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Taiwan’s medical device product scope is huge – it ranges from simple items such as syringes and rubber gloves to highly sophisticated and extremely expensive equipment.
To understand the make-up of the highly diverse medical devices industry, visualise a pyramid cut horizontally into three sections. At the top are the precision, technologically advanced products dominated by the world's leading brands. In Taiwan the majority of these high-value items for medical treatment and diagnosis are imported from the US and Europe.
The bottom slice of the pyramid represents commodity products that are mass produced at relatively low unit prices. Examples include disposable syringes, surgical and medical examination gloves, and even conventional wheelchairs. Taiwan's domestic medical device industry once excelled in this portion of the market, but in recent years the pursuit of lower labour costs has caused most of the production to shift to China, though the business there remains largely in the hands of Taiwan-invested companies.
The middle ground is where Taiwan sees its future as a production base in this industry. Its manufacturers may never be able to make it into the top tier produce line, where the R&D and marketing costs are enormous, but they are expected to enjoy growing success in making good-quality products that demand a moderately high level of technical capability and are not extremely labour-intensive to produce. A wide range of medical devices, including many types of equipment and instruments used in hospital operating rooms and intensive-care units, fall within this category.
That promising potential for development has prompted the Taiwan Government to list medical devices among the ‘strategic industries’ it has earmarked as worthy of promotion. By 2006, government projections call for the industry's production value to climb to US$1.9 billion, roughly double the level of 2002. (Even the current numbers, however, are only ballpark figures. Those knowledgeable about the industry say that the huge variety of products that could be considered medical devices makes an accurate count virtually impossible.)
Historically, around 70 per cent of Taiwan-made medical devices have been sold overseas, and given the relatively small scale of the domestic market, that export orientation is expected to become even more pronounced as the industry further matures. George Lee, chairman of the Taiwan Medical & Biotech Devices Industry Association, estimates that well over half of current exports are on an OEM basis.
Sometimes products shipped to overseas buyers are even re-imported into Taiwan bearing the foreign brand. Only a small number of domestic manufacturers in this field have made much headway in gaining market acceptance abroad for their own brands.
The imported high performance electro-diagnostic equipments well accepted by local public and private hospitals are as follows:
- Cardiovascular equipment
- Electroencephalographs
- Computerised tomography
- Ultrasonic scanning apparatus
- Magnetic resonance imaging apparatus
- Ultra-violet or infra-red ray apparatus
- Artificial kidney (dialysis) apparatus
- Other therapeutic respiration apparatus
- Artificial joints
- Hip prosthesis, plates, nails, bone screws, bone cement
- Other apparatus based on the use of X-rays, for medical surgical or veterinary uses
- Cobalt 60 tele-therapy apparatus
The overall statistics of the medical device industry in Taiwan is summarised in the following table.
Overview of medical devices industry in Taiwan:
(unit: NT$100 million)
| |
2005 |
2006 |
| Revenue |
590 |
697 |
| Companies (no.) |
484 |
500 |
| Workforce (persons) |
15,000 |
16,350 |
| Export value |
270 |
293 |
| Import value |
395 |
447 |
| Domestic sales vs. export |
54:46 |
58:42 |
| Domestic market |
715 |
851 |
(Source: Biotechnology and Pharmaceutical Industries Program Office, MOEA)
Export and import of medical device
Taiwan exported NT$6.79 billion worth of medical equipment in the first quarter of 2007, up 10.77 per cent over the level for the same period last year, the growth was due mainly to an increase in export orders, noting that international medical equipment giants have continued to subcontract their orders to counterparts in the Pacific and that demand in emerging markets has continued to increase. Taiwan's main medical equipment exports included vehicles for disabled people, as well as parts and accessories for medical instruments, other equipment for experimental use or medical treatment, and contact lenses.
Taiwan also imported NT$8.52 billion worth of medical equipment in the first quarter, down 0.93 per cent from NT$8.6 billion for the same period last year. Taiwan mainly imported catheters, contact lenses, artificial dialysis equipment, artificial bones, parts and accessories for dentistry and other physiotherapy massager.
The imported medical devices products items, key supply sources and Australian medical devices in Taiwan are presented in the following tables.
