Pharma violators in tender fiasco

New Sun Pharmaceutical was one of the larger names caught red-handed

According to a VIR source, Pharmaceutical JSC of February 3 (F.T.Pharma), Vietnam Chemico-Pharmaceutical JSC, New Sun Pharmaceutical JSC, and Khuong Duy Pharmaceutical Co., Ltd. are among top brands named on the list of violators of drug tender rules compiled by the Drug Administration of Vietnam (DAV) under the Ministry of Health (MoH).

In a recent announcement, the DAV reviewed the reports of the departments of Health in cities and provinces where violations have been detected since 2018.

Vietnam Chemico-Pharmaceutical JSC did not sign a contract with National Geriatric Hospital after being selected as the winning bidder to supply Natri clorid 0.9 per cent due to insufficient supply.

Several other companies also failed to sign supply contracts with related units.

For example, F.T.Pharma was reported by Ninh Thuan Department of Health after it joined a tender in 2018 for a drug named golchicine galien but failed to sign the supply contract.

Why these companies joined the tenders without sufficient supply is unclear. However, these failures may well damage their positions in upcoming tenders because their conduct disrupted local medicine supply.

After these incidents, provincial departments of Health will have to be more cautious with future tenders. “The selection of bidders in upcoming tenders will be strictly monitored and the violations will lose their points in future bidding,” a source from a local health department told VIR.

Under Circular No.15/2019/TT-BYT, every year before October 31, health authorities, hospitals, and institutions providing inpatient treatment affiliated with the MoH, and provincial departments of Health shall submit reports to the ministry on past violations committed by bidders during the tendering of drug procurement packages by local health facilities. The reports shall be the basis for subsequent bidder evaluation.

Violations of drug tenders are nothing new in Vietnam, although pharmaceuticals are directly related to people’s health. Previous violations have drawn public outrage in several instances, with the scandal of VN Pharma being a heart-rending case when it traded fake drugs and won many drug tenders in hospitals.

Currently in the local pharmaceuticals market, the main distribution channel is the hospital system where ethical drugs (ETCs) are traded, which account for 70 per cent of the total sales volume, while the rest of the market is covered by over-the-counter (OTC) drugs. As ETC drugs are often more expensive than OTC ones, many companies are willing to break the rules to win tenders.

Lawyer Le Cao said that there are still some dissonances between the legal framework and reality in tenders, including drug bidding. Even though the newly-issued Decree No.25/2020/ND-CP taking effect from April 20 and replacing Decree No.30/2015/ND-CP guiding the implementation of the Law on Public Procurement has new regulations on contractor selection, the regulations fail to make a real difference in preventing violations in bidder appointment and bidding.

“To deter new violations, wrongdoings in bidding activities should be strictly punished. Administrative fines or economic punishments are not enough. Violations in bidding for drugs and medical equipment procurement packages will continue unless more effective supervision is put in place,” Cao said.