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Vietnam determined to lower prices on brand name drugs

Friday, April 07, 2017, 15:46 GMT+7
Vietnam determined to lower prices on brand name drugs
A doctor holds a vial of cancer-treating paclitaxel.

Over half of brand name drugs in Vietnam with expired intellectual property rights are still being sold at exorbitant prices while authorities fail to update their patent status and allow the production of cheaper generic versions of the drug.

Deputy Prime Minister Vu Duc Dam has called for joint efforts from the Ministry of Health and Vietnam Social Insurance (VSI) to tackle the issue and lower drug prices, a move which would benefit both medical patients and the state welfare program.

Brand-name “privilege”

Brand-name drugs are medicines that have been patented by pharmaceutical companies, providing them with protection from copycats.

According to international conventions honored by Vietnam, patents for brand-name drugs are valid for 20 years, after which generic versions, equivalent to a brand-name product in dosage, strength, route of administration, quality, performance, and intended use, are allowed to be produced by other pharmaceutical companies.

According to Nguyen Ta Tinh, head of the pharmacy and medical supplies division at VSI, brand name drugs are currently priced too highly in Vietnam compared to generic, category-one drugs – good quality drugs produced in close observation of European Good Pharmacy Practice (GPP) standards.

“For similar cancer-treating drugs using paclitaxel as the active ingredient, for example, a brand name drug costs VND5 million [US$223] per vial, while a generic category-one drug only costs VND1-3 million [$45-135] per vial,” Tinh said.

VSI vice president Pham Luong Son estimates that a brand name drug can cost between five and seven times higher than its high-quality generic versions, even after its patents have expired.

Despite the patents for over 400 out of 700 brand-name drugs having expired, relevant authorities have been slow to re-categorize them into category-one drugs, a move that has cost patients and the state insurance budget billions of dong.

“It’s not difficult to check the patent status of a brand name drug," a health expert who asked not to be named told Tuoi Tre (Youth) newspaper.

"All it takes is checking if generic versions of the drug are available in Europe, where intellectual property rights are strictly regulated.”

For the past four years, there have only been additions to the list of brand name drugs allowed in Vietnam.

Meanwhile, no drugs have been removed from the list, regardless of their patent status, the expert explained.

Brand name drugs enjoy a range of privileges, he explained, including almost guaranteed wins during pharmaceutical procurements, since the owner of the brand is the only one allowed to produce the patented active ingredient.

This practice has been criticized as one of the reasons for rising medical costs in Vietnam.

“Prior to 2012 when the old regulation on pharmaