According to a recent survey conducted by Vietnam’s Ministry of Health and Ho Chi Minh City’s health departments, retail prices of almost 800 drug products have been marked up this past year, some have increased to over double their original prices. The majority of the drug products whose prices have increased are produced by foreign manufacturers. Chief Inspector at the Vietnamese Ministry of Health, Tran Quang Trung, attributed the rising prices to the lack of control by the ministry to set prices on imported drugs. He commented, “The state could not control the exact price of imported drugs, and foreign pharmaceutical companies in Vietnam therefore have pushed prices to their highest levels.”
Foreign pharmaceutical companies and distributors have attributed the rising prices to their need to adjust to the fluctuating exchange rates in relation to the Vietnamese dong. They maintain that in order to protect their revenues from currency risk, price increases on their drug products are necessary. However, Chief Inspector Trung argues that currency fluctuations are not to blame; rather, drug prices have increased due to the monopolistic nature of import, distribution and pricing of foreign manufactured drugs. Some 4,500 drugs are handled by 1,000 sole distributors. Distributors often make 15% to 30% in profit for imported drugs. However, some have been known to mark up drug prices as high as 390% of the original import price.
For example, an anticonvulsant drug product manufactured by Novartis Pharmaceuticals and imported to Vietnam from France, Tegretol ™, is imported at a price of VND 51,744 (US$3.34) for a box of 50 tablets. The drug is resold to consumers in Vietnam at a price of VND 118,190 (US$7.62), earning the distributor a margin of approximately 130%.
Chief Inspector Trung believes that in order to combat rising drug prices and to protect consumers in Vietnam, revisions must be made to existing regulations controlling drug pricing, imports, and the current sole representation system. In a country where 63% of the population lives on less than $2 per day, changes must be implemented fairly quickly to protect consumers.