Pharma and biotech companies are seeking strategic advantage by leveraging external expertise, facilities, and capabilities through outsourcing. Driven by cost efficiency, outsourcing provides a competitive edge in the pursuit of efficiency, productivity, and profitability.
In the international outsourcing arena, Asian territories have emerged as an attractive option for companies looking to outsource due to the comparatively low manufacturing and labor costs. This is reflected in the Asia-Pacific pharmaceutical contract manufacturing organization market, which — from an estimated value of $55.15 billion in 2024 — is predicted to rise at a compound annual growth rate of 8.74% to reach $83.85 billion by 2029.
Taiwan has stuck out as an attractive outsourcing option with competitive advantages. Backed by significant investment into the pharma and biotechnology sectors over the past two decades, Taiwan offers a robust import and export infrastructure, skilled workforce and talent pool, commitment to quality and cost-efficiency.
Taiwan as an outsourcing partner
Taiwan has already established itself as a premier developer, manufacturer, and outsourcing partner, with a rich background in information communication and technology (ICT).
An example is Taiwan’s history in the semiconductor industry, with the Taiwan Semiconductor Manufacturing Company (TSMC) producing chips such as those used in phones and computers for Apple, Qualcomm, Nvidia and AMD. The advances in this high-tech industry were propelled by the formation of world-class industrial clusters, which began with the Hsinchu Science Park. This park is now one of the leading hubs in semiconductor development and manufacturing.
With current investments aiming to help transform the biomedical sector — made up of biotechnology, pharmaceuticals and medical devices — Taiwan aims to replicate its success in the semiconductor sector and gain renown as a global leader in biomedical development, manufacturing and outsourcing.
Investment to the biomedical sector
Taiwan is investing significantly and leveraging its semiconductor and manufacturing landscape to drive the biomedical sector forward. The government’s “5+2” Innovative Industries Plan aims to promote innovative sectors. Originally highlighting five major innovative industries, the initiative was then expanded to include two additional areas. Among the target industries, the biomedical sector has been named as one of the top priorities.
From this, significant investment has been made into the sector, and Taiwan’s biomedical industry is already experiencing growth, reaching $23.79 billion in revenue at a growth of approximately 17.1% since 2020.
Current industry trends are seeing a move toward biologics as treatments for rare and chronic disease indications — such as antibody-based therapeutics and cell and gene therapies — which means investing in biotechnology is particularly important. Investment in biotechnology in Taiwan traces back to 1984 when the Development Centre for Biotechnology (DCB) was established to transform Taiwan’s biotech industry.
Since then, the government has implemented incentives and initiatives to drive the healthcare sector forward. Revision of the Legislative Yuan Biotech and the addition of a third category — biomedical technology — to the New Drug Development Act means incentives such as tax rebates are now provided for new drugs, advanced medical devices and new biomedical technology, including precision medicine and cell and gene therapy. With these and other investments made to date, as of 2022, over 170 companies were certified as biotechs, with 453 items having undergone approval, 73 of which were approved both domestically and internationally.
Although industrial hubs are still under development, the government recognizes their power to promote innovative thinking, ease collaboration between leading companies and help create a robust supply chain. Accomplishments to date include the launch of the National Biotechnology Park in 2018.
Regulatory evolution
In recent years, Taiwan has made significant advances in aligning its regulatory landscape with that of the US and Europe. This move aims to ensure that Taiwanese-made drug products meet the high standards of quality, efficacy and safety of those regions. This will not only allow Taiwan to seamlessly deliver drug products to diverse patient populations but also provide a competitive edge in the global pharmaceutical market.
Responsible for ensuring that food, drugs and medical devices meet quality and safety standards with international harmony, the Taiwan Food and Drug Administration (TFDA) — Taiwan’s equivalent to the U.S. FDA — was established in 2010 following the TFDA Organization Act in 2009. The TFDA was formed by integrating the Bureau of Food Safety, the Bureau of Pharmaceutical Affairs, the Bureau of Food and Drug Analysis and the Bureau of Controlled Drugs.
One notable change when the TFDA was established was the transfer of regulations for cell and gene therapies from the Ministry of Health and Welfare (MOHW) to the TFDA. This move recognizes these innovative therapies as medicinal products rather than a new medical practice, opening new avenues for research and development.
