JOINT CIRCULAR No. 02/1998/TTLT-BYT-BTC Circular of the Joint Ministry guiding the use of aid funds to establish a revolving drug fund for essential medicines.

JOINT CIRCULAR

Guidelines for using aid funds to establish a revolving essential drug fund

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To implement Government Document No. 3576/QHQT dated July 18, 1997 regarding the use of NIPPON-UNICEF aid within the framework of the "Primary Health Care" project under the Vietnam-UNICEF national cooperation program to establish a revolving essential drug fund during the period 1996-2000, the Ministry of Health and the Ministry of Finance jointly guide localities with projects to implement the following contents:

I- GENERAL PRINCIPLES

1. The NIPPON-UNICEF aid for the "Strengthening Primary Health Care" project is a source of revenue for the state budget, used for the purpose of building a revolving essential drug fund at some commune and district health facilities to ensure the availability of drugs for medical examination and treatment services for the people, not to be used for commercial profit-making activities.

2. Establishing an essential drug fund at commune and district health facilities must have a unified plan between the Ministry of Health and the People's Committees of provinces and cities. The initial revolving essential drug fund, after being distributed to communes and districts, shall be considered a one-time capital allocation that communes and districts must manage to maintain service provision for medical examination and treatment over many years.

3. Pricing for selling the first round of drugs locally must be uniformly determined by the Department of Health and the Financial and Price Control Agency, then submitted to the Provincial People's Committee for price approval. The selling price includes the cost to replenish the drug fund and a percentage of service fees for the drug seller and commune health station. The revolving sale method (instead of the previous non-replenishing distribution method) aims to form a sustainable drug fund to serve routine medical examination and treatment at the commune health station, providing care for all individuals regardless of their financial contribution capacity.

Given the social support-oriented goal of the drug fund without seeking profit, certain terms used in this Circular have specific meanings:

"Sell": The commune health station "selling" drugs should be understood as mobilizing contributions to recover the capital and service fees to sustain the drug fund for long-term medical examination and treatment services for the community.

"Purchase": Patients purchasing drugs or paying for them plus 10% service fee are considered financial contributions from the community in cases where patients can afford to contribute (BAMAKO Initiative). For poor patients unable to contribute back to the drug fund and for policy beneficiaries and those in difficult circumstances, the Commune People's Committee shall consider exemptions and reductions according to current state regulations to ensure that all people can access medical examination and treatment with drugs.

5. The Ministry of Health is responsible for managing and supervising the proper use of the aid funds in accordance with agreements signed between the Government of Vietnam and international organizations, treating it as a non-repayable aid revenue source for the state budget.

Revenue from selling drugs from this aid fund, after deducting management and service costs of 10%, may be used to maintain the drug fund, managed and supervised by local authorities.

II - SPECIFIC PROVISIONS

1. Essential Drugs

Essential drugs specified in this Circular are those listed in the essential drug list issued uniformly by the Ministry of Health. The donated drugs from NIPPON-UNICEF also fall within this list and were negotiated with the donor when signing the aid procurement plan for Vietnam.

2. Revolving Drug Fund, Objectives, Mobilization of Community Financial Contributions:

The drugs specified in this Circular are those provided through non-repayable aid to establish a revolving essential drug fund based on the BAMAKO Initiative, currently sourced from NIPPON-UNICEF. The initial drug fund is composed of donated drugs.

The objective of the Medicines Revolving Fund is to ensure that medicines are available for all people when seeking medical care, thereby contributing to improving the quality of treatment services.

Ninety percent of the revenue from selling medicines to patients is used to repurchase medicines to maintain the existence of a medicine fund at the commune health center (revolving fund); ten percent is allocated for transportation costs, management work related to the medicine fund, remuneration for healthcare staff, and equipment for the station to sustain all activities of the station and the medicine fund.

3. Distribution of the medicine fund to districts and communes:

After completing the procedures for receiving donated medicines, the Ministry of Health must record income and expenditure of medicines with the State Budget and distribute them to provinces according to the plan based on the population of each province. The cost of receiving and transporting medicines from the port to warehouses at the port and back to the province and district is covered by the provincial local budget.

4. Pricing and selling/exchanging medicines suitable for use at district and commune levels:

The Department of Health reports to the Provincial People's Committee (PPC) and organizes the reception and storage of medicines. The PPC establishes a Medicine Pricing Council consisting of the PPC, the Department of Finance and Prices, and the Department of Health.

The selling price set by the Council must be higher than the wholesale price of the Pharmaceutical Enterprise but lower than the retail price of pharmaceutical agents in the market, ensuring the sustainability of the medicine fund and timely provision of essential medicines to the public.

