Additional Regulations to Restrain Drug Prices in Vietnam

Vietnam’s Ministry of Health (MOH) recently issued new regulations on drug prices. Currently, most price controls in Vietnam are enforced by mandatory reporting. Under the new laws, prices will be more directly administered. Drug pricing will be split into three segments, each regulated by the government in a different way.

In the first segment, the Ministry of Health and provincial People’s Committees will set prices for drugs purchased directly by the government. The second segment will be for essential drugs used by State-owned medical institutions. Distributors will be required to sell these drugs to institutions through a tender system, with the lowest bidder winning automatically. The third segment will be for drugs sold on the open market. Though retailers will be able to propose these prices, the government will regulate and approve the prices. Both drug companies and vendors will need to publicize the cost and retail price of each drug.

This new policy details penalties for failing to comply with these regulations. If a trading company is caught selling drugs at unreasonable prices, the MOH will temporarily suspend import licenses on its products. The MOH has also initiated an investigation of the drug prices hospitals pay, which are often inflated by several mark-ups by intermediaries.

These new regulations are to control for the rising drug prices found in recent investigations by the Vietnam Pharmaceutical Manufacturing and Trading Association. Many companies have blamed the rise in drug prices on higher raw material costs.