Liquidation of the contract to set up a pharmacy counter at Do Luong General Hospital is in accordance with the law.

Proposal to terminate the pharmacy contract

On January 1, 2015, Do Luong District General Hospital (represented by Mr. Le Dinh Nam - Hospital Director) and Do Luong District Pharmaceutical Branch of Nghe An Pharmaceutical - Medical Supplies Joint Stock Company (represented by Mr. Nguyen Trong Luong - Branch Director) signed a civil contract to open a pharmacy to serve patients.

The two parties agreed on the following contents: Do Luong District General Hospital agreed to allow Do Luong District Pharmaceutical Branch to set up a pharmacy counter in the hospital premises in room number 1 and ½ of room number 2 area to the west of building A to open a medical supplies pharmacy counter to serve outpatients and inpatients at Do Luong District General Hospital... The contract period is 10 years (from January 1, 2015 to December 31, 2025). The contract fee is 6 million VND/year.

Contract between Do Luong District General Hospital and Do Luong District Pharmaceutical Branch. Photo: Thanh Chung

After the contract was signed, Do Luong District Pharmaceutical Branch set up a pharmacy (also known as pharmacy No. 51) at Do Luong District General Hospital and operated from January 1, 2015 to March 2022.

On June 21, 2017, the National Assembly promulgated the Law on Management and Use ofpublic propertyOn December 26, 2017, the Government issued Decree No. 151/2017/ND-CP detailing a number of articles of the Law on Management and Use of Public Assets, effective from January 1, 2018.

The Law on Management and Use of Public Assets and Decree 151 clearly stipulate cases in which public service units are allowed to lease public assets, accordingly: Public service units are responsible for preparing plans to use public assets for business purposes, leasing, joint ventures, and associations. The leasing of public assets at public service units is carried out in the form of auctions applicable to asset leasing packages that are the basis for public service activities.

In accordance with the provisions of the Law and Decree, the Hospital has developed a Project on using public assets for business purposes, leasing at Do Luong District General Hospital and the Project was approved by the People's Committee of Nghe An province in Decision No. 3974/QD-UBND dated November 9, 2020, allowing Do Luong District General Hospital to lease pharmacy premises, the frontage of the hospital campus, an area of ​​23.5m2 in the form of auction.

Pharmacy No. 51 of Do Luong Pharmaceutical Branch is located at Do Luong District General Hospital. Photo: Thanh Chung

According to Mr. Le Duc Hai, Director of Do Luong District General Hospital (replacing Mr. Le Dinh Nam who retired): Determining that this contract was not in accordance with legal regulations, Do Luong District General Hospital notified Do Luong Pharmaceutical Branch to terminate the contract to conduct pharmacy bidding according to the Law on Management and Use.public propertyand Decree 151/2017/ND-CP on management and use of public assets. Do Luong District General Hospital has negotiated many times and requested Do Luong Pharmaceutical Branch to agree to terminate the contract, but Do Luong Pharmaceutical Branch did not cooperate and said that their Pharmacy Contract was still valid.

According to Mr. Nguyen Trong Luong, Director of Do Luong Pharmaceutical Branch: The implementation of the new project by Do Luong District General Hospital on the bidding for the use of public assets, including the liquidation of pharmacies and re-bidding for hospital pharmacies, is not appropriate. Meanwhile, the contract between Do Luong District Pharmaceutical Branch and the hospital on opening a pharmacy on the hospital campus is still valid until December 31, 2025 and is in accordance with the law. The hospital is requested to create conditions for Do Luong Pharmaceutical Branch to complete the contract.

Determining authority to lease public assets

To have a basis for resolution, on June 21, 2021, Do Luong District General Hospital issued Document No. 153 to request the Department of Health and the Department of Finance of Nghe An to consider providing guidance on resolving the problem. On July 2, 2021, Nghe An Department of Finance issued Official Dispatch No. 2411 in response to Document No. 153 of Do Luong District General Hospital. Nghe An Department of Finance stated the provisions of law on leasing assets at public service units and handling in cases of leasing not in accordance with regulations.

Regarding the incident, in October 2021, due to the urgency of implementing Decree 151/2017/ND-CP on the management and use of public assets, Do Luong District General Hospital proceeded to build a new pharmacy according to the l/500 planning at a new location and auctioned it according to the correct procedure. The hospital notified the Do Luong District Pharmaceutical Branch to participate in the auction, but the Pharmaceutical Branch did not participate. Currently, the winning bidder for the new pharmacy cannot open because according to the Project, Do Luong District General Hospital only has 01 pharmacy. Photo: Thanh Chung

According to Clause 2, Article 11 of the Law on State Asset Management 2008, which stipulates the responsibilities of the provincial People's Committee and Article 43 of Decree No. 52/2009/ND-CP dated June 3, 2009 of the Government, which stipulates the authority to decide on leasing state assets at self-financed public service units: In case of using public assets which are assets attached to land or public service establishments for leasing before January 1, 2018, permission from the provincial People's Committee must be obtained.

Clauses 4 and 5, Article 136, Decree No. 151/2017/ND-CP dated December 26, 2017 stipulate the handling of Joint Venture, Association and Property Lease Contracts before January 1, 2018 as follows: For business, lease, joint venture and association contracts signed before the effective date of this Decree in accordance with the provisions of law at the time of signing, public service units shall continue to implement the signed Contract. For business, lease, joint venture and association contracts signed before the effective date of this Decree but not in accordance with the provisions of law at the time of signing, the head of the agency, organization or unit shall be responsible for terminating the contract to manage and use public assets in accordance with the provisions of the Law on Management and Use of Public Assets and this Decree.

Nghe An Department of Finance stated: Do Luong District General Hospital is responsible for reviewing the Asset Lease Contract with the above legal bases to decide whether to terminate or continue implementation. In case the asset lease has not been approved by the competent authority, the Hospital must terminate the Contract to manage and use public assets in accordance with the provisions of the Law on Management and Use of Public Assets and the content of the approved Project on Using Public Assets for Business and Lease Purposes.

Based on the opinion of Nghe An Department of Finance, Do Luong District General Hospital conducted a review and on January 7, 2022 issued Notice No. 03/TB-BVĐL on the liquidation of the asset lease contract to Do Luong District Pharmaceutical Branch.

After receiving the notice, on January 20, 2022, Do Luong District Pharmaceutical Branch sent a response letter to Do Luong District General Hospital, continuing to request that pharmacy No. 51 operate until the end of the contract period.

Termination of contract is legal

Nghe An Department of Health worked with Do Luong district to clarify the case of renting a pharmacy counter location at Do Luong District General Hospital. Photo: Thanh Chung

When the contract liquidation has not been completed, some mass media and social networks have posted some articles that are not true to the nature of the incident, causing misunderstandings for the people... On April 15, 2022, Nghe An Department of Health held a meeting to resolve problems related to the establishment of a pharmacy counter in the premises of Do Luong District General Hospital by the Department of Health with the participation of leaders of the Department of Health and departments of the Department, representatives of Do Luong District General Hospital, representatives of Do Luong District Pharmaceutical Branch, Nghe An Pharmaceutical - Medical Supplies Joint Stock Company.

On March 29, 2022, Nghe An Department of Health issued Decision No. 442/QD-SYT on revoking the Certificate of Good Pharmacy Practice (GPP) No. 870/17/GPP issued on October 8, 2021 and the Certificate of Eligibility for Pharmaceutical Business No. 01847-16/NA-DKKDD issued on October 8, 2021 of Pharmacy No. 51, Do Luong District Pharmaceutical Branch. Reason for revocation: Mr. Le Anh Quang (owner of the pharmacy) returned the Certificate of Good Pharmacy Practice, the Certificate of Eligibility for Pharmaceutical Business, and requested to stop operating the above pharmacy.

At the meeting, Mr. Le Duc Hai - Director of Do Luong District General Hospital did not agree to let Do Luong District Pharmaceutical Branch continue to set up a pharmacy within the hospital premises for the following reasons: The contract on opening a pharmacy to serve patients signed on January 1, 2015 between the Director of Do Luong District General Hospital and the Director of Do Luong District Pharmaceutical Branch was an illegal contract at the time of signing because: The contract did not have a number; The contract signed on January 1, 2015 was on New Year's Day and had not been permitted by the competent authority as prescribed.

Specifically, at the time of signing, Do Luong District General Hospital had not yet asked for approval from the competent authority, Do Luong People's Committee (in 2015, Do Luong District General Hospital was a district-level public service unit under the Do Luong District People's Committee to manage and operate the budget and public assets). Therefore, in Clause 5, Article 136 of Decree No. 151/2017/ND-CP, the head of the agency, organization, or unit is responsible for terminating the Contract to manage and use public assets in accordance with the provisions of the Law on Management and Use of Public Assets and Decree No. 151/2017/ND-CP.

Mr. Nguyen Trong Luong - Director of Do Luong Pharmaceutical Branch expressed his wish to fulfill the contract. Photo: Thanh Chung

After the meeting with the Department of Health, on April 16, 2022, Do Luong Pharmaceutical Branch sent Official Dispatch No. 06 to Do Luong District General Hospital. The Official Dispatch stated that the contract signed on January 1, 2015 was in accordance with legal regulations; requested to create conditions to maintain Pharmacy No. 51 until the end of the contract, possibly at the old location or build a new one within the hospital premises. The rental price can be renegotiated by appendix, on the principle of being consistent with the market mechanism, effective in the use of public assets...