Creating a level playing field for the pharmaceutical market.

In implementing the Law on Bidding (amended), the Ministry of Health has issued Joint Circular No. 36/2013/TTLT-BYT-BTC amending and supplementing a number of articles of Joint Circular No. 01/2012/TTLT-BYT-BTC guiding the bidding process for drug procurement in medical facilities.

The Ministry of Health expects that, with the new amendments and the timely implementation of the circular throughout the industry, the shortcomings of drug bidding will be thoroughly addressed.

According to the Drug Administration Department of the Ministry of Health, after one year of implementation, Circular 01 has somewhat ensured the principles of competition, transparency, and economic efficiency of the Bidding Law. Based on an assessment of drug procurement in hospitals in 2013, according to the Director of the Drug Administration Department, Truong Quoc Cuong, Circular 01 has helped save a significant amount of budget allocated for drug purchases.

According to the results of the 2013 drug bidding process, hundreds of billions of VND were saved. Specifically, the Ha Tinh Department of Health saved approximately 32 billion VND, about 25% of the total expenditure on purchasing drugs for medical examination and treatment; the Quang Ngai Department of Health saved about 28 billion VND, about 25%; and the Quang Ninh Department of Health saved 40 billion VND, about 20%.

However, the implementation of Circular 01 also revealed shortcomings such as the failure to adjust drug classifications to allow healthcare facilities to choose high-quality drugs from developed countries or drugs from domestic manufacturers with good standard technology and reasonable prices; the lack of separate classifications for traditional medicine and herbal medicine tenders; an unreasonable scoring structure; and regulations on annual purchase limits that do not ensure drug supply.

To address these limitations, the new Circular separates drugs manufactured to EU-GMP or PIC/s-GMP standards in the EU, Japan, and the US from drugs manufactured in facilities that meet EU-GMP or PIC/s-GMP standards but are not located in countries with advanced pharmaceutical industries. This regulation clearly distinguishes technological levels to emphasize the importance of high-quality drugs.

According to the new Circular, drug tenders are divided into packages based on their names: drugs whose patent protection has expired; branded drugs; and traditional medicines. Among these, drugs whose patent protection has expired usually have a dominant quantity, so they are clearly divided into groups based on technical criteria and technological standards.

According to experts, with its revised content, the new circular is creating a legal framework and establishing order in the pharmaceutical market, thereby stimulating the development and dissemination of domestically produced medicines. Circular 36 has shown opportunities for domestically produced medicines, because in addition to bidding in a specific group, they can also participate in bidding for imported medicines that meet the same standards; domestically produced medicines can bid in all groups of medicines that conform to the equivalent production processes and quality standards of other countries.

In the bidding process, the new Circular stipulates that only one drug item meeting the technical and quality requirements specified in the tender documents and having the lowest evaluated price within that drug group will be considered for the winning bid. Thus, the price criterion still follows the method of selecting the lowest price. This will continue to create fierce competition among manufacturers as they cut costs to reduce prices, especially by choosing cheaper raw materials.

According to Dr. Truong Quoc Cuong, the national strategy for the development of Vietnam's pharmaceutical industry, which aims to increase the rate of domestically produced medicine use to over 70% in the coming years, is a significant challenge; the new circular being implemented is a new step forward in terms of appropriate mechanisms and policies to stimulate domestic production and consumption of medicines.

According to the Financial News