For types of medicines unsuitable for the commune level (in the initial product structure) but suitable for the needs of central, provincial, and district medical facilities, the Central Project Management Board prioritizes the Pharmaceutical Company to sell such medicines to hospitals in need at the directed prices approved by the Government Price Board. The revenue obtained will be used by the Pharmaceutical Company to provide essential medicines to the Project Management Board at the company's normal wholesale price for distribution to the district and commune medicine funds.

The Department of Health submits to the PPC the plan for distributing the medicine fund to each district within the province. The basis for formulating the distribution plan is the population of each district and commune.

Pharmaceutical Enterprises at all levels ensure the main supply for the medicine fund (Revolving Fund 2) at the wholesale price. The issue of purchasing essential medicines for the district-commune revolving fund is based on the drug demand for disease treatment in the locality and the list of essential medicines by the District Health Center and Commune Health Stations.

III- GUIDELINES FOR IMPLEMENTATION AT DISTRICT AND COMMUNE LEVELS

1. Based on the provincial distribution plan, the District Health Center (DHC) submits to the District People's Committee (DPC) for approval the distribution plan for communes based on the population of each commune. The DHC is responsible for receiving medicines at the district level, storing, and distributing medicines to establish the revolving medicine fund at commune health stations to serve the health care of the people.

2. At the commune level, the Commune People's Committee establishes a committee to receive the medicine fund, with the Commune Finance Office being a member responsible for assisting the Commune People's Committee in receiving the medicine fund and recording it in the commune budget. The Commune People's Committee assigns the commune health station to manage and sell medicines according to daily medical examination and treatment needs and compile a list for the Commune People's Committee to review cases of exemption and reduction.

Where there is already a Health Care Service Board, which includes representatives from the People's Committee, Finance, Health, Farmers' Association, Women's Union, Labor, Invalids, and Social Affairs, and other people's organizations, the Health Care Service Board is responsible for advising the People's Committee on reviewing those who need exemptions as mentioned above.

3. The commune health station appoints a pharmacy technician to manage the revolving medicine fund. In places where there is no pharmacy technician, a trained healthcare worker is temporarily appointed to take charge.

Daily, based on medical examination and treatment requirements, the commune health station sells medicines to patients and collects payment, recording in the daily sales book: type of medicine, quantity, amount collected.

In cases where poor patients or policy beneficiaries do not have money to pay back the medicine fund immediately, their payments are recorded as deferred or outstanding debts.

Cases confirmed by the Health Care Service Board as eligible for free or reduced fees for medical examinations and treatments (with confirmation letters from the Commune People's Committee) are recorded as exempted medicine costs.

4. Monthly, the commune health station is responsible for preparing a report on the operation results of the revolving medicine fund to report to the Commune People's Committee and the Commune Health Care Service Board (attached model).

5. Purchasing supplementary medicines for the revolving fund: The commune health station has the right to purchase supplementary medicines to replenish the revolving fund after a period of selling medicines for medical examinations and treatments, ensuring that the types of essential medicines purchased are balanced or exceed the initial medicine fund.

The system of pharmaceutical enterprises serves as the source for supplementing essential medicines for the commune-district revolving medicine fund.

6. Supervision at the commune level: The Commune Finance and Prices Board assists the Commune People's Committee in supervising and inspecting the income and expenditure activities of the revolving medicine fund.

7. Supervision at the district level:

The District Health Center is primarily responsible for supervising the operation of the commune revolving medicine fund, ensuring the following requirements:

- Essential medicines are always available at the commune health station. Ensuring that everyone seeking medical care can immediately obtain medicines. The list of essential medicines is regularly maintained and supplemented (replenished).

- Improving the efficiency of health service utilization by the public at the commune level, helping the commune health station to use medicines safely and appropriately.

The District Finance Office is responsible for coordinating with the District Health Center in supervising the revolving medicine fund capital. If the fund capital decreases by more than 50% of the initial fund due to poverty support, policy resolution, or damage from natural disasters, floods, etc., it must be reported to the District People's Committee and submitted to the Provincial People's Committee, and reported to the Ministry of Health and Ministry of Finance.

IV. RECORD KEEPING AND REPORTING SYSTEM

1. Accounting records using the revolving fund must comply with current accounting regulations.

2. Managing the purchase and sale of medicines, and the use of the 10% service fee must be recorded in books daily to serve monthly reporting for approval by the Commune People's Committee, and to report to the Commune People's Committee and the District Health Center according to current financial management regulations.

V. IMPLEMENTATION PROVISIONS

This Circular shall take effect fifteen days from the date of signature and shall be applied within the framework of the Strengthening Primary Health Care Project under the Vietnam - UNICEF National Cooperation Program and other programs/projects related to the use of essential drug aid to establish a revolving drug fund. All previous provisions contrary to this Circular are hereby abolished.

During implementation, if there are any difficulties, health-financial authorities at all levels and relevant agencies shall have the responsibility to report to the Joint Ministry for timely supplementation and amendment.