National Taiwan University Hospital and National Cheng Kung University Hospital were complained for inviting bids for procurement of drugs in violation of the Fair Trade Law
Chinese Taipei
Case:
National Taiwan University Hospital and National Cheng Kung University Hospital were complained for inviting bids for procurement of drugs in violation of the Fair Trade Law
Key Words:
Bio-availability/ Bio-equivalency tests (BA/BE), Department of Health, emergency drugs, generic drugs
Reference:
The Fair Trade Commission Decision of January 7, 1998 (the 323rd Commission Meeting); Letters (85) Kung Erh Tzu No. 8512668, (85) Kung Erh Tzu No. 8513310, and (86) Kung Erh Tzu No. 8600444
Industry:
Hospital (8231)
Relevant Laws:
Article 19(ii) of the Fair Trade Law
Summary:
Case number 8601, another drug procurement program undertaken by NTU Hospital, involved 831 different items of medicines. Although no brandnames were specified and the invitation for bids was announced by public notice stating the drug composition, the bidders qualification criteria, as contained in the bid guidelines, stipulated that the drugs proposed by the bidder should be reviewed and approved by the hospitals drug administration committee before being allowed to participate in the tender. A strict set of NTU Hospital Application Guidelines for Incoming Drugs and Clinical Tests was also formulated, restricting procurement of drugs.
The NTU Hospital drug administration committee has always been strict in reviewing procurement of drugs. Since such procurements were relevant to the management of drugs in the hospital, NTU Hospital used only one brandname for drugs with the same composition, dosage, and preparation. Only suppliers of drugs currently used by NTU Hospital possessed tender permits, where the use of each permit was limited to one specific drug type. Due to the strict clinical trials on incoming drugs conducted by NTU Hospital, and the unwillingness of the hospital doctors to conduct clinical trials on generic drugs, it was difficult for drugs of other brandnames not used by NTU Hospital, despite being certified by the Department of Health and having completed the BA/BE tests (bio-availability ratio / bio-equivalence tests), to pass the drug administration review and receive tender permits under the drug procurement guidelines set by NTU Hospital.
In a separate case, a complaint was also filed against National Cheng Kung University Hospital (hereafter NCKU Hospital) for allegedly specifying brandnames for most of the drug items in its invitation for bids for the procurement of drugs in 1996.
Theoretically, the BE tested generic drugs are not required to undergo clinical trials for incoming drugs. Should a medical institution find it necessary to conduct clinical trials on BA/BE-tested generic drugs, the length of the trial period should be determined after the drug administration committee of the institution has decided to use the generic drug and has determined that such tests are necessitated by clinical use.
In 1996, NTU Hospital purchased NT$2.29 billion worth of drugs, which was about 4.45% of the total market and 6.85% of the market for hospital drugs. Despite being a small percentage of the total market, the use of drugs in NTU Hospital had a great influence on the domestic drug market since NTUs status as an indicator for domestic hospitals.
In relation to this case, both the NTU and NCKU hospitals required that clinical trials be conducted. Although the Department of Health deemed it unnecessary to conduct further clinical trials on BA/BE-tested generic drugs, the clinical trials conducted by the two institutions were not designed solely for BA/BE-tested generic drugs; the trials were also conducted for the registration of new drugs.
In addition, since drugs are relevant in determining the quality of medical treatment, drugs cannot be treated in the same manner as consumer goods. This is especially true for emergency drugs such as cardiovascular drugs, anti-hypertensive preparations, anti-convulsants, anti-coagulants, broncodilators, and different kinds of hormonal preparations. A slight variation in dosage can have enormous effects on treatment results or toxicity production.
The quality of drug manufacturing technology in Chinese Taipei is inconsistent. Previously, generic drugs approved for commercialization by the Department of Health were not required to pass BA/BE tests; clinical trials for incoming drugs conducted by medical institutions were thus necessary. Therefore, it was inappropriate to consider NTU and NCKU hospitals act of requiring clinical trials be conducted as without due cause and in violation of Article 19(ii) of the Fair Trade Law.
However, the clinical trials conducted by the medical institutes have obstructed the entry of BA/BE-tested generic drugs into the market. In the future, medical institutes should not require BA/BE-tested generic drugs to undergo clinical trials; otherwise, such act shall be deemed in violation of Article 19(ii) of the Fair Trade Law.
If the medical institutions find it necessary to conduct further clinical trials on BA/BE-tested emergency drugs, the length of the trial period should be determined after an application has been filed by the drug supplier and after the drug administration committee has decided that the trials are necessitated by clinical use. In this situation, the preceding paragraph does not apply.
Summarized by Wang, Hung-hsuan
Supervised by Lee, Yen-hsi