Circular No. 108/2005/TT-BTC guiding the financial mechanism for national drug circulation reserves pursuant to Decision No. 110/2005/QĐ-TTg dated May 16, 2005 of the Prime Minister.

CIRCULAR

Guidelines for the financial mechanism regarding national drug circulation reserves

pursuant to Decision No. 110/2005/QĐ-TTg dated May 16, 2005 of the Prime Minister

Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to Decree No. 170/2003/NĐ-CP dated December 25, 2003 of the Government detailing the implementation of the Price Ordinance;

Pursuant to Decree No. 196/2004/NĐ-CP dated December 2, 2004 of the Government detailing the implementation of the National Reserve Ordinance;

Pursuant to Decision No. 110/2005/QĐ-TTg dated May 16, 2005 of the Prime Minister approving the Plan "national drug circulation reserve serving disease prevention and treatment for the people";

To strengthen management and effective use of state budget funds supporting pharmaceutical enterprises assigned the task of national drug circulation reserve serving disease prevention and treatment for the people, the Ministry of Finance issues guidelines on the financial mechanism for national drug circulation reserve pursuant to Decision No. 110/2005/QĐ-TTg dated May 16, 2005 of the Prime Minister as follows:

I. GENERAL PROVISIONS

Article 1. This Circular guides the financial mechanism for national drug circulation reserve serving disease prevention and treatment for the people.

Article 2. The regulated subjects of this Circular are state-owned pharmaceutical enterprises that meet the conditions stipulated and are designated by the Ministry of Health to implement the national drug circulation reserve serving disease prevention and treatment for the people pursuant to Decision No. 110/2005/QĐ-TTG dated May 16, 2005 of the Prime Minister.

Article 3. The scope of application of this Circular covers all drug items included in the list of drugs for circulation reserve as prescribed by the Minister of Health.

Article 4. Enterprises assigned the task of drug circulation reserve must ensure the quantity and quality of drugs and manage and use the state-supported funds in accordance with the regulations.

II. SPECIFIC PROVISIONS

Clause 1. Documents for requesting interest rate support for bank loans for drug circulation reserve and price difference subsidy:

Clause 1.1. Documents for requesting interest rate support for bank loans for drug circulation reserve:

- A letter from the pharmaceutical enterprise assigned the task of drug circulation reserve requesting interest rate support for bank loans for drug circulation reserve sent to the Ministry of Finance (with confirmation from the Ministry of Health).

- The decision of the Ministry of Health assigning the task of drug circulation reserve to the enterprise (containing full information on: types of drugs, quantities, storage period...).

- Purchase contracts for drugs to be put into reserve (types, quantities, purchase prices).

- Loan agreements with banks (detailed schedule: loan amount, loan term, interest rate...) corresponding to the quantity and duration of the assigned drug reserve.

- Other relevant documents.

Clause 1.2. Documents for requesting price difference subsidy:

- A letter from the pharmaceutical enterprise assigned the task of drug circulation reserve requesting price difference subsidy sent to the Ministry of Finance (with confirmation from the Ministry of Health).

- The decision of the Ministry of Health selling drugs to stabilize market prices and supplying drugs to state hospitals when there is a shortage of treatment drugs (types of drugs, quantities, selling prices).

- Purchase contracts for drugs to be put into reserve (types, quantities, purchase prices).

- Other relevant documents.

Clause 2. Procedures for issuing and settling the support interest rate for bank loans for drug circulation reserve and price difference subsidy:

Pursuant to Point 3.4, Article 1 of Decision No. 42/2004/QĐ-BTC dated April 22, 2004 of the Minister of Finance on the issuance of regulations on central budget expenditure by cash order, the support interest rate for bank loans for drug circulation reserve shall be issued by cash order.

After verifying the legality and reasonableness of the data in the documents submitted by the enterprise, the Ministry of Finance will determine the amount of price difference subsidy and interest rate support for bank loans, and directly issue them to each enterprise (interest on bank loans is paid every six months).

Enterprises must report the settlement to the Ministry of Health on the import, export of reserved drugs, excess or shortage of allocated funds... during the year.

The Ministry of Health is responsible for reviewing and approving the settlement for enterprises and compiling it to send to the Ministry of Finance before February 15 of the following year.

III. IMPLEMENTATION

This Circular takes effect fifteen days after its publication in the Official Gazette.

During the implementation process, if any difficulties arise, please promptly reflect them to the Ministry of Finance for research, amendment, and supplementation./.