VietNamNet Bridge – Limited regulation of pharmacies, lack of market information and inefficient domestic production have caused medicine prices to skyrocket over the past few years, according to a recent study by the Social Science Institute.

The study was ordered by the Ministry of Health and received technical support from the World Health Organisation.

The head of the research group, Trinh Hoa Binh, said State administrative agencies consistently failed to provide timely and updated price information on the 12,000 varieties of medicine that circulate on the domestic market.

Domestic pharmaceutical prices have remained high even though pharmaceutical producers and distributors have to report their retail prices to the Drug Administration of Vietnam in addition to posting them on the internet.

The listing of prices, in fact, has been merely a formality, an empty exercise as authorities lack information about the costs of medicines as a reference point, said Binh.

Monopoly in pharmaceutical distribution was also a key factor pushing up medicine prices on the domestic market, according to the study.

Researchers said pharmaceutical importers could raise prices without any control as they held a monopoly on distribution of the imported drugs.

The investigators found the difference in wholesale prices between domestic drugs and those imported by State pharmaceutical companies was 5-8% while the difference between domestic drugs and those imported privately is 50-300%.

Meanwhile, the country depends largely on imported pharmaceuticals as local production has remained restricted.

Due to the consequent dependence on imports, foreign pharmaceutical producers and domestic distributors can fully decide on prices.

The study used Hong Kong as a comparison, noting that monopoly did not exist there and producers needed to adjust their prices to competitive levels.

They also found that, if a new medicine is introduced into Hong Kong, within about a month, the territory's producers can churn out a generic version of the same drug to compete.

The ministries of Health, Finance, and Industry and Trade recently issued a circular to try to get a handle on the situation.

Under the circular, importers are required to make up a list of CIF (Cost plus insurance and freight) prices in Vietnam and in other regional countries so that authorities can determine if prices are unreasonable.

If authorities find that prices are unresonable, the imported medicines will not be allowed to circulate on the domestic market.

(Source: Viet Nam News)