Joint Circular No. 20/2005/TTLT/BYT-BTC guiding the implementation of bidding for drug supply in public healthcare facilities

JOINT CIRCULAR

Guidelines for Implementing Bidding for Drug Supply

in Public Health Facilities

Pursuant to the Tender Regulations issued together with Decree No. 88/1999/NĐ-CP dated September 1, 1999, and subsequent amendments and supplements to the tender regulations issued together with Decrees No. 14/2000/NĐ-CP dated May 5, 2000, and No. 66/2003/NĐ-CP dated June 12, 2003 of the Government;

Pursuant to Decree No. 120/2004/NĐ-CP dated May 12, 2004 of the Government on the management of drug prices for disease prevention and treatment;

To enhance management and effective use of funds from public health facilities for purchasing drugs, chemicals, infusions, biological products, consumable materials serving medical examination and treatment needs and disease prevention, the Ministry of Health and the Ministry of Finance hereby issue guidelines for implementing bidding for drug supply, chemicals, infusions, consumable materials, and biological products for public health facilities as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Scope of application:

a) Public health facilities using state budget funds and other lawful sources (referred to collectively as the state budget) as prescribed to purchase drugs, chemicals, infusions, consumable materials (collectively referred to as drugs) to meet medical examination and treatment and disease prevention needs, with total annual funding of VND 200 million or more for central-level public health facilities; VND 100 million or more for provincial-level public health facilities under centrally-administered cities; and VND 50 million or more for district-level public health facilities must organize open, restricted, or competitive bidding according to the Government's Tender Regulations and specific provisions set forth in this Circular.

b) For public health facilities with total annual state budget funding for drug purchases below the aforementioned thresholds, the heads of such units shall decide on appropriate procurement methods that are efficient, which may include competitive bidding, direct procurement based on the results of previous tenders (within one year) for drug items from other public health facilities in the same locality.

2. Scope of Application for Tenders and Procurement: This applies to all drug items (except those specified in Point 3 below) used in public health facilities.

3. This Circular does not apply in the following cases:

a) Purchasing drugs, chemicals, vaccines, biological products ordered by the State and paid for with state budget funds; providing blood and blood substitutes. Management and procurement of these items shall be carried out in accordance with Circular No. 05/2004/TT-BTC dated January 20, 2004 of the Ministry of Finance guiding the management of goods and services ordered by the State and paid for with state budget funds.

b) Traditional and herbal medicines (excluding finished products).

II. SPECIFIC PROVISIONS

1. When organizing tenders for drug purchases, public health facilities must comply with the Tender Regulations issued together with Decrees No. 88/1999/NĐ-CP dated September 1, 1999, and subsequent amendments and supplements to the tender regulations issued together with Decrees No. 14/2000/NĐ-CP dated May 5, 2000, and No. 66/2003/NĐ-CP dated June 12, 2003 of the Government; Circular No. 121/2000/TT-BTC dated December 29, 2000 of the Ministry of Finance guiding the implementation of tenders for procurement of office supplies, materials, equipment, and work tools funded by the state budget. Additionally, they must adhere to the following requirements:

a) Preparing and approving tender plans for drug purchases:

- Based on the annual budget estimates assigned by the competent authority, the heads of public health facilities are responsible for preparing tender plans for drug purchases and submitting them for approval by the competent authority: the Minister, head of a ministry equivalent to a ministry, or government agency approves for central-level public health facilities; the Chairman of the People's Committee of a province or centrally-administered city (or their authorized representative) approves for local public health facilities.

- In the document submitted for plan approval, the following contents must be clearly explained:

+ The method of selecting contractors and the tendering method applied to each tender package or item.

+ The annual budget plan for drug purchases.

+ The quantity and value of drug items to be tendered in each tender package by generic name. If it is a multi-component drug, all components must be listed by generic name.

+ The quantity and value of drug items to be tendered in each tender package by brand name.

+ The time frame for organizing each tender.

+ The type of contract for drug items.

+ The contract execution period.

- The tender plan should be prepared for six months or the entire year and submitted to the competent authority for approval no later than January or June of each year.

