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

CIRCULAR

JOINT CIRCULAR OF THE MINISTRY OF HEALTH AND THE MINISTRY OF FINANCE

GUIDELINES ON THE USE OF GRANT FUNDS TO ESTABLISH A PHARMACEUTICAL REVOLVING FUND FOR ESSENTIAL MEDICINES

Pursuant to Decision No. 3576/QHQT dated July 18, 1997 of the Government on the use of grant funds from NIPPON - UNICEF within the framework of the project "Primary Health Care" under the Vietnam - UNICEF National Cooperation Program to establish a pharmaceutical revolving fund for essential medicines during the period 1996-2000; the Ministry of Health and the Ministry of Finance hereby guide localities with projects to implement the following contents:

I. GENERAL PRINCIPLES

1. The grant from NIPPON - UNICEF for the project "Strengthening Primary Health Care" is a source of revenue for the state budget, to be used for the purpose of establishing a revolving fund for essential medicines at some health facilities at commune and district levels to achieve the goal of having medicines available for medical examination and treatment services for the people, not to be used for commercial profit-making activities.

2. The establishment of an essential medicine 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 essential medicine fund (first round) after being distributed to communes and districts shall be considered a one-time capital allocation that communes and districts must organize management to maintain service provision for medical examination and treatment over many years.

3. Pricing for the sale of first-round medicines in local areas must be jointly approved by the Department of Health and the Financial and Price Control Agency, then submitted to the People's Committee of the province for price determination. The selling price includes the amount of money to replenish the medicine fund and a percentage of service fees for the seller and commune health stations. The revolving sale method (instead of the previous non-distribution method) aims to form a regular medicine fund to serve routine medical examination and treatment services right at the commune health station implementing healthcare for all people regardless of their financial contribution capacity.

4. Due to the social support nature of the medicine fund without seeking profit, certain terms used in this Circular have specific meanings:

"Sale": The commune health station "selling" medicines should be understood as mobilizing contributions to recover capital and service fees to sustain the medicine fund for long-term service provision for community medical examination and treatment.

"Purchase": Patients purchasing medicines or paying for medicines plus 10% service fee are considered financial contributions from the community in cases where patients can afford to contribute (BAMAKO Initiative). In cases of poor patients who cannot contribute back to the medicine fund and those with policy benefits and difficult circumstances, the Commune People's Committee shall consider exemptions and reductions according to current regulations of the State, ensuring that all people can access medical examination and treatment services with medicines.

5. The Ministry of Health is responsible for managing and supervising, together with local People's Committees, the proper use of the purposes agreed upon between the Government of Vietnam and international organizations, managing it as a grant revenue source for the state budget.

Revenue from the sale of medicines from these grant funds, after deducting management costs and service fees of 10%, may be used to maintain the medicine fund, managed and supervised by local People's Committees.

II. SPECIFIC PROVISIONS

1. Essential Medicines

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

1. Revolving Medicine Fund, Objectives, Mobilization of Community Financial Contributions:

The medicines specified in this Circular are those provided through non-reimbursable grants to establish a revolving medicine fund based on the BAMAKO Initiative, currently sourced from NIPPON - UNICEF. The initial capital for the medicine fund consists of donated medicines in kind.

The objective of the revolving drug 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 revolving drug fund at the commune health center; ten percent is allocated for transportation costs, management work related to the drug fund, remuneration for healthcare staff, and equipment for the station to sustain all activities of the station and the drug fund.

3. Distribution of the drug 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 - Price Control, 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 medicine distributors in the market, ensuring the maintenance of the drug fund and timely provision of essential medicines to the public.

Medicines not suitable for the commune level (in the initial product structure) but appropriate for the needs of central and provincial health facilities are prioritized by the Central Project Management Board to be sold by the Pharmaceutical Company to hospitals in need at the directed price approved by the Government Price Control Board. Revenue from sales 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 drug funds.

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

Pharmaceutical Enterprises at all levels ensure the main supply for the drug fund (revolving fund 2) at the wholesale price. The issue of purchasing essential medicines for the district-commune revolving drug fund is based on the medication needs for disease treatment in the locality and the list of essential medicines.

III. GUIDELINES FOR IMPLEMENTATION AT DISTRICT AND COMMUNE LEVELS

1. Based on the provincial distribution plan for the district, the District Health Center (DHC) submits to the District People's Committee (DPC) for approval of the distribution plan for each commune based on the population of each commune. The DHC is responsible for receiving medicines at the district level, storing them, and distributing them to build a revolving drug 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 drug fund reception committee, including the Commune Finance Office as a member responsible for assisting the Commune People's Committee in receiving the drug 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 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 Committee, which includes representatives from the People's Committee, Finance, Health, Farmers' Union, Women's Union, Labor, Invalids, and Social Affairs, and other people's organizations, the Health Care Service Committee is responsible for advising the People's Committee on reviewing those eligible for exemption and reduction mentioned above.

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

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

For poor patients or policy beneficiaries who do not have money to pay back the drug fund immediately, their payments are recorded as deferred or as debt.

