Directive No. 02/2006/CT-BYT on continuing to intensify the implementation of measures to stabilize the pharmaceutical market in 2006

DIRECTIVE

Regarding the continued promotion of measures to stabilize the pharmaceutical market in 2006

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In 2005, there were many fluctuations in global economic factors such as the depreciation of some strong foreign currencies, a sudden increase in oil prices, and a significant rise in the prices of certain raw materials for production like chemicals, liquefied natural gas, and pharmaceutical raw materials. These fluctuations directly affected Vietnam's economy, with consumer products such as food increasing by 7.8% and 12.0%, respectively, which had a considerable impact on people's lives. To mitigate these effects on the domestic pharmaceutical market, the Ministry of Health actively and promptly implemented comprehensive stabilization measures, leading to a relatively stable pharmaceutical market in 2005: supply met demand, drug quality improved, prices remained stable, and the annual price increase for pharmaceuticals and healthcare products in 2005 (4.9%) was 46% lower than in 2004 (9.1%).

In 2006, the prices of various materials, goods, and raw materials serving production in the global pharmaceutical market will remain at high levels. According to forecasts by many economists, the domestic pharmaceutical market may experience complex developments.

To continue maintaining stability in the market for medicines for disease prevention and treatment, preventing abnormal price fluctuations, and implementing the Prime Minister's directive in Circular No. 281/TTg-VX dated February 16, 2006, regarding the implementation of measures to stabilize medicine prices in 2006, the Minister of Health issues the following instructions:

1. Units under the Ministry of Health:

a) The National Pharmaceutical Administration:

- Develop an action plan with specific contents and solutions to fulfill the state management function over drug prices in 2006, ensuring legality, feasibility, and effectiveness.

- Direct and guide domestic and foreign drug production, trading, and import-export enterprises to review all production, marketing costs, and minimize unnecessary expenses to avoid unreasonable price adjustments.

- Lead and coordinate with the Ministry of Health Inspectorate, the Traditional Medicine Department, the Treatment Department, the Planning and Finance Department, and related agencies to re-examine the pricing structure of domestically produced drugs, import prices for various items from drug production, trading, and import-export enterprises, especially focusing on units planning price adjustments in 2006 to ensure that there are no sudden price increases, simultaneous price hikes, or unreasonable price increases in the market.

- Direct the Central Pharmaceutical Corporation 1, Central Pharmaceutical Corporation 2, and Central Pharmaceutical Corporation 3 to immediately implement the next steps of the national drug circulation reserve plan, purchasing sufficient quantities of reserve drugs to adjust promptly when there are price fluctuations.

- Develop and submit to the Minister for issuance the Plan for the Network of Drug Circulation Distribution and Supply and the Plan for Industrial Drug Production to ensure appropriate drug usage needs in line with Vietnam's disease patterns, with stable and reasonable prices.

- Direct the drug testing system from central to local levels to take proactive measures to effectively monitor drug quality, serving the production and supply of drugs to meet disease prevention and treatment requirements.

- Strengthen guidance and enhance the effectiveness of information dissemination and rational, safe, and effective drug use through mass media. Review and adjust the content of the "Healthy Living Every Day" program to align with set objectives.

b) The Ministry of Health Inspectorate directs and organizes comprehensive inspections of the activities of drug trading enterprises nationwide, particularly focusing on major cities such as Hanoi, Ho Chi Minh City, Da Nang, and Hai Phong to prevent speculation, hoarding, unreasonable price hikes, and round-trip drug sales; compliance with Directive No. 05/2004/CT-BYT dated April 16, 2004, on rectifying drug supply and use in hospitals, and strictly handle violations.

c) The Planning and Finance Department should inspect the actual implementation of Circular No. 20/2005/TTLT-BYT-BTC dated July 27, 2005, on guiding the implementation of drug procurement bidding in public health facilities to promptly resolve difficulties and obstacles encountered during implementation.

d) The Treatment Department:

- Continue to effectively implement Directive No. 05/2004/CT-BYT dated April 16, 2004, on rectifying drug supply and use in hospitals.

- Statistically analyze the drug usage needs of hospitals and public healthcare facilities according to pharmacological groups to serve as a basis for planning the development of domestic drug production.

e) The Traditional Medicine Department should statistically analyze the usage needs of traditional medicine in traditional medicine hospitals and healthcare facilities across the country to serve as a basis for planning the development of domestic traditional medicine production.

2. Units directly under the Ministry of Health:

a) Hospitals and healthcare facilities must strictly implement Directive No. 05/2004/CT-BYT dated April 16, 2004, on rectifying drug supply and use in hospitals and Circular No. 20/2005/TTLT-BYT-BTC dated July 27, 2005, on guiding the implementation of drug procurement bidding in public health facilities.

b) The Institute of Quality Control and the Ho Chi Minh City Branch Institute of Quality Control should strengthen sampling and monitoring of drug quality circulating in the market.

3. Provincial Departments of Health have the responsibility to:

- Coordinate with provincial departments and agencies to advise the Chairman of the People's Committee of the province to promote the implementation of measures to stabilize drug prices within their jurisdiction.

- Strengthen inspection and supervision of companies, pharmacies, drugstores, and healthcare facilities within their jurisdiction, and strictly handle cases violating government policies, regulations, and the Ministry of Health's guidelines on drug pricing management.

- Closely direct the bidding process for supplying drugs to public healthcare facilities. Timely report difficulties and obstacles encountered by these facilities during implementation to the Ministry of Health (Department of Planning and Finance).

4. Drug production, trading, and import-export companies shall be responsible for:

- Ensuring sufficient supply of quality, effective, safe, and reasonably priced medicines, without allowing shortages or speculative hoarding that creates artificial scarcity.

- Implementing all measures to stabilize drug prices, researching and applying technological improvements to enhance production efficiency, and thoroughly cutting unnecessary costs to reduce product costs and increase competitiveness in the market to ensure stable supply.

- Strictly comply with government policies and regulations regarding drug pricing. Seriously carry out price declaration, re-declaration, and reporting of drug prices to the competent state authorities according to current regulations.

Upon receipt of this Directive, the heads of units under the Ministry, the heads of subordinate units, provincial Department of Health directors, health sector heads, and directors of drug production, trading, and import-export companies are required to develop specific action plans based on their functions and tasks to implement the contents of this Directive and report results quarterly to the Vietnam National Medicines Administration for consolidation and reporting to the Minister.