision of its Good Clinical Practice Guidelines in February 2026 for corresponding adjustments, which has not yet taken official effect.
Pursuant to the PAA and the Medical Care Act, only teaching hospitals are permitted to conduct clinical trials on investigational drugs. In this regard, Taiwan boasts a high density of medical centers and superior patient enrollment efficiency, with trial quality consistently recognized by multinational pharmaceutical companies. The CDE also offers pre-market regulatory consultation services, facilitating preliminary communication with the competent authorities during the trial design stage.
Under the TW GCP, the trial sponsor is liable for compensation arising from the trial conducted by the principal investigator or trial institution, or must procure liability insurance; however, this does not apply to liabilities resulting from medical malpractice by the principal investigator or trial institution. For human research or clinical trials unrelated to registration, the law does not restrict the sponsor to being a Taiwanese pharmaceutical dealer and an overseas sponsor may assume such liabilities. However, for registration-related clinical trials, the application guidelines mandate that the applicant must be a Taiwanese pharmaceutical dealer. Consequently, an overseas sponsor (Global Sponsor) must commission a Taiwanese pharmaceutical dealer to act as the regulatory sponsor (Local Sponsor) to apply for trial approval and assume the associated liabilities. A common arrangement is to collaborate with a contract research organization (CRO) holding a pharmaceutical dealer license or with another local dealer. In such cases, the Global Sponsor and Local Sponsor may separately allocate internal liabilities via a contract. Mainland pharmaceutical companies must also adopt this model when conducting clinical trials in Taiwan. Clinical trial applicants, MA applicants/holders and distributors do not need to be the same pharmaceutical company; there is a requirement that there are adequate authorization arrangements in place during the handover at different stages. However, for mainland pharmaceutical companies, it is usually planned for the same company to undertake these roles.
The processing and cross-border transfer of subject data must comply with the Personal Data Protection Act (PDPA) and other rules such as the Restrictions on the International Transfer of Personal Data to Chinese mainland Hong Kong and Macao by Western Pharmaceutical Wholesale and Retail Businesses. These requirements include specifying in the informed consent form the purpose and scope of the personal data collection, the destination of the data transfer, the processing and utilization methods of the clinical trial data and the security management measures for storage equipment. Parties must also, via contract or other appropriate measures, require institutions in Chinese mainland, Hong Kong or Macao to ensure their processing and use of trial-related personal data conform to Taiwan’s PDPA. Under the Human Subjects Research Act, providing non-delinked research materials (including human specimens, individual data and related information) to specific foreign research projects requires informing subjects and obtaining their written consent. The foreign research executing institution must also submit an affidavit guaranteeing compliance with the Taiwanese regulations and the permitted scope of use, which must then be reviewed and approved by the IRB and authorized by the MOHW before implementation.
Regarding the applicability of mainland clinical data in Taiwan, in 2010, the cross-strait authorities executed the Cross-Strait Agreement on Health and Medical Cooperation, agreeing to exchange regulatory standards across non-clinical testing, clinical trials, pre-market evaluation, manufacturing management and post-market surveillance. However, subsequent implementation has been limited, and no routine mutual data recognition mechanism currently exists. Consequently, mainland data is currently evaluated and reviewed on a case-by-case basis, similar to standard foreign clinical trial data. Pursuant to the Regulations for the Registration of Medicinal Products, applicants may apply for a Bridging Study Assessment (BSA) by submitting comprehensive clinical data—preferably including East Asian ethnic data—to determine whether local clinical trials in Taiwan can be waived or if a bridging study is required.
Drug Registration and National Health Insurance Listing
The procedures, required documentation and timelines for drug registration vary depending on whether the product is a new or generic drug. Specific detailed rules also govern biologics, active pharmaceutical ingredients (APIs), radiopharmaceuticals, traditional Chinese medicines and biosimilars. The Regenerative Medicine Formulations Act, effective since January 1, 2026, serves as a special law to the PAA, establishing specific provisions for gene therapy, cell therapy, tissue-engineered formulations and combination products thereof. Upon completion of the drug registration process, the TFDA issues a drug license. As previously noted, applications for all these MAs must be submitted by Taiwanese pharmaceutical dealers.
In brief, prior to commercialization, a new drug must undergo a registration review by the TFDA, with technical evaluations conducted by the CDE. Applicants must submit quality, non-clinical and clinical dossiers complying with the Common Technical Document (CTD) format requirements. Taiwan also recognizes the Ten Advanced Medical Countries mechanism (comprising Germany, the United States, the United Kingdom, France, Japan, Switzerland, Canada, Australia, Belgium and Sweden). If a product has received a MA in these designated countries and provides a Certificate of Pharmaceutical Product (CPP), it may qualify for simplified or accelerated review pathways. Because Chinese mainland is not among the ten designated countries, products relying solely on mainland approvals cannot access these streamlined pathways. Generic drugs are generally required to provide bioequivalence (BE) or bioavailability (BA) and clinical data, whereas biosimilars must complete comparative studies against the reference product.
Generally, after an application for a new drug is submitted, the TFDA conducts a data classification and case assignment, followed by a ‘Filing Meeting’ (formality review), a ‘Review Meeting’ (substantive review), consultation committee discussions, label review and finally, ‘approval and case closure’. For generic drugs, the process involves data classification and case assignment, administrative and technical data review, and requests for additional documents from the manufacturer as needed, and concludes with approval and case closure. The table published by the TFDA states that the review period for the registration of a new drug is 300 calendar days, and for the registration of a generic drug, 180 calendar days. However, in practice, the timeline often extends depending on the specifics of each case.
MAs are split into import and manufacturing licenses. For import licenses, overseas manufacturing facilities must pass TFDA’s GMP inspections (either via a documentary review or an on-site audit). Taiwan is a member of the Pharmaceutical Inspection Co-operation Scheme (PIC/S); hence, manufacturing must comply with PIC/S GMP, and importation and distribution must adhere to Good Distribution Practice (GDP), keeping regulatory standards internationally aligned. Because Taiwan regulates mainland goods under a positive list system, finished drug formulations manufactured in Chinese mainland are, in principle, currently not permitted for importation. Consequently, if collaborating via finished product importation, mainland pharmaceutical companies must arrange manufacturing facilities outside of Chinese mainland, such as third-country contract manufacturing organizations (CMOs).
For manufacturing licenses, if manufacturing is outsourced to Taiwanese pharmaceutical plants, both parties must stipulate the details regarding technology transfers, process validations and contract manufacturing registrations. Many Taiwanese plants simultaneously hold both dealer and manufacturing licenses, potentially serving as one-stop partners for mainland pharmaceutical companies. Regarding APIs, certain mainland-produced APIs are conditionally eligible for importation, distinct from the restrictions on finished formulations. Feasibility must be confirmed item-by-item based on the public notices issued by the International Trade Administration under the Ministry of Economic Affairs.
The transfer of a MA requires a joint application by both the existing and the new MA holders. If a mainland enterprise seeks to replace its local partner but the existing holder refuses to cooperate in transferring the MA, the incoming partner may need to reapply for a new MA from scratch. If the original product was an approved new drug, the newly applied license would have to be filed via the generic drug pathway, which may disrupt subsequent market strategies.
Taiwan implemented its pharmaceutical patent linkage system in 2019. Brand-name drug companies must list patents, while applicants for generic drugs and biosimilars must submit patent declarations against the listed patents upon application. If a patent challenge is raised, the brand-name manufacturer may initiate patent linkage litigation; during the resulting 12-month stay of issuance of the generic MA, the challenging generic applicant that successfully defends its position may obtain a 12-month market exclusivity period.
Taiwan’s National Health Insurance (NHI) is a universal social insurance system administered by the National Health Insurance Administration (NHIA). After obtaining the MA, a separate application must be submitted to the NHIA for inclusion in the NHI coverage in order to enter the NHI market. The NHIA determines whether to include specific drugs in the NHI reimbursement formulary and establishes reimbursement drug prices. Reimbursement listing applications must be submitted by the MA holder, during which the CDE may conduct HTA evaluations. The NHIA may also adjust reimbursement prices annually based on patent expirations, drug price surveys and related regulations, with prices generally trending downward. During initial listing and pricing negotiations, if a drug poses a significant financial impact on the NHI budget, the NHIA may negotiate Price-Volume Agreements (PVA) and Managed Entry Agreements (MEA) with the MA holder to control expenditure. Because Taiwanese NHI reimbursement prices are publicly disclosed and referenced by other international health authorities, local MA holders negotiating prices with the NHIA typically maintain close communication with overseas brand owners to understand their pricing thresholds.
Commercialization Models and Key Considerations
Prescription drug sales in Taiwan are heavily concentrated in medical centers and regional hospitals. Inclusion in hospital formularies requires a review by each institution’s pharmacy committee and involves procurement price negotiations. Therefore, commercialization in Taiwan centers primarily on hospital market access and product promotion through academic and educational exchanges with healthcare professionals.
Consequently, foreign enterprises without local subsidiaries or branches typically adopt distribution or licensing models to promote products efficiently. Furthermore, as noted, if mainland capital exercises de facto control over Taiwanese partners via contracts or other mechanisms, it may fall under Taiwan’s inward investment restrictions. Under a Contract Services Organization (CSO) model-where the principal directs business strategies while the agent merely executes-the arrangement is more vulnerable to being characterized as a mainland entity exerting de facto control over a Taiwanese dealer. While this assessment ultimately depends on the specific contractual clauses, feasible operational room for adopting a CSO model remains comparatively constrained.
Under the current geopolitical and regulatory conditions, mainland-invested pharmaceutical companies seeking to enter the Taiwan market must identify suitable Taiwanese pharmaceutical distributors and establish reliable manufacturing sources outside of Chinese mainland to forge a viable collaborative pathway.