The European Commission (EC) has listed Taiwan as having equivalent regulatory standards for active pharmaceutical ingredients (APIs), meeting the required EU quality and good manufacturing practices .
With these internationally robust regulations in place, companies can transfer mid-phase trials completed in Taiwan to phase 3 studies in the US or EU. As of 2017, 225 drugs developed by Taiwan-based companies were undergoing clinical trials, more than 115 of which already received IND approval from the U.S. FDA. For the Centre for Drug Evaluation (CDE) and TFDA, promoting international collaboration remains a priority. The aim of globalizing Taiwanese regulations is propelling these joint efforts.
Understanding the advantages
Forging a partnership with a Taiwanese company offers a myriad of advantages that can accelerate the journey to market. These benefits include:
Import and export efficiency and speed
As a net exporter, Taiwan has built strong global relationships over the decades. This experience has helped to establish rigorous import and export practices, meaning goods can be seamlessly transported with efficiency and speed. During the COVID-19 pandemic, this global reach was tested with restrictions enforced to minimize the movement between borders. However, with established relationships in place, Taiwan was able to recover quickly to reinstate robust import and export practices.
For contract development and manufacturing organizations (CDMOs) based in Taiwan, these optimized processes mean they can promptly receive raw materials and effectively deliver products. With global reach, these CDMOs have an in-depth understanding of rules and regulations worldwide and have formed strong relationships with regulators, meaning products can be efficiently delivered to global patient populations.
The strong culture and ethos of Taiwanese companies
Taiwanese companies are built on a strong foundation of company culture, fostering fierce loyalty among their staff, resulting in low turnover rates and team continuity. As a result, teams are well established, with expertise that can be leveraged to efficiently deliver complex and multidisciplinary projects and meet customer demands.
This strong company culture also means businesses don’t have to consider replacing valuable staff members. Therefore, there isn’t a need for re-training to fill positions to ensure a consistent level of quality is retained. With company growth, new talent can still be added to teams, expanding expertise and experience without compromising working practices.
Extending this team mindset to customers helps foster strong relationships to ensure that demands are effectively communicated, understood and executed efficiently.
A highly educated talent pool
Taiwan boasts a highly educated and talented workforce, completing projects with well-established expertise. The region’s significant investment in education and training has resulted in skilled individuals. Many professionals have also pursued higher education overseas, contributing dual language skills and a global perspective. This competitive advantage enables Taiwanese companies to navigate international markets effectively, providing an invaluable edge in today’s interconnected business landscape.
The Taiwanese government also aims to attract international talent to help drive innovative thinking. Having established industrial hubs can be a driver to help attract accomplished individuals. Recent tax incentives and an adapted immigration process also aim to encourage more talented internationals to work in Taiwan to help establish the country as a global player.
Dedication to meeting rigorous quality standards
As illustrated by its rigorous regulations, Taiwan adheres to strict regulatory standards in line with other regulatory bodies, such as those in the EU and US markets. As part of this, individual CDMOs have strict practices in place to ensure that they meet these regulations, with regular inspections carried out by the TFDA, along with qualified person (QP) and customer audits to verify compliance.
Cost advantages of working with a partner in Taiwan
Taiwan has a lower-cost economy than the US and the EU, meaning that the development and manufacture of drug products can be completed at a lower cost. This advantage stems from reduced labor costs, promoting cost-efficiency for customers without compromising product quality and efficacy.
The benefits and reliability of Taiwanese CDMOs have resulted in repeat outsourcing. Customers often return to complete multiple projects with these companies in Taiwan due to their proven track record and ability to deliver. This includes follow-on pipeline programs and the continuous delivery of batches. The repeat business is a result of effective execution, on-time delivery, stringent quality systems and cost advantages.
Looking to the future
By establishing industrial hubs, changing regulations, and supporting outsourcing, Taiwan is solidifying its position as a global player in the outsourcing space. Taiwanese CDMOs are helping companies reach their full potential and produce safe and efficacious drug products to improve patient lives. The continued investment in the country’s pharmaceutical and biomedical infrastructure means outsourcing to Taiwan will only continue to grow.