Major import items and growth rate: Taiwan major import medical device (product groups) from the world and years comparison.
| |
|
US$
million |
US$
million |
%
share |
%
share |
%
change |
| HS |
Description |
2005 |
2006 |
2005 |
2006 |
06/05 |
|
World |
800.10 |
898.97 |
100 |
100 |
12.36 |
| Group 59 |
Health & medical equip |
800.10 |
898.97 |
100 |
100 |
12.36 |
| 901890 |
Instr & appl F medical surgical dental vet, nesoi |
275.10 |
331.37 |
34.38 |
36.86 |
20.46 |
| 902219 |
Apparatus based on X-ray for other use, ex-medical, etc |
59.35 |
121.18 |
7.42 |
13.48 |
104.18 |
| 901839 |
Med needles nesoi, catheters & parts, etc |
83.84 |
75.83 |
10.48 |
8.44 |
-9.54 |
| 902139 |
Artificial joints/parts, accessories nes |
53.85 |
59.27 |
6.73 |
6.59 |
10.06 |
| 901910 |
Mech-thrpy appl, mssg appr, psych apt-test, appr, pts |
50.20 |
48.62 |
6.27 |
5.41 |
-3.15 |
| 902212 |
Computed tomography apparatus |
24.47 |
28.32 |
3.06 |
3.15 |
15.75 |
| 902129 |
Dental fittings/parts & accessories |
15.92 |
24.61 |
1.99 |
2.74 |
54.55 |
| 901849 |
Inst & appln for dental science, & pts & acc, nesoi |
25.67 |
22.40 |
3.21 |
2.49 |
-12.74 |
| 902214 |
Appts base on X-ray, medical, surgical, vet, nesoi |
25.51 |
18.34 |
3.19 |
2.04 |
-28.11 |
901920
|
Ozone, oxygen, therapy, respiration apparatus, pt |
17.10 |
14.40 |
2.14 |
1.6 |
-15.8 |
(Source: World Trade Atlas)
Major supply source: Taiwan medical devices import countries with year’s comparison
| |
|
US$
million |
US$
million |
%
share |
%
share |
%
change |
| Rank |
Country |
2005 |
2006 |
2005 |
2006 |
06/05 |
|
0 |
World |
800.1024 |
898.9687 |
100 |
100 |
12.36 |
|
1 |
USA |
243.97 |
252.51 |
30.49 |
28.09 |
3.5 |
|
2 |
Japan |
193.35 |
239.39 |
24.17 |
26.63 |
23.81 |
|
3 |
Germany |
95.62 |
98.55 |
11.95 |
10.96 |
3.06 |
|
4 |
Ireland |
38.44 |
42.09 |
4.8 |
4.68 |
9.49 |
|
5 |
China |
35.57 |
41.64 |
4.45 |
4.63 |
17.07 |
|
6 |
Korea, South |
13.31 |
26.24 |
1.66 |
2.92 |
97.05 |
|
7 |
France |
22.51 |
23.48 |
2.81 |
2.61 |
4.31 |
|
8 |
Switzerland |
14.56 |
22.85 |
1.82 |
2.54 |
56.94 |
|
9 |
UK |
17.93 |
20.94 |
2.24 |
2.33 |
16.79 |
|
10 |
Netherlands |
18.16 |
20.84 |
2.27 |
2.32 |
14.76 |
|
11 |
Singapore |
17.51 |
14.55 |
2.19 |
1.62 |
-16.93 |
|
12 |
Israel |
10.07 |
12.78 |
1.26 |
1.42 |
26.87 |
|
13 |
Sweden |
6.86 |
10.61 |
0.86 |
1.18 |
54.71 |
|
14 |
Thailand |
7.97 |
7.71 |
1 |
0.86 |
-3.27 |
|
15 |
Italy |
6.79 |
5.72 |
0.85 |
0.64 |
-15.78 |
|
16 |
Denmark |
5.39 |
5.66 |
0.67 |
0.63 |
4.95 |
|
17 |
Malaysia |
7.09 |
5.47 |
0.89 |
0.61 |
-22.92 |
|
18 |
Costa Rica |
4.14 |
5.46 |
0.52 |
0.61 |
31.74 |
|
19 |
Finland |
4.50 |
5.33 |
0.56 |
0.59 |
18.46 |
|
20 |
Mexico |
2.67 |
4.43 |
0.33 |
0.49 |
65.83 |
|
21 |
Canada |
3.95 |
4.33 |
0.49 |
0.48 |
9.67 |
|
22 |
Puerto Rico (US) |
6.30 |
4.17 |
0.79 |
0.46 |
-33.74 |
|
23 |
Australia |
2.51 |
2.99 |
0.31 |
0.33 |
18.87 |
(Source: Taiwan Directorate General of Customs)
Imported Australian medical devices to Taiwan
| |
|
US$
million |
US$
million |
%
share |
%
share |
%
change |
| HS |
Description |
2005 |
2006 |
2005 |
2006 |
06/05 |
|
Australia |
2.511652 |
2.985663 |
0.31 |
0.33 |
18.87 |
| Group 59 |
Health & medical equip |
2.51 |
2.99 |
100 |
100 |
18.87 |
| 901890 |
Instr & appl F medical surgical dental vet, nesoi |
0.80 |
0.87 |
31.99 |
29.21 |
8.57 |
| 901920 |
Ozone, oxygen, therapy, respiration apparatus, pt |
0.40 |
0.55 |
15.99 |
18.34 |
36.31 |
| 902140 |
Hearing aids |
0.26 |
0.42 |
10.41 |
14.06 |
60.63 |
| 902000 |
Breathing appliances & gas masks nesoi, parts etc |
0.24 |
0.35 |
9.53 |
11.72 |
46.24 |
| 902190 |
Appliances worn, carried, implanted in body & pt nesoi |
0.33 |
0.22 |
12.99 |
7.52 |
-31.18 |
| 901819 |
Electro-diagnostic apparatus Nnsoi & parts, etc |
0.09 |
0.19 |
3.49 |
6.42 |
118.52 |
| 901832 |
Tubular metal needles & needles for sutures & parts |
0.14 |
0.14 |
5.38 |
4.65 |
2.76 |
| 902290 |
X-ray/hi tnsn genr cntr pnl & dsk exm/trtmnt tb pt |
- |
0.07 |
0 |
2.46 |
0 |
| 901839 |
Med needles. nesoi, catheters & parts, etc |
0.04 |
0.07 |
1.59 |
2.2 |
64.48 |
|
901850 |
Other ophthalmic instruments, appliances & parts |
0.12 |
0.06 |
4.7 |
2.08 |
-47.46 |
|
902219 |
