It is hardly any secret that vitamin prices in Taiwan are overinflated. A visit to any pharmacy or specialty outlet, like Watsons or GNC, reveals international and local brands selling for prices that bear no semblance to economic reality. Understandably this has given rise to claims of collusion and cartel-like behavior by importers and manufacturers as the government looks on.
Many lay the blame for these head-spinning prices squarely at the feet of the Department of Health and its policy of classifying vitamins as medicine. Over the past few years, the Consumers’ Foundation has been one of the most vociferous critics of the DOH, repeatedly accusing it in the press of creating this situation—inadvertently or otherwise.
The foundation claims that through maintaining an antiquated policy of classifying vitamins as medicine instead of food, the DOH has given manufacturers a “nudge nudge, wink wink” approval to drive retail prices up by almost four times those paid in the U.S. But the DOH counters that in categorizing vitamins this way, the products remain tariff-free and any pricing issues lie outside its area of responsibility.
The DOH has consistently stated that it does not set vitamin prices. It has also claimed that the policy of classifying vitamins as medicine is carried out in many parts of the world. Although the DOH never named names, suffice it to say these did not include countries where vitamins are consumed in quantities on par with those in Taiwan. North Korea anyone?
Taiwanese love vitamins. Over 55 percent of adults take supplements, according to a survey released last month by The Nielsen Co., a leading marketing and media firm. This ranks the nation alongside the U.S. at No. 3, behind Lithuania, and the Philippines and Thailand in first spot.
Sales over the last decade have been growing steadily. But this year, as more people are taking health into their own hands, perhaps hoping to save on medical costs and unnecessary trips to the doctor, vitamin sales are expected to grow by around 11 percent to NT$84 billion (US$2.62 billion), according to industry data.
There is little doubt that Taiwan’s vitamin market is a highly lucrative but captive one. The Department of Customs Administration under the Ministry of Finance does a fine job in slapping heavy taxes on mail order shipments and cracking down on illegal imports. This extraordinary vigilance translates into fatter bottom lines for importers and manufacturers.
So why then did the DOH risk upsetting the apple cart by suddenly announcing plans last October to change its classification of vitamins from medicine to food?
At the time, the DOH volte-face was heralded as a victory for the people, but upon closer inspection, there were far less pure forces at work. The decision was the result of Kuomintang legislators threatening to stall the DOH’s budget submission unless it respected a previous Taiwan High Court ruling finding its vitamin classification policy without legal basis.
The DOH quickly caved, announcing it would begin classifying low-dose vitamins as food at some point in the future. Importers and manufacturers were given a generous 12 to 18 months to sell off their stocks at current prices while the DOH set about reviewing 380 kinds of vitamins available in the local market.
For consumers, it seemed as if the era of overcharging was at an end. Soon they would be able to purchase vitamins at prices on par with those in Western countries. But sadly, they were mistaken.
What everyone should have paid more attention to at the time was the seeming good grace with which Taiwan’s big vitamin importers and manufacturers greeted the DOH decision. Pfizer Inc., which produces the popular Centrum brand, said its Taiwan subsidiary would only discuss pricing issues once the DOH had completed its review and had firmly settled on a policy. Bayer Consumer Care, which manufactures Supradyn, cryptically stated that it would take a “wait and see” approach to developments.
Although the DOH has made all the right noises about changing its classification of vitamins from medicine to food—implying prices will come down—no runs have been put on the board. Rumors abound that the new classification system will be unveiled April 30, 2012, just after the presidential election set down for March that year.
For those health-conscious consumers expecting a little post-election hip-pocket relief, think again. The DOH reclassification of low-dose vitamins clears the way for additional taxes of 30 percent, much in the same fashion as imported food products. Revealingly, a number of pharmaceutical companies have even stated that the market, not the DOH classification system, will determine future prices.
With the vitamins’ pricing morass no closer to being sorted out, and even a possible increase in the works, local consumers appear to have been well and truly fed to the wolves. If the Ma Ying-jeou administration is as committed to the principles of good governance as it claims to be, then the DOH must come clean on why the prices of vitamins in Taiwan are considerably higher than those products sold overseas. Adding a long overdue dose of transparency to the vitamin market would be a healthy start.
—Jean Brisebois is a freelance writer based in Quebec City, Canada. These views are the author’s and not necessarily those of Taiwan Today. Copyright © 2010 by Jean Brisebois
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