Foreign drugs makers to benefit from rule changes

The new circular is expected to ease administration for the nation’s pharmacy market, Photo: Le Toan

Vu Tuan Cuong, general director of the Ministry of Health’s (MoH) Drug Administration of Vietnam (DAV) made the statement when contacted by VIR at last week’s EuroCham’s Whitebook 2019 launch, where the issue was once again put on the agenda.

“We have finished the drafting of the circular and are waiting for the official issuance,” said Cuong.

“Under the draft circular, which guides the implementation of Decree No.54/2017/ND-CP under the Law on Pharmacy, new and innovative drugs which ensure quality and safety as regulated will be exempted from clinical trials in Vietnam. It also shortens the time of dossier submission and appraisal, while having open regulations on extension of registration numbers,” he added.

Furthermore, in the draft, dossiers of drug registration are built in line with the ASEAN bloc. Importantly, clauses and provisions are also aligned with the EU-Vietnam Free Trade Agreement (EVFTA), including the exemption of clinical trials and technical requirements. The upcoming circular is good news, not only for EU pharmaceutical businesses, but also other multinational corporations who have been waiting patiently for a revamp in drug registration procedures following several concerns.

Vietnam’s pharmaceutical market has emerged as increasingly appealing to overseas investors, given the growing demand for high-quality and accessible healthcare services. The market is forecast to continue to experience two-digit growth rates over the next five years, according market research firm Business Monitor International based in London.

According to statistics from the DAV, domestic-manufacturing medicines only accounts for 48 per cent of the total market, meaning that the majority still depends on imported sources. Moreover, domestic manufacturers are still struggling to produce most of the high-quality and new-developed drugs due to the lack of technology and finance, only manufacturing generic or herbal medicines. Research and development activity has been carried out in a limited manner, bringing opportunities for multinational corporations.

As per the EVFTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), pharmaceutical imports and exports from the EU and other CPTPP countries will be duty free. Consequently, foreign pharma companies would be able to import product with lower taxation. This would result in the reduction of price when contributing the products in the market. The future plan for foreign-invested enterprises in the context of these wide-ranging trade deals is to boost up business from imports.

Currently, hundreds of foreign-invested pharma distributors are operating in Vietnam, of which three – Zuellig Pharma, Mega Products, and Diethelm Vietnam – make up half of the total drug distribution market share.