- The approval of the tender plan shall not exceed seven working days from the date of receipt of complete documentation.

b) The tender price in the tender plan for drug items when preparing the tender plan:

- The entities entrusted with organizing tenders for drug purchases shall base the tender price on the prevailing retail prices of various drugs in the market and refer to the price announcements of the Vietnam Drug Administration - Ministry of Health, and the price range for certain essential drugs prescribed by the State, to establish the tender price in the tender plan for submission to the competent authority for approval. The price of drug items in the tender plan must not exceed the prevailing retail price of the same drug item in the market at the same time.

c) Preparing the tender invitation document, contents of the tender invitation document, and approving the tender invitation document shall be carried out in accordance with the Government's Tender Regulations issued together with Decrees No. 88/1999/NĐ-CP dated September 1, 1999, No. 14/2000/NĐ-CP dated May 5, 2000, and No. 66/2003/NĐ-CP dated June 12, 2003 of the Government. Additionally, the following provisions shall be added to the tender invitation document for drug purchases:

- A contractor may participate in one or multiple drug items within a tender package if they have the capacity to supply.

- The tenderer shall evaluate tender documents separately for each drug item within each tender package.

- The name of the drug stated in the tender invitation must be the generic name. If tendering for a mixed drug with multiple components, all components of the drug must be listed according to their generic names. In cases where the tender is invited under the brand name, such procurement must be decided by the competent authority based on the provisions of the law approved on the basis of opinions from the heads of healthcare facilities after obtaining the consensus of the Drug and Treatment Council of the unit and being approved in the annual tender plan. The head of a public health facility must bear responsibility for their decision.

- Quantity, concentration, units of measurement, packaging specifications, and form of preparation for each item of medicine.

- Requirements for drug quality:

+ Must comply with the quality standards registered with the Vietnam National Medicines Administration.

+ Test certificates for each batch of drugs as prescribed.

+ A valid Good Manufacturing Practice (GMP) certificate issued by the competent authority for the manufacturing plant.

+ A product circulation permit issued by the competent authority for the sale of products in Vietnam.

+ For imported drugs: must have a circulation permit from the country of production.

+ Expiry date: at least 18 months remaining for drugs with an expiry period of three years or more; at least 12 months remaining for drugs with an expiry period of two years or less (counted from the delivery date).

+ Drug label: in accordance with labeling regulations, including a Vietnamese language drug usage guide (including imported drugs).

- The successful bidder must:

+ Commit to recalling the drug if it does not meet quality standards or has been recalled by the competent authority, and the cause is not due to the fault of the tenderer;

+ Commit to supplying the drug at the bid price (including cases where drug supply contracts are executed in multiple batches throughout the year);

+ Commit to the supply schedule.

d) The tender period shall be determined based on the quantity requirements, and the entity may organize tenders at least once every six months during the year.

đ) Tender participation conditions: entities and individuals belonging to various economic sectors (including foreign companies or joint ventures permitted to establish and operate under Vietnamese law) who meet the conditions stipulated in Point 3, Section II of Circular No. 121/2000/TT-BTC dated December 29, 2000, issued by the Ministry of Finance, and specific conditions below, are eligible to participate in the tender:

- Possess a business license for pharmaceuticals issued by the competent authority;

- Have the capability to supply and ensure drug quality when drug supply is carried out in multiple batches throughout the year;

- Submit a tender bond as required by the tender organizing body before the tender closing time;

- Use valid sales invoices issued by the financial authority.

e) Tender results: The winning bid price must not exceed the tender package price in the approved tender plan and the retail price commonly available on the market at the time of the tender.

2. In cases where additional quantities of certain items of drugs within the tender plan are needed during the year, the entity may apply direct procurement methods as stipulated in Point 2, Section III of Circular No. 121/2000/TT-BTC dated December 29, 2000, issued by the Ministry of Finance.

3. In cases where additional quantities of certain items of drugs not included in the tender plan are needed during the year, with small quantities and low total value (under VND 10 million), the heads of public health facilities may choose procurement methods such as competitive bidding or designated tendering based on the results of previous tenders (within one year) of other public health facilities in the same locality, ensuring that the purchase price does not exceed the winning bid price and bearing responsibility for their decisions.

4. Responsibilities for reviewing and approving the tender plan and tender results:

The Minister, head of a ministry-level agency, or agency under the Government (for public health facilities directly under the Ministry of Health); the Chairman of the People's Committee of provinces or centrally-administered cities or their authorized representatives (for local public health facilities) shall approve the tender plan and tender results based on the review of relevant assisting units.

