Medicine prices in Vietnam have been soaring because of a monopoly regime that led to a shortage of supply.
According to a pharmaceutical expert, under legal regulations from the 90's, all Vietnamese import-export companies are allowed to buy medicine from foreign pharmaceutical manufacturers.
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| Medicine prices are unaffordable for needy patients |
However, ten years ago, the Ministry of Health issued a regulation on registration numbers for each kind of medicine delivered to both manufacturers and distributors. When a distributor had registration numbers of some medicines, manufacturers could not sell them to others. As a result, a monopoly regime was formed.
In addition, distributors abused other regulation, which did not allow importing new medicines with the same active elements registered in many different names. When one distributor registered to buy many types of drugs with the same active elements, others could not register to buy drugs with these active elements.
In 2004, the Ministry expected to improve the situation by issuing a new regulation that non-exclusive distributors could import medicine sold at high prices in Vietnam. However, their plan did not work because exclusive distributors took all market shares of those medicines in Vietnam so manufacturers could not sell them to other distributors.
In order to compete against exclusive distributors, non-exclusive distributors used commissions paid to doctors as their weapon. Exclusive distributors then also took use of the commission "weapon," leading to a "commission war."
Pharmacist N.T.K.A in Go Vap District, Ho Chi Minh City said, “One medicine with different names has big different prices. I want to sell the same drugs at lower prices but in different names from the ones which were told by their doctors, but patients don’t want to buy because they just want to buy medicine advised by their doctors.”
N.T.K.A added that, if a doctor receives commissions from a distributor, he will advise his patients to buy medicine imported by that distributor, even though it is much more expensive than the similar kinds.
In addition to commission expenditure, distributors also need to pay for advertising and “tender fees” of providing medicine to hospitals.
Eventually, medicine prices become so high that patients have no choice but to pay for the costs.
After much public outrage, the ministry carried out investigations however, medicine agencies did not sell drugs at higher prices than it’s regulated because distributors are allowed to decide imported, wholesales and retail prices. Riding on this chance, they coordinated with manufacturers to drive the market prices.
At present, Vietnam imports nearly 10,000 kinds of drugs with over 900 active elements. The Ministry is unable to be aware of the prices of all these drugs sold at international markets to compare with the prices reported by the distributors.