International drug price comparison was adopted and implemented by the Bureau of NHI to adjust the drug reimbursement prices in September 1996. The new policy brought substantial impact on both the research- based multinational companies and the generic-based domestic pharmaceutical manufacturers. This study explored the measures of international drug price comparison and compared the price of selected drugs among Taiwan, Australia, United Kingdom and the United States. Empirical analysis of Taiwan's NHI drug pricing indicated that only 35.4% of the compared original brand drugs was priced higher than those in Australia and the United States. The price difference between Australia and Taiwan in comparable items was limited, even though 57.5% of the compared drugs in Taiwan was priced higher. 85.7% of the compared drugs in the United States was pirced higher than those in Taiwan. As for the generic drugs, price comparison was technically difficult because majority of the generic drugs were of Taiwan origins. Approximately 60 % of the 387 compared generic drugs of UK and Australia was priced higher than Taiwan's lowest NHI prices while 30% of the 394 comparable items was priced higher than Taiwan's highest NHI prices. This study also compared the prices of cimetidine 200 mg tablet among the three coun tries. In general, generic drugs in Taiwan are priced lower than their counterparts in the studied countries.