III. INSPECTION AND HANDLING OF VIOLATIONS

Inspection of drug tender supply at public health facilities is regulated as follows:

1. The Ministry of Health's Inspectorate shall conduct inspections of drug tender supply at public health facilities directly under the Ministry of Health; Inspectorates of other ministries and sectors shall inspect drug tender supply at public health facilities under their central management; Provincial Health Department Inspectorates shall organize inspections of drug tender supply activities within public health facilities in their jurisdiction.

2. Inspection organizations shall be conducted according to plans approved by the Minister of Health, heads of ministries and sectors, Chairmen of provincial or centrally-administered city People's Committees (or their authorized representatives); when there are signs of violations of tender laws; upon request from inspection bodies mentioned in Clause 1, Section III of this Circular; or when requested by the Minister of Health and other ministries and sectors, or the Director of the Provincial Health Department regarding specific tender supply cases.

3. The content of inspections shall be carried out in accordance with the provisions of Section 4, Clause 25, Article 1 of Decree No. 66/2003/NĐ-CP dated June 12, 2003, of the Government amending and supplementing some articles of the Tender Regulations promulgated together with Decree No. 88/1999/NĐ-CP dated September 1, 1999, and Decree No. 14/2000/NĐ-CP dated May 5, 2000, of the Government.

4. Handling of violations: During the inspection process, if violations are discovered, the inspectorate will impose penalties according to the functions prescribed in the state's inspection law, depending on the nature of the violation.

IV. IMPLEMENTATION

1. Annually, every six months, the Ministry of Health (Vietnam National Medicines Administration) publishes and notifies public health facilities about import prices, retail prices (for imported drugs), factory prices, and retail prices (for domestically produced drugs) for all types of drugs approved for circulation in Vietnam through mass media.

2. Public health facilities directly under the Ministry of Health and those managed by central ministries and sectors shall organize drug tender supply in accordance with the regulations.

3. For healthcare facilities under local administration: The Department of Health bases on the usage needs of healthcare facilities under local administration to submit for consideration and decision by the Chairman of the People's Committee of the province or centrally governed city to choose one of the following three forms:

a) The Department of Health organizes centralized bidding for types of medicines with regular, stable demand and large quantities for all public healthcare facilities under local administration. Public healthcare facilities under local administration base on the bidding results to sign supply contracts for medicines according to their needs.

b) The Department of Health directs one of the provincial general hospitals to organize bidding to purchase medicines in the first quarter of each year. Other units within the provincial area apply the bidding results to sign medicine purchase contracts with the successful bidder or organize their own bidding but the winning bid price must not exceed the winning bid price of the provincial general hospital designated by the Department of Health to organize the bidding. As for public healthcare facilities in remote, mountainous areas, islands, the supply price of medicines does not include reasonable transportation costs.

c) Assign public healthcare facilities to organize bidding to supply medicines according to their usage needs. The winning bid price must not be higher than the tender package price approved in the bidding plan and the prevailing retail price of the same medicines on the market at the time of bidding.

4. Handling transitional issues after the issuance date of this Circular:

a) For tenders that have issued tender documents before the effective date of this Circular, they shall be implemented according to the bidding regulations and supplementary bidding regulations issued along with Decrees No. 88/1999/NĐ-CP dated September 1, 1999, No. 14/2000/NĐ-CP dated May 5, 2000, and No. 66/2003/NĐ-CP dated June 12, 2003 of the Government and guiding documents.

b) For tenders that issue tender documents after the effective date of this Circular, they shall be implemented according to this Circular.

5. Public healthcare facilities report in writing to the superior management authority every six months and annually on the implementation of bidding for purchasing medicines.

6. Annually, Ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees, and centrally governed city People's Committees are responsible for compiling and submitting reports on the implementation of bidding and purchasing medicines of their respective ministries and localities to the Ministry of Finance and the Ministry of Health before December 31 for consolidation and reporting.

7. The Minister, head of a ministry-level agency, head of a government-affiliated agency, and Chairmen of People's Committees at all levels decide and organize inspections of bidding and purchasing medicines according to current bidding regulations and guidance provided in this Circular for units under their jurisdiction.

8. Financial authorities at all levels are responsible for coordinating with health authorities at the same level to regularly and randomly inspect the implementation of bidding and purchasing medicines by units under their jurisdiction.

9. This Circular takes effect 15 days from the date of publication in the Official Gazette. Any difficulties encountered during implementation should be reported to the relevant ministries for examination and resolution./.