Medicine prices: buy cheap, sell high

Some drug wholesalers in Hanoi and HCM City are making obscene profits, reveals the latest inspection by the Ministry of Health. There’s talk of establishing price controls.

Tuoi Tre reports on an inspection was carried out from March 30 to April 10 at 48 representative offices of foreign pharmaceutical firms, hospital pharmacies and private drugstores in Vietnam’s two biggest cities.

The inspectors found that some drug wholesalers were selling medicines at a 500 percent markup.

For example, Lidocef 1g, a drug produced by a Chinese company, Shandong Reyoung, is imported by Central Pharmaceutical Company No.2. This firm won a contract to provide this medicine to Hanoi’s famous Bach Mai hospital for 68,000 dong/unit , though its cost is less than 12,500 dong/unit. The profit earned from this product is over 500 percent.

There are many other products like this, inspector said. A drug called Lapaliver is being imported for 100,000 dong per packet of 10 pills and resold for 370,000.

The inspectors emphasize that the prices for medicines didn’t just rise suddenly during the time of inspection. The price of a subset of 124 out of 2361 imported medicines surveyed increased by 551 percent on average.

Some pharmaceutical companies and representative offices like Dong Nam, Mega Lifesciences, and Medochemie were found to have declared unrealistic prices.

The prices of some products offered by the Dasan Medichem and Viet Phap Pharma companies are not registered with the Drug Administration of Vietnam. The Ministry of Health has decided to cancel the import licences of these firms.

Truong Quoc Cuong, chief of the Drug Administration, said that the agency would also revoke Dasain Medichem’s licence to sell medicines and medical supplies to punish the firm’s failure to cooperate with its inspection.

On April 28, Cuong instructed an inspection group to check production conditions at two Indian pharmaceutical firms, Micro Lab and Clesstra Healthcare, that sell many products in Vietnam.

Deputy Minister of Health Cao Minh Quang told Tuoi Tre newspaper that the most urgent issue is the practice of paying commissions to doctors who prescribe medicines.

“Health Ministry Instruction 05 stipulates that doctors are permitted to write prescriptions by the generic names of medicines, not by their brand names. However, doctors regularly use brand names in their prescriptions. Further, we have to prioritize our problems. The biggest one in managing drug prices is commission for doctors. If hospitals strictly implement the rules, drug prices will be more stable,” Quang said.

An expert in drug management agreed, saying that the prices for medicines can go up and down but the problem of drug firms paying commissions to doctors who prescribe their drugs needs to be solved urgently. This situation distorts the use of drugs, he explained, because the drugs that are prescribed are usually more costly and may not even be necessary for treatment.

Quang said that last year the health sector spent 27 trillion dong, including 11 trillion dong for purchasing medicines. Up to 50 percent of the cost of medicines was borne by the health insurance agency. Quang proposes to organize competitive bidding in response to national tenders for the drugs purchased by the health insurance agency, especially for three groups of medicines used most popularly: pain and fever relievers, antibiotics and vitamins.

Notably, for the same medicines, the prices paid by the health insurance plan are higher than their market prices. For example, Hemax is priced from 145,000 to 160,000 dong per phial in the market but Bach Mai and Thanh Nhan Hospitals in Hanoi paid up to 235,200 dong per phial using health insurance funds.

Tags: Vietnam medicine prices, Vietnam pharmaceuticals