For cases confirmed by the Health Care Service Committee as eligible for free or reduced fees for medical services (with confirmation from the Commune People's Committee), the amount of free or reduced medicines is recorded in the book.

4. Once a month, the commune health station is responsible for preparing a report on the operation results of the revolving drug fund to report to the People's Committee and the Health Care Service Committee (according to the 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 services, ensuring that the types of essential medicines purchased are balanced or exceed the types of medicines in the original drug fund.

The pharmaceutical enterprise system serves as the source for supplementing essential medicines for the commune-district revolving drug fund.

6. Supervision at the commune level: The Commune Finance and Price Control Office is responsible for assisting the Commune People's Committee in supervising and inspecting the income and expenditure activities of the revolving drug fund.

7. Supervision at the district level:

The District Health Center is primarily responsible for monitoring the operation of the commune-level revolving drug 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 (revolving).

- 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 drug fund capital. If the drug fund capital decreases by more than 50% of the initial drug fund due to poverty support, policy resolution, or damage from natural disasters such as floods, etc., it must be reported to the District People's Committee for submission to the Provincial People's Committee and reported to the Ministry of Health and the Ministry of Finance.

IV. RECORD KEEPING SYSTEM AND REPORTING

1. Accounting records using the revolving drug fund must be carried out in accordance with current accounting regulations.

2. Managing the purchase, sale of medicines, and the use of the 10% service fee must be recorded in books daily to serve as the basis for monthly reports submitted for approval by the Commune People's Committee, and to report to the 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 related programs/projects using essential drug aid to establish a revolving drug fund. All previous regulations contrary to this Circular are hereby abolished.

During implementation, if there are any difficulties, health and finance agencies at all levels and relevant agencies shall promptly report them to the Joint Ministry for timely supplementation and amendment.

ATTACHMENT MODEL STATED ON PAGE 4, SECTION III, POINT 4

JOINT CIRCULAR OF THE MINISTRY OF HEALTH AND THE MINISTRY OF FINANCE

Monthly report of the Commune Health Station on

THE OPERATIONAL RESULTS OF THE REVOLVING DRUG FUND

must clearly state:

1. The total value of drugs in stock at the beginning of the quarter (including both drugs and cash).

2. The value of drugs used during the period.

3. The total amount of reductions (approved by the People's Committee).

4. The total amount spent on purchasing additional drugs to replenish the fund during the period. 5. The total value of drugs in stock at the end of the quarter (both drugs and cash).

REPORT ON THE OPERATIONAL RESULTS OF THE REVOLVING DRUG FUND

MONTH... YEAR 199...

REPORT ON THE OPERATIONAL RESULTS OF THE REVOLVING DRUG FUND

MONTH... YEAR 199...

Commune Health Station... District... Province...

REPORT ON THE USE OF PERCENTAGE OF SERVICE FEES COLLECTED FROM DRUG SALES

The percentage of service fees collected from drug sales, allocated for use by the station, is as follows:

MODEL 5 TYPES OF ACCOUNT BOOKS FOR MANAGING THE REVOLVING DRUG FUND

1. Purchase Ledger

2. Retail Price List

3. Daily Sales Revenue Ledger

4. Commission Income and Expenditure Ledger

5. Inventory Ledger

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PURCHASE LEDGER (1/5)

Source of purchase: for example, Pharmacy of District X___

Date of purchase ___/___/199__

Commune Health Station ___ Name and signature, Director

Commune ___

District Health Center ___

Provincial Department of Health ___ Confirmation

Name and signature Deputy Chairman of the People's Committee ___

Total quantity purchased ___ units.

Total amount paid ___ dong.

Circular of the Joint Ministry of Health and Finance on the Revolving Drug Fund at the commune level.

RETAIL PRICE LIST (2/5)

DRUG NAME LISTED IN ALPHABETICAL ORDER A, B, C

Commune Health Station ___ Name and signature, Director

Commune ___

District Health Center ___

Provincial Department of Health ___ Confirmation

Name and signature Deputy Chairman of the People's Committee ___

DAILY SALES REVENUE LEDGER (3/5)

(data source taken from daily drug sales journal)

Circular of the Joint Ministry of Health and Finance on the Revolving Drug Fund at the commune level.

4. COMMISSION INCOME AND EXPENDITURE LEDGER (4/5)

Commune Health Station ___ Name and signature, Director

Commune ___

District Health Center ___

Provincial Department of Health ___ Confirmation

Name and signature Deputy Chairman of the People's Committee ___

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INVENTORY LEDGER (5/5)

Commune Health Station ___ Name and signature, Director

Commune ___

District Health Center ___

Provincial Department of Health ___ Confirmation

Name and signature Deputy Chairman of the People's Committee ___

Circular of the Joint Ministry of Health and Finance on the Revolving Drug Fund at the commune level.

MODEL OF DAILY DRUG SALES JOURNAL

COMMUNE HEALTH STATION…DISTRICT…PROVINCE…