Vietnam should increase pharma IPR protection

Improved IPR protection is good for drawing in capital to the pharma sector-Photo: Le Toan

According to EuroCham’s Pharma Group, which represents 23 members worldwide, strong intellectual property rights (IPR) protection and enforcement provides essential incentives for investment in the bio-pharmaceutical sector, and in all innovative industries.

“We believe that IPR protection is good for investment. For Vietnam to grow economically, a legal environment that protects intellectual property is critical,” Jan Rask Christensen, senior director of EuroCham’s Pharma Group, told VIR.

“Disrespect of IPR or arbitrarily revoking patents sends the wrong signals to all industries and investors by making them doubt the commitment of a government to the rule of law,” he said.

A recent analysis made by the Global IP Centre shows that a 1 per cent increase in the patent rights index leads to nearly 3 per cent increase in foreign trade investment.

“If Vietnam were to adopt improved patent protection and ensure proper enforcement, it would not only enhance its healthcare system but also create a more predictable environment for investment and promote Vietnamese access to high-quality, safe and innovative medicines,” Christensen said.

According to the Pharma Group, the bio-pharmaceutical industry has the highest level of investment in research and development (R&D) globally at 14.4 per cent of revenue in 2013. It averages $2.6 billion for a drug to go from R&D to patient use. Bio-pharmaceutical firms invest 12 times more in R&D per employee when compared to the average of all other manufacturing industries. However, just two of every ten marketed medicines achieve returns that match or exceed average R&D costs.

Also according to the group, the Ministry of Health (MoH) and other government institutions have made a big effort to improve the healthcare landscape, this has been proven by a number of positive changes in the new pharmacy regulations.

The new Law on Pharmacy, to take effect from January 1, 2017, has some amendments related to pharmaceutical practice, pharmaceutical sale, pharmaceutical registration and clinical medical testing, which is considered the biggest concern among foreign drug firms operating in the country.

“The new law aims to solve problems in drug production and business, as well as meeting the development demand amid increasing global integration, thus helping improve patient access to medicines and give a boost to the industry development,” said Truong Quoc Cuong, head of the MoH’s Drug Administration of Vietnam.

The Pharma Group recommends the full and complete implementation of Vietnam’s existing World Trade Organization commitments, allowing foreign investors to establish foreign invested enterprises in the pharmaceutical industry.

In addition, they hope that adequate commitments, leading to the full liberalisation of distribution services, shall be made in the EU-Vietnam Free Trade Agreement and the Trans-Pacific Partnership. This would create a level playing field with other economic agents and ensure enhanced access to high-quality, safe, and innovative medicines. Furthermore, this would help improve health in Vietnam, and gear local industry for increased exports, which can help pay for future healthcare expenditures.