Vietnam’s pharmaceutical market is opening up and foreign-invested enterprises are beginning to play a larger role in the country, now contributing over 60% of the total prescription drugs available in Vietnam. However, conducting business in Vietnam is difficult, especially in the pharmaceutical industry. Vietnamese pharmaceutical regulations tend to be unclear and are implemented on a case-by-case basis. As a result, many of these foreign companies have been able to increase their drug prices multiple times over the past year. By the end of 2004, drug prices had increased over 9% compared with prices in 2003, and many Vietnamese citizens are struggling to pay these higher prices.
As a result, in January 2005, Vietnam’s Drug Administration Department released a new regulation stating that foreign drug companies cannot raise their drug prices without prior permission from the Ministry of Health (MOH). Under this new regulation, foreign companies manufacturing and trading drugs in Vietnam are encouraged to keep their drug prices stable. Moreover, even in an urgent case, companies will still be required obtain permission from the MOH and provide specific details of their planned price increase.