Foreign drug firms punished for not registering prices

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Vietnam's health ministry has revoked the import licenses of two foreign drug providers for failing to register their prices as concerns over increasing medicine costs continue to grow.


Korean-owned Dasan Medichem Co., Ltd and the Vietnam-France Pharmaceutical Joint-stock Company had failed to register their prices with the Vietnam Drug Administration (VDA), inspectors said.


The violations were found in pharmaceutical sector inspections launched in response to media reports of surging drug prices. The inspections took place in Hanoi and Ho CHi Minh City.


VDA head Truong Quoc Cuong said the administration would also revoke Dasan Medichem's license in Vietnam for not cooperating with inspectorates during the investigation.


They will also launch investigations into production conditions and documentation at two Indian pharmaceutical companies Micro Lab and Clesstra Healthcare, which are supplying many products to the Vietnamese market, the official said on Wednesday.


The administration said inspections had also confirmed that imported drugs were being drastically marked up for sale on the local market.


VDA inspections of local drugstores showed that Lidocef 1g imported by the Central Pharmaceutical Joint-stock Company No.2 is sold for VND68,000 (US$3.58) per bottle.


However, the VDA's listed import price of the drug produced by the Chinese-owned Shandong Reyoung Pharmaceutical Co. Ltd. as $0.65 in 2008.


Lapaliver, which is used as a vitamin and mineral supplement, is imported at $4.8 a box, but sold for VND370,000 ($19.5), according to inspections conducted between March 30 and April 29.


Inspectors also noted that there was a "strange" difference between drugs' retail prices and those paid by state health insurance providers.


For instance, Hemax, to increase red blood cell counts, is sold at VND145,000-160,000 ($7.6-8.4) a tube in Hanoi, but government health insurers had paid VND235,200 ($12.4) for it at at Bach Mai and Thanh Nhan hospitals in Hanoi.


Health insurers had also paid VND2.3 million ($121.4) per tube for a cancer drug that only sold for VND1.4 million ($73.8) on the market, investigators said.


Inspectors were not certain why insurance agencies were paying higher than market rates.


An inspector from Hanoi's Health Department said insured patients probably re-sell the drugs that they don't finish, but that didn't explain why insurers were being charged more. 


The investigation is ongoing.


However, Cao Minh Quang, deputy minister of health, said the most important thing now was to deal with the fact that many doctors receive illegal commissions for prescriptions they write.

Under Vietnamese regulations, doctors are only allowed to prescribe generic drugs only, but many of them are indicating brand names on their prescriptions, Quang said.


Only when hospitals tighten control of prescriptions will drug prices be stabilized, he said.

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