Medicine prices are surging despite the Drug Administration’s order to the pharmaceutical industry to freeze prices through June. According to the Health Ministry, drug prices rose nearly 9% in the first quarter and were likely to keep climbing in coming months due to both world and domestic market conditions.
Despite the Drug Administration’s price controls, retail prices of drugs continued rising this month by 5-10% in
At a drug wholesale center in Ngoc Khanh street, Hanoi, prices of many foreign drugs increased sharply, such as Diamicron, a diabetes treatment drug from France, from VND 118,000/pack to VND 125,000/pack; cold treatment drug Panadol Extra, from VND 72,000/pack to VND 78,000/pack; and antimicrobial drug Rodogyl, from VND 63,000/pack to VND 68,000/pack.
Prices of domestic medicines also rose. For instance, a bottle of cough syrup increased from VND 6,500 to VND 8,500 while multivitamin syrup Kidgrow rose from VND 19,500 to VND 24,000.
Nguyen Xuan Loc, director of a private pharmaceuticals enterprise, said wholesale prices of medicines grew 5% on average.
According to the Hanoi Health Service’s latest survey, prices of many drugs in
The price hikes started after the lunar new year in February when prices of drugs surged on average by 20% compared with previous months, a pharmacist told the Ho Chi Minh City Law newspaper.
The Drug Administration warned that the price hike may continue in May as a result of global price increases, especially rising prices of raw materials from
Drug Administration statistics showed that the prices of pharmaceutical materials rose dramatically on the world market in April, especially materials imported from
Prices of materials for production of tonic and pain relief drugs from
Imported materials currently made up 90% of domestic drug production.
Domestic producers’ investment in applying Good Manufacturing Practice standards also added costs to domestic products, Deputy Minister of Health Cao Minh Quang said.
He cited unfavorable domestic conditions, including epidemic outbreaks, severe weather and inflation, as factors hurting efforts to control domestic prices of medicines in addition to sharp fluctuations on the world market.
In addition, limitations in drug distribution networks drove up intermediary costs of drugs before they reached the hands of users, Mr. Quang said, pointing out that many licensed drug importers chose to import under entrustment to get commissions.
So far this year, the Drug Administration has received applications from 15 local producers for price hikes on 108 drug items, or 0.6% of the total medicines circulated on the domestic market, as a result of rising input costs.
Analysts warned the price increases may trigger a rise in poor quality and fake drugs on the domestic market. According to Drug Administration statistics, drugs failing to meet quality requirements in 2007 accounted for 3.3% of the samples, up 0.12% from 2006, of which drugs made with substandard pharmaceutical materials made up 10.8%.
Central Drug Accreditation Institute Director Trinh Van Lau acknowledged the rates of fake and low-quality medicines were increasing, especially for imported drugs and traditional herbs.
To control drug prices in the future, Deputy Prime Minister Nguyen Thien Nhan suggested setting up a website on domestic prices of drugs, listing prices of all imported drugs, sale prices registered by domestic companies and forms of punishment for violation of pricing regulations.
Mr. Nhan told a national conference of the pharmaceuticals industry in April that drug prices, quality and distribution must be tightly controlled and a price transparency policy adopted, stressing that violations must be strictly sanctioned.
In the long run, to reduce dependence on imports, the health sector must develop domestic production of raw materials, especially of those for production of antibiotics and organic pharmaceutical chemicals for supply to the pharmaceuticals industry.
Deputy Minister Quang also stressed the necessity to increase supply sources and apply standards on good practice in storage and distribution of drugs to retailers nationwide in order to stabilize the domestic market.
The country now has over 39,000 drug retailers which barely meet Good Pharmacy Practice standards in terms of facilities and storage conditions.
According to Health Ministry statistics, there are currently around 20,000 drugs registered for circulation with specialized drugs being mostly imports. Domestic medicines are often commonplace ones of low value.
The country boasts 171 drug producers, 76 of which meet Good Manufacturing Practice standards, accounting for 46%. Sales from domestic production grew from USD 170.4 million in 2001, to USD 475.4 million in 2006 and USD 600.63 million in 2007.
To control drug prices, the Ministry of Health issued a circular in 2007 banning drug producers from raising sale prices of their own free will. A price hike must be approved by an inter-ministerial team which would appraise the reasonability of the price increase based on the producer’s justifications and in light of the entire production process. The team consists of representatives of the Ministry of Finance, the Ministry of Industry and Trade and the Ministry of Health.
Producers who irrationally hike prices would be subject to punishments, ranging from fines to suspension of operation or withdrawal of drug registration papers.
The Ministry of Finance and the Ministry of Health also promulgated a joint circular in November 2007, stipulating that the retail price of each drug must be printed or stuck on its pack and must not be higher than the announced price. However, observance of this regulation remains limited, except for some cosmetics and drugs for external use. (VLLF).-