Amending legal documents to better control drug prices

In recent years, the consumer price index (CPI) over the same period last year of drugs and medical services increased at a low rate and much lower than the general CPI (see top Figure).

Nguyen Thi Lien Huong - Deputy Minister of Health

Through bidding, centralised bidding, and drug price negotiation, money is saved for the health insurance fund. According to a report from the National Centre for Centralised Drug Procurement, in 2022, the total value of winning drugs bids decreased by 17.98 per cent (a decrease of $61.74 million compared to the planned price), helping control drug prices at health facilities closely and consistently among localities. Some drug prices are consistent across the country.

The price of brand-name drugs in Vietnam is among the lowest in ASEAN in almost all major therapeutic drug groups.

For example, the cardiovascular drug group is 90 per cent lower than Indonesia and 146 per cent lower than Thailand. For drugs for cancer treatment, it is 76 per cent lower than Thailand and around 50 per cent lower than both Indonesia and the Philippines.

The proportion of using brand-name drugs at health facilities in Vietnam is 11 per cent, lower than Malaysia (36 per cent), Thailand (21 per cent), and the Philippines (21 per cent), according to the IQVIA MIDAS data.

On the other hand, the implementation of preferential regulations in drug purchase in the Law on Public Procurement and a 2019 circular has helped increase the rate of domestic drug use at health establishments year-by-year, and this rate is higher at provincial and district-level health facilities (see middle Figure).

Through preliminary review and following the process of receiving, reviewing, and announcing on the online public service system, declared drug prices are controlled, and there is no sudden price increase.

Declared drug prices and winning drug bids at medical facilities are publicly announced on the website of the Drug Administration of Vietnam under the Ministry of Health (MoH) as reference for units in the process of formulating planned prices in their contractor selection plans. Specifically, the total number of drugs with declared prices announced by the end of 2022 was 65,452, an increase of 5,980 compared to 2019 (see bottom Figure).

The MoH will implement some measures to manage drug prices on the basis of respecting the right of enterprises to self-price. It is also based on competition of organisations and individuals trading drugs under the market mechanism, according to the provisions of law, and protection of the legitimate rights and interests of organisations, individual businesses, and consumers.

The MoH will amend and supplement legal documents related to drug price management to overcome inadequacies and to suit the actual situation. It also proposes amendments of the provisions of the LoP towards focusing on drug price management (declaring and re-declaring prices) for branded drugs, referenced biological products, and drugs with little competition or at risk of monopoly.

It will also continue to implement synchronously drug price management measures specified in the pharmacy law on declaring prices, bidding, and listing and publicising drug price information.

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