Pharmaceutical profits cannot exceed 15%

The Government has just issued Decree 54/2017/ND-CP detailing a number of articles and measures to implement the Law on Pharmacy, notably specific regulations on measures to manage drug prices.

Accordingly, drug price management measures stipulated in the decree include: drug price declaration and re-declaration; drug price posting, regulations on retail surplus of retail establishments within medical examination and treatment facilities; drug purchase bidding, drug price negotiation and drug price stabilization measures.

Pharmaceutical business establishments are responsible for fully implementing regulations on drug price declaration, re-declaration and other regulations on drug price management. Illustrative photo

Do not sell drugs at a price higher than the declared price.

The Decree clearly states that pharmaceutical business establishments are responsible for fully implementing regulations on drug price declaration and re-declaration and other regulations on drug price management, and are responsible before the law for declared and re-declared prices and the accuracy of data, reports, and information provided by the establishment.

Pharmaceutical business establishments are not allowed to sell drugs without a declared or re-declared price announced on the Ministry of Health's electronic information portal, declared or re-declared by the manufacturing facility or the facility ordering the processing or importing of the drug. Pharmaceutical business establishments are not allowed to wholesale or retail drugs at a price higher than the declared or re-declared price announced.

In case the competent state management agency issues a written notice to the pharmaceutical business establishment requesting to reconsider the price of the drug item declared or re-declared by the establishment and published on the Ministry of Health's electronic information portal, within 60 days from the date of the document from the competent state management agency, the establishment must submit a written response with relevant documents to explain the reasonableness of the declared price or adjust the declared or re-declared price to a reasonable level.

After the above deadline, if the facility does not have a written response, the declared and re-declared prices will no longer be valid and will be removed from the Ministry of Health's Electronic Information Portal.

The Decree also requires drug wholesalers to post the wholesale price of each drug at the transaction location or drug sales location of the drug wholesaler. Drug retailers must post the retail price of each drug at the drug retail location.

Wholesale and retail drug stores are not allowed to sell at prices higher than those listed by the store.

Retail profit from 2-15%

Regarding the retail surplus (profit) of drug retail establishments within the premises of medical examination and treatment facilities, the Decree stipulates that "the retail price is equal to the purchase price plus the retail surplus (%) multiplied by the purchase price"

The retail margin of drug retail establishments within the premises of medical examination and treatment facilities must not be higher than the following maximum retail margin:

For drugs with a purchase price calculated per smallest packaging unit less than or equal to 1,000 VND, the maximum retail margin is 15%.

For drugs with a purchase price calculated on the smallest packaging unit from over 1,000 VND to 5,000 VND, the maximum retail margin is 10%.

For drugs with a purchase price calculated on the smallest packaging unit from over 5,000 VND to 100,000 VND, the maximum retail margin is 7%.

For drugs with a purchase price calculated on the smallest packaging unit from over 100,000 VND to 1,000,000 VND, the maximum retail margin is 5%.

For drugs with a purchase price calculated on the smallest packaging unit of over VND 1,000,000, the maximum retail margin is 2%.

According to Ngo Trang/vneconomy