Apparatus base on X-ray for other use, ex medical, etc |
- |
0.03 |
0 |
1.16 |
0 |
|
901910 |
Mech-thrpy, appl, mssg appr, psych apt-test, appr, pts |
0.06 |
0.01 |
2.27 |
0.19 |
-90.18 |
(Source: Taiwan Directorate General of Customs)
Taiwan’s medical device market is growing rapidly as the island’s increasingly affluent population has more to spend on healthcare.
Foreign firms supply most of the local demand for advanced equipment. The products from USA and Europe have been recognised by local end-users as technologically superior, of high quality, and more durable.
Australian medical device companies have been successful in some niche segment here in Taiwan. Cochlear’s success in Taiwan did create Australian high quality and innovative perception in the medical device research and development. There exist room for Australian medical device companies to further develop in Taiwan.
The Department of Health (DOH) regulates importation of medical equipment. To market a medical device in Taiwan, the DOH's pre-marketing registration approval must be obtained before the Board of Foreign Trade (BOFT) of the Ministry of Economic Affairs (MOEA) issues an import license.
In addition, medical equipment related to radiology must apply for an import permit showing that it meets requirements of the National Bureau of Standards (NBS) for design and safety. The Nuclear Science Council (NSC) must inspect X-ray and radiation producing equipment after import.
Taiwan is currently in the process of harmonising domestic medical device classification with the commonly used international classification system. In addition, all medical devices will now need to meet the Good Manufacturing Practice (GMP) requirement. GMP is based on ISO 13485.
Good Manufacturing Practice (GMP) requirements
GMP requirements were introduced in February 1999. Newly established factories, and all new applications for pre-market approval, have to comply with GMP. There is a five-year period for those device already registered and on the market when the rule went into effect.
The DOH performs on-site inspection for local manufacturers and reviews quality system documentation provided by foreign manufacturers. Quality System Documentation (QSD) is based on the 20 requirements of GMP (ISO 13485).
The DOH and USFDA signed an Exchange of Letters on January 9, 1998. According to this Exchange of Letters, FDA agrees to provide purged copies of medical device Taiwan upon request. As a result, medical devices manufactured in the US are exempted from being required to submit QSD if all of the following documents are included in a submission to DOH:
- FDA Establishment Inspection Report
- Certificate to Foreign Government
- ISO 13485 Certificate
Therefore, Australian products obtained medical product approval from USFDA, which will shorten the product registration in DOH Taiwan.
The major area of concern to the foreign companies operating in Taiwan is the product registration process conducted by the DOH's Bureau of Pharmaceutical Affairs. Although the rationale for such a system is sound – safeguarding public health by assuring that the medical devices being employed are effective and properly manufactured – foreign companies have long complained about the drawn-out nature of the process. The application process can take one to two years to complete – first you have to get approval for the plant (where the device is made) and then for the product.
Taiwan’s medical device importers source their capital through domestic and foreign commercial banks and supplier credit. Most payments for imported healthcare products are made by letter of credit (L/C) in a foreign currency.
Banks require deposits of 10 per cent, when opening a letter of credit, with balance paid upon arrival of the goods. After developing a satisfactory working relationship with local firms, foreign suppliers may also accept the following methods of payment: documents against payment (DP), or document against acceptance (DA).
Settlement will be made in foreign currency, but the importer, at maturity or at the time of receipt of the goods or relevant shipping documents. |
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