New circular hard to swallow

The circular, which is being co-drafted by the ministries of Health, Finance and Industry and Trade, aims to regulate prices and strengthen managerial responsibility and will replace the existing circular No10/2007 co-issued by these ministries in August 31, 2007 on managing human-oriented medicine prices.

The Drug Administration of Vietnam said that one of the new iron-hands prescribed in the circular was that medicine manufacturers and sellers would be denied a registration number and have their documents approved if they failed to trumpet their product prices, sold products at prices higher than prices already announced and refused to specify prices or give notice of price increases.

“Violators will [also] be fined or faced criminal prosecution based on their violation levels under the law,” the circular said.

However, a representative from Hanoi International Health Quality Centre, told VIR that: “The circular will come to nothing, as it will not help the government to control medicine price hikes.”

She said that the circular could not answer “thousands of questions” behind year-to-year uncontrollable medicine price hikes.

“For example, in case enterprises are denied a register number, they can break the law very easily. Too many types of medicines, which don’t need register numbers, are coming to Vietnam through many channels, which cannot be checked. Even some border gate-based custom agencies are abetting these violations,” she said.

Lai Chau province’s Health Department director Nguyen Cong Huan also fleered at the circular.

“I don’t believe strongly that the circular can solve the problem of uncontrollable medicine price hikes. No specific punishments are prescribed in the circular.  Over the past years, even management agencies have some medicine-related problems. Violators are fined slightly,” Huan.

“To control medicine prices in Vietnam, their original prices overseas need to be control first. But local agencies cannot do that now due to many reasons,” he said.

At present, the circular No10/2007 aims to control the medicine price hikes and control traders’ declaration of medicine prices. However, this circular fails to specify the maximum differences between the consumption prices and import prices of imported medicines. As a result, it is difficult to punish violators.

For example, according to Hanoi-based Bach Mai Hospital’s statistics, in 2007, up to 74.8 per cent of the hospital’s imported medicines had a 35 per cent difference between consumption and import prices. The rest medicines had a difference higher than 35 per cent between consumption and import prices as they had been distributed through many channels.

In 2009, the total value of locally-produced medicines was $831.2 million, up 16 per cent against 2008 and met 49 per cent of the public demand. Vietnam imported medicines and raw materials worth $1.170 billion, up 26.8 per cent against 2008.

The country is now home to 1,176 locally owned medicine distributors and producers, 26 foreign medicine operational enterprises, and 41,849 medicine kiosks.