Pharmaceutical data exclusivity is a critical issue to both multi-national and domestic local pharmaceutical companies due to huge competitive market potential interest. In 2009 and 2010 White Paper released by American Chamber of Commerce in Taiwan (AmCham), AmCham explicitely recommends Taiwan Authority to amend Pharmaceutical Affair Act to protect the interlectural property right, data exclusivity, of pharmaceutical new indication. In responce to this request, Department of Health has amended Article 54, Sec.3 of Guidance of Pharmaceutical Registration and Approval on December 9, 2010 to reiterate Pharmaceutical Affair Notification 87041668 issued on July 17, 1998. It states that the second pharmaceutical firm who applies same active ingredient, same dosage form and dosage should, in addition to all the reguired relevent documentation, submit the same standard clinical trial report as the first approved new-indication applicant with execution of local clinical trial under the new drug surveilence period (7 years after licencing). After examing the comparatory relevent international law and the concept of upper law with superior priority, the authors have come to the conclusion that the above regulation infringes Article 40-2 of Pharmaceutical Act and becomes invalid. If indeed the State wants to grant the data exclusivity protection for pharmaceutical new indication, we recommend to officially amend the Pharmaceutical Act to comply with the judiciary due process. As for the appropriate protection terms and period, the authors recommend to grant 2-year protection time with execution of local clinical trial to balance the interests between pharmaceutical industry development and the general public.