Taiwan Pharmacy Retail Market Overview and Size
Taiwan Pharmacy Retail Market Overview and Size
The Taiwan Pharmacy Retail Market is a growing market. The country has universal coverage of health insurance which covers both western medicines and traditional Chinese medicines. The National Health Insurance provides drug reimbursement in which more than 17,000 prescription drugs are covered. In this model, the customer needs to make small co-payment (in order to avoid the wastage and misuse of drug) and the remaining amount is sponsored by the government. The chain pharmacy stores are increasing their presence by opening new stores and acquiring independent stores or small regional chains. Some pharmacy chains have also adopted the franchise model for store expansion. Pharmacies chains are focusing on selling high margin products such as Maternal and Baby Supplies, Cosmetics, Nutritional Supplements and others in order to increase the profitability of their stores. The Taiwan Pharmacy Retail Market witnessed a revenue growth of 2.8% during 2014-2019.
Taiwan Pharmacy Retail Market Segmentation
By Market Structure: TheTaiwan Pharmacy Retail Market is dominated by the presence of Unorganized Pharmacies in the term of number of stores and market revenue. However, the organized pharmacies have started increasing their presence by opening new stores and acquiring & merging regional chains & independent pharmacies with them. The customers prefer to purchase prescribed medicines from unorganized pharmacies as majority of these pharmacies are accredited by NHI which offers co-payment facility on these drugs. The organized pharmacies use services such as in store services, wide product assortments, special discounts and offers for members and other value added services for attracting customers.
By Region: Taiwan is broadly divided in six regions: Taipei Division, Northern Division, Central Division, Southern Division, KaoPing Division and Eastern Division. Taipei Division has the maximum number of pharmacies (2019), NHI Beneficiaries and NHI Outpatient Medical Benefit Claim (2018). In terms of revenue Taipei Division contributed the maximum revenue, followed by Central Division, whereas Eastern Division contributed the least revenue.
By Type of Sales: Prescribed Medicines were the most selling category in the overall market in 2019. This is mostly due to the demand for maintenance medicines by the ageing population. NHI drug reimbursement program has more than 17,000 prescribed medicines listed on it. Demand for OTC products is increasing in the market as people are moving towards preventive healthcare. The organized pharmacies are focusing on selling more non pharmaceutical products such as maternal care, baby care, cosmetics and other similar products as they help in increasing the store profitability.
By Type of Drug: The pharmacies in Taiwan offer a mix of Patented Medicines and Generic Medicines. The NHIA regulates the pricing of medicines in Taiwan; Patented Drugs are priced at a reference pricing of those medicines in 10 advanced countries. The Generic medicines can be classified in different sub categories such as Brand Generics, Unbranded Generics and others.
By Therapeutic Class: The medicines in the Taiwan Pharmacy Retail Market can be classified in different therapeutic classes such as cardiovascular,pain/analgesics, anti-infective, anti-diabetic, vitamins, minerals and nutrients, respiratory, and others on the basis of the type of disease they are used to cure. The cardiovascular drugs have highest demand in the region due to the ageing population.
Competitive Landscape in the Taiwan Pharmacy Retail Market
The market has a mix of chain and independent pharmacies with majority of pharmacies being independently owned. The top five pharmacy chains on the basis of number of stores are MedFirst, Great Tree Pharmacy, YourChance Pharmacy, Yes Chain Pharmacy and TinTin Drugstores as of 2019. The competition in market is highly fragmented on the basis of revenue. The organized chains are trying to increase their revenue share by offering various services such as integrating stores with latest technologies for better in-store experience, membership services, special promotion offers and discounts, delivery services and other marketing and promotion activities. The main parameters of competition among chains are availability of NHI reimbursed prescribed medicines, wide product variety, availability of non-pharmaceutical products, membership services, loyalty schemes and other services.
Taiwan Pharmacy Retail Market Future Outlook & Projections: The Taiwan Pharmacy Retail Market witnessed a slight decline initially with the onset of Corona Virus Pandemic, however, the market recovered quickly with proactive measures taken by government for stopping the spread of the virus. The pharmacies are expected to have a makeover integrating latest technologies, collecting data for cloud storage and adding other beneficial features. Online Pharmacies will grow in future and the business model will adapt to the hybrid pharmacy. The chain pharmacies will increase their presence in the future by opening new stores or acquiring small independent stores or regional chains. The expenditure on pharmaceuticals is expected to increase as government wants to reduce their expenditure on imported drugs in the country, this will also result in the increase in demand for generic medicines.