VietNamNet Bridge – A host of changes are set to be made this year to the process by which hospitals nationwide bid for drugs, in a concerted effort to halt violations in the price management of medication.

Patients buy medicine at Bach Mai Hospital in Ha Noi. Changes will be made this year to the process by which hospitals bid for pharmaceuticals in order to halt violations of price management regulations.

In Viet Nam, the Ministry of Health has regulated that competing pharmaceutical companies must sell their products to state hospitals through tender. The lowest price offered wins the bid and the company gets the right to provide the drug to hospitals for a year.

However, due to inadequate bidding management, in many cases the same drug product has sold for different winning prices in different provinces.

Some companies have even worked with hospitals to greatly push up the price of drugs in order to force patients to spend more money on their medicine.

Health Minister Nguyen Thi Kim Tien admitted at a recent conference that research had uncovered many problems in the price management system. However she said that local drug prices were not higher than in other countries in the region.

Nguyen Thi Yen, deputy head of the Pharmaceutical Department at the Viet Nam Social Insurance Agency, confirmed that the price of drugs has been known to differ greatly between provinces.

She said in an interview with Hai Quan (Customs) newspaper that the same brand of Paracetamol sold for 16 different prices across Viet Nam, from VND85 to VND900 per pill. She also cited the example of Perabact, an Indian-made medicine that is available for just VND18,000 (US$0.9) in Mekong Delta Dong Thap Province, but costs VND30,000 ($1.50) in nearby Can Tho.

She said that drug prices could be increased to an unreasonable level because the bidding process goes through several different brokering stages.

Tien suggested that many pharmaceutical companies collaborate with doctors to prescribe imported medicine in order to raise the price.

According to the newly enforced regulations, drug bidding is to be conducted centrally by health departments in provinces and cities. Hospitals will negotiate contracts basing on drug bidding results provided by provincial health departments.

The winning price of each drug product will not be allowed to exceed the ceiling price approved by the health department in their bidding plan.

Representatives from the health sector have revealed that the drug price makes up 60 per cent of the total treatment expenses of the average patient. As a result, the proper control of drug prices will play an important role in reducing treatment costs.

Nguyen The Dung, CEO of the Minh Dan Pharmaceutical Company, said that the new regulation would lead to the reduction in price of some drugs by up to 30 per cent.

Nguyen Ngoc Hien, Deputy Director of Ha Noi-based Bach Mai General Hospital said that his hospital's drug prices would remain cheaper than private hospitals and other sources, despite Bach Mai bidding for around 1,200 drug items every year.

The new regulations were officially announced via a health and finance inter-ministerial circular in January 2012.

Source: VNS