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Drugs producible at home still imported
Multiple types of generic drugs are still being imported into Vietnam even though they can be produced by local firms, said Do Van Dung, deputy head of the pharmaceutical management division of the HCMC Department of Health.
He ascribed this situation to the lax registration requirements for drug circulation in Vietnam. To get a circulation visa for an imported drug, the importer just needs to register with the pharmaceutical management department under the Ministry of Health. What is more, the current import tariffs are not favorable for local drug producers. Most imported drugs are subject to a 5% duty.
Many local firms have adopted WHO’s Good Manufacturing Practice (GMP-WHO), but they are facing an intense price competition from products imported from India, South Korea, China, and even the countries whose pharmaceutical sector is not at all strong globally like Colombia and Bangladesh, said Dung. He was speaking at a workshop on competition in the local pharmaceutical market held by the Vietnam Competition Authority this Wednesday with assistance from the Japan International Cooperation Agency (JICA).
There are 180 drug manufacturing companies nationwide, with 113 factories following GMP-WHO. In HCMC, there are 25 drug plants conforming to GMP-WHO, Good Laboratory Practice (GLP), and Good Storage Practice (GSP).
The city-based GMP-WHO plants worth some VND80-350 billion each focus on making drugs for specific treatment and producing under license from large pharmaceutical companies like GSK and Sanofi. Each plant produces 50-200 types of product, mostly generic drugs for treatment of common diseases, such as analgesics, antipyretics and antibiotics. They mainly import materials, so they can hardly have independence and ensure stable prices.
Generic drugs are produced when industrial property rights of patent medicine have expired, so they are usually cheap.
Due to overlapping products, local drug makers are competing with one another. In addition, they have to compete with those buying generic drugs from India, South Korea and China.
The market is highly competitive, yet drug plants are designed with large capacity. Thus, many factories in HCMC are currently operating at 30-40% capacity. If they ran at full capacity, there would be oversupply, Dung told the Daily on Thursday.
The products of local pharmaceutical companies mainly serve the domestic market, while their exports are still modest due to certain difficulties. To export drugs, enterprises must conduct bioequivalence tests in the importing country, according to the regulations of a number of countries in the region.
Enterprises have difficulty meeting this requirement, said Dung. It is because the cost of bioequivalence testing is high (about VND350 million per product), but there is no guarantee the tested drugs will be bioequivalent to ones they are compared with, he explained.
There are now 879 drug trading companies and over 4,200 drug retailers in HCMC. Trading among drug firms has pushed up prices of pharmaceutical products, he said.
In 2012, locally-made drugs accounted for half of the total consumption in Vietnam, and only 39.7% of the drugs for illness treatment.
On average, each Vietnamese spent US$0.3 on drugs in 1989 but the figure shot up to US$25 in 2012. Up to 72% of the total spending on drugs came from financial resources of families.