These Regulations are adopted pursuant to Article 41, paragraph 2 of the Pharmaceuticals Affairs Act.

The term "pharmaceutical" as used in these Regulations refers to the drugs and medical devices specified in the Pharmaceutical Affairs Act.

The recipients of incentive rewards under these Regulations are domestic pharmaceutical manufacturers, and any natural persons, juristic persons, agencies, or organizations that conduct research and development of pharmaceuticals with results that meet the qualifications for incentive rewards under these Regulations.

The qualifications for incentive rewards under these Regulations are as follows:
1. Having independently developed in Taiwan a newly invented pharmaceutical for which a patent has been obtained in Taiwan or abroad and which had its first market launch in Taiwan or another advanced country.
2. Having obtained domestic or foreign patent licensing for a newly invented pharmaceutical that was developed in Taiwan, and the product that is produced received its first approval or market launch in Taiwan or another advanced country.
3. Having obtained a patent or patent licensing in Taiwan or abroad for a pharmaceutical developed in Taiwan but not yet launched on the market and that has been approved for clinical trials in Taiwan or abroad and has shown concrete efficacy. (Respective applications for incentive rewards may be submitted for each of phases I, II, and III of human clinical trials.)
4. Having developed or manufactured a pharmaceutical in Taiwan that has shown important and concrete performance in the market.
5. Having developed or manufactured a pharmaceutical in Taiwan that has been patented in Taiwan or abroad as an improvement over prior art and that has made a concrete contribution to the development of the pharmaceutical manufacturing industry.
6. Having developed or manufactured a new active pharmaceutical ingredient, excipient, medical device material, or part or component in Taiwan that has made a significant contribution to improving the pharmaceutical manufacturing industry in Taiwan.
7. Having introduced advanced technology from abroad, which, in the area of research and manufacture of biopharmaceuticals, has made a significant contribution to medical treatment of illnesses in Taiwan.
8. Having independently developed new equipment or devices, manufacturing processes, or analytical and testing methods in Taiwan which have had a major effect in improving pharmaceutical manufacturing or testing techniques.
9. Having shown outstanding performance in promoting development of the pharmaceutical manufacturing industry in Taiwan in cooperation with the policies of the central competent authorities for health or industry, to raise the standards of medicament research and development.

A Review Committee for pharmaceutical Research and Development ("Review Committee") shall be formed to review applications for incentive rewards submitted pursuant to these Regulations.
The Review Committee shall have 9 to 13 members, which shall be jointly selected by the central competent health authority, the central competent industrial authority, representatives from technology industries, academic institutions, and the industrial sector, and related academicians.
The members shall elect from among themselves a chairperson for the Review Committee.
Positions on the Review Committee are not paid positions.
The tasks of the Review Committee are as follows:
1. Reviewing the qualifications of applicants for incentive rewards.
2. Examining each application for an incentive reward.
3. Determining the number of rewards to be issued and the number of reward points.
4. Other matters that must be reviewed by the Review Committee pursuant to these Regulations.

Applications for incentive rewards submitted under these Regulations shall first be reviewed and approved by the Review Committee, after which the rewards will be jointly issued by the central competent health authority and the central competent industry authority.
The review of applications under the preceding paragraph shall be conducted once a year; additional reviews may be conducted if necessary.

A recipient of an incentive reward that has qualified under Article 4 and has been reviewed and approved by the Review Committee may be awarded a certificate of merit or a monetary award. The following standards will be used to calculate reward points, and the amounts of monetary awards will be approved and issued accordingly:
1. An applicant qualifying under Article 4, subparagraph 1: 60 to 100 points.
2. An applicant qualifying under Article 4, subparagraph 2 or 3: 50 to 80 points.
3. An applicant qualifying under any one of subparagraphs 4 to 8 of Article 4: 30 to 70 points.
4. An applicant qualifying under Article 4, subparagraph 9: 20 to 50 points.
The rules for conversion of reward points to monetary amounts shall be prescribed annually by the central competent health authorities and industry authorities.

The funds required for rewards under these Regulations shall be raised from the following sources:
1. Allocations from the budgets formulated yearly by the central competent health authorities and industry authorities.
2. Cash contributions donated by the industrial sector.
3. Donations from private individuals or organizations that are designated for use as incentive rewards under these Regulations.

When two or more applicants make separate applications for incentive rewards for the same invention or research result, the reward shall be granted to the one who applied earliest. When two or more applicants apply jointly for an incentive reward, the reward shall be shared by the joint applicants.

When there is a party that qualifies as a recipient under Article 4, any relevant trade association, society, or other association may recommend that the recipient receive the incentive reward, or may directly submit an application on their behalf to the central competent health authority.

These Regulations shall be enforced from their date of issuance.