Joint Circular No. 11/1998/TTLT-BYT-BTC-BVGCP guides the management, distribution, use, and recovery mechanism for essential medicines under the National Health Support Project and the Population and Family Health Project.

CIRCULAR

JOINT CIRCULAR OF THE MINISTRY OF HEALTH - MINISTRY OF FINANCE - NATIONAL ECONOMIC COMMITTEE NUMBER 11/1998/TTLT-BYT-BTC-BVGCP AUGUST 15, 1998 GUIDING THE MANAGEMENT REGIME, DISTRIBUTION, USE AND MECHANISM FOR RECOVERY OF CAPITAL FOR ESSENTIAL MEDICINES UNDER THE NATIONAL HEALTH SUPPORT PROJECT AND POPULATION AND FAMILY PLANNING PROJECT

To implement the directive of the Prime Minister in Circular No. 625/CP-QHQT dated June 6, 1998 regarding the mechanism for recovery of essential medicines from the two projects: The National Health Support Project of the Ministry of Health and the Population and Family Health Project of the National Committee on Population and Family Planning, the Joint Ministries of Health, Finance, and the Government Price Board guide the management regime, distribution, use, and mechanism for recovery of capital for essential medicines under the aforementioned two projects as follows:

I. GENERAL PROVISIONS

1. All sources of funds from the National Health Support Project and the Population and Family Health Project (referred to as the Two Projects) allocated to purchase essential medicines are state budget funds provided to support the implementation of the national health care strategy and population planning strategy..

2. This Circular applies to the management, distribution, use of essential medicines and the mechanism for recovery of capital for essential medicines under the aforementioned Two Projects with the aim of maintaining a medicine fund, ensuring sufficient medicines to meet the needs of medical examination and treatment for the people, and not for profit-making purposes.

3. The quantity of essential medicines purchased using funds from the Two Projects must be used for their intended purpose and managed according to the current regime of the State.

4. Essential medicines are supplied to all target groups in the provinces covered by the Two Projects (with payment or without payment) through medical examination and treatment services at district, county, city town health centers and village health stations (referred to as medical examination and treatment facilities). Strictly prohibit medical examination and treatment facilities and healthcare personnel from selling essential medicines from the Projects in any form.

5. The recovered capital from the provision of medicines with payment from the Two Projects above shall be retained by healthcare facilities within the scope of the Two Projects to establish a revolving drug fund to serve community medical examination and treatment work. 6. The Ministry of Health and the National Committee on Population and Family Planning have the responsibility to jointly with the People's Committees of provinces under the Two Projects inspect and supervise the implementation of the contents and purposes agreed upon between the Government of Vietnam and international organizations.

II. SPECIFIC PROVISIONS

1. Plan formulation:

Based on the annual loan capital plan approved by the Government, the formulation of the essential medicine supply plan for the Two Projects is carried out in the following sequence:

The provincial project management boards coordinate with the Department of Health to prepare the projected essential medicine supply plan for each medical examination and treatment facility and submit it to the Central Project Management Board for approval and consolidation (the source of the National Health Support Project sends to the Central National Health Support Project Management Board - Ministry of Health; the source of the Population and Family Health Project sends to the Central Population and Family Health Project Management Board - National Committee on Population and Family Planning). The Central Project Management Boards are responsible for consolidating the projected essential medicine supply plans of the provinces under the Project and calculating their value based on the approved annual loan capital plan to report to the supervisory authority. The Ministry of Health, the National Committee on Population and Family Planning consolidate the project plan into the unit's annual loan capital plan to send to the Ministry of Finance and the Ministry of Planning and Investment for consolidation.

2. Distribution of medicines to healthcare facilities

2.1. Medicine handover.

After completing the tender procedures for purchasing medicines at the Central Project Management Boards, the Two Projects are responsible for handing over the medicines to the Department of Health through the logistics system of the Two Projects to provide medicines to medical examination and treatment facilities in the provinces under the Project according to the approved quantities.

2.2. Record keeping, monitoring, reporting:

District, county, city town health centers, maternal and child health centers - family planning centers, and village health stations (referred to as healthcare facilities) separately track the medicines received from the Two Projects mentioned above, monthly and quarterly reporting to the Department of Health the quantity of medicines distributed and the recovered capital from the essential medicines according to the form attached to this Circular.

2.3. Handling slow-turnover medicines.

For specific types of medicines, they may be slow-turnover at one medical examination and treatment facility but fast-turnover at another. To avoid the situation where slow-turnover medicines remain in stock for a long time at medical examination and treatment facilities affecting the quality and expiration date of the medicines, based on the monthly and quarterly reports of healthcare facilities, district, county, city town health centers under the Project have the right to transfer slow-turnover medicines of the Project between villages and wards within the district, county, city town. Provincial Departments of Health of the Two Projects have the right to transfer slow-turnover medicines between districts, counties, and city towns within the province. The transfer of slow-turnover medicines is based on the principle of asset transfer (medicines and their monetary value). The transferring party records a reduction in capital, the receiving party records an increase in capital. Transportation fees are agreed upon by both parties.

3. Method of distributing medicines to patients and recovering medicine fees:

3.1. Method of distributing medicines to patients:

Patients (regardless of whether they need to pay for medicines or not, inpatient or outpatient treatment) are all provided with essential medicines according to the treatment prescription of doctors or medical practitioners examining and treating them.

3.2. Groups eligible for free essential medicines include:

 Groups specified in Point B, Part II of the Joint Circular No. 14/ TTLB dated September 30, 1995 of the Joint Ministries of Health, Finance, Labor, Invalids and Social Affairs, and the Government Price Board "Guiding the Implementation of Partial Hospital Fees":

- Children under six years old.

- People suffering from schizophrenia, epilepsy, leprosy, pulmonary tuberculosis.

- People living in highland areas recognized by the Ethnic Minorities and Mountainous Areas Committee.

 - Ethnic minorities engaged in land reclamation and construction of new economic zones for three years from the date of arrival.

- Disabled persons, orphans, elderly people without support, and patients in extreme poverty certified by the Labor, War Invalids, and Social Welfare Office of the district or county.

.- Persons holding a "free medical examination and treatment" card

3.3. Groups required to pay for essential medicines:

Includes all objects not listed in Part 3.2 above.

3. 4. Method of recovering essential drug funds:

The recovery of essential drug funds distributed to patients shall be carried out in accordance with current regulations on organizing the collection of part of hospital fees, specifically as follows:

* Using invoices and receipts for hospital fee collections according to models issued by the Ministry of Finance.

* Payment methods for drugs:

- Patients without health insurance must pay directly to the healthcare facility.

- Patients with health insurance will have their costs covered by the health insurance agency for the healthcare facility.

Healthcare facilities are not allowed to allocate 25 - 28% for rewards as stipulated in Point 2, Part V of Circular Joint No. 14/TTLB dated September 30, 1995 "guidelines for collecting part of hospital fees" from the recovered essential drug funds under these two projects.

3. 5. Price of essential drugs provided to patients:

Essential drugs supplied by the two projects are imported through international competitive bidding, thus the import price may be higher or lower than the market price of similar drugs currently sold in Vietnam. Therefore, the recovery price will be adjusted to align with local market prices and patient payment capabilities in accordance with Circular No. 06/TTLB dated July 10, 1993 of the Joint Board of Government's Price Control Office and the Ministry of Finance regarding "Management of goods and services subject to subsidized policies and orders from the State Budget in the fields of culture, information, health, education, training, and sports." Pricing principles:

- For types of essential drugs that are available on the local market, the recovery price of project drugs shall be calculated based on the market price of the same type of drug.

- In cases where there are no comparable or similar items for comparison, the recovery price shall be determined as follows:

Recovery price = CIF price (or EXW price) + 10%

(CIF price is the international competitive bidding price at Vietnamese ports, EXW price is the factory price at pharmaceutical establishments in Vietnam; 10% is calculated based on CIF or EXW price)

The People's Committee of the province establishes a Drug Pricing Council comprising representatives from:

+ Provincial People's Committee

+ Department of Health

+ Department of Finance and Prices

In cases where there is a price fluctuation of more than 5% on the market compared to the project's recovery price, healthcare facilities shall promptly report to the Drug Pricing Council for review and adjustment.

3. 6. Management and use of recovered drug funds:

The reflection of sources on the books of healthcare facilities is the value of drugs according to the CIF price transferred by the two Projects to the Department of Health in Vietnamese Dong based on the accounting exchange rate specified by the Ministry of Finance at the time of import. After the Drug Pricing Council determines the price, the Department of Health distributes drugs to healthcare facilities according to the price determined by the Drug Pricing Council. If the pricing council's decision is higher than the announced price of the project, the Department of Health records an increase in the source for the drug fund; conversely, it records a decrease in the source for the drug fund by the difference. Healthcare facilities can only recover drug funds according to the price announced by the local Drug Pricing Council. All recovered funds from essential drugs at healthcare facilities are retained at 90% to supplement the operating budget and maintain the drug fund for healthcare; the remaining 10% is allocated for transportation, allowances for pharmacy supervisors, medical staff, and management work. (These expenses are decided by the head of the healthcare facility). From the next cycle onwards, the Departments of Health under the two Projects, Centers for Maternal and Child Health - Family Planning, Project Management Boards at the provincial level, and healthcare facilities will manage and implement steps as prescribed in this Circular. When planning, provinces under the two Projects only plan to supplement the portion of essential drugs provided free of charge to the subjects as stipulated in Point 3.2 of this Circular. Healthcare facilities can still use 10% of the total recovered funds for transportation, allowances for pharmacy supervisors, medical staff, and management work. Specifically, the 90% supplementary funds for the revolving drug fund, healthcare facilities purchase drugs themselves to replenish their own drug fund but must comply with current state regulations on domestic goods trading.

Accounting, reporting, and settlement procedures:

The entire value of essential drugs provided by the two Projects to healthcare facilities is considered as assets handed over by the Projects to the locality for management and use in accordance with the content and objectives approved by the Government. When handing over drugs to the Departments of Health under the Projects, the Ministry of Health and the National Committee for Population and Family Planning are responsible for settling accounts with the Ministry of Finance.

The Department of Health is the coordinating body working with the Project Management Boards at the provincial level, urging healthcare facilities to report monthly on the operation of the drug fund according to the following contents:

- Quantity and value of drugs provided free of charge.

- Value of recovered drug funds.

- Inventory status (including quality analysis and expiration dates) and slow-moving drugs.

- Management and use of 10% for management and service costs. Quarterly, the Department of Health summarizes and evaluates the implementation of project management and execution in the locality, draws lessons, and formulates plans for the next quarter.

5. Supervision and inspection:

5. 1. The Central Project Management Board and the Departments of Health, and the Project Management Boards at the provincial level are responsible for coordinating with the Departments of Finance and Prices in the provinces to regularly or unexpectedly inspect and supervise the distribution, use of essential drugs, and the recovery of drug funds at healthcare facilities under the Projects.

5. 2. The Joint Board of the Ministry of Health, Ministry of Finance, and the Government's Price Control Office will conduct regular or unexpected inspections of the management, distribution, and use of essential drugs at facilities under the two Projects.

5. 2. The Ministry of Health - Ministry of Finance - Government Price Control Board shall conduct regular or surprise inspections of the management, distribution, and use of essential medicines at facilities under the two Projects.

III. IMPLEMENTATION PROVISIONS

This Circular takes effect fifteen days after the date of issuance. During implementation, any difficulties should be reported by the Central Project Management Boards, the Provincial Departments of Finance and Prices, and the Provincial Health Departments to the Joint Ministries for timely supplementation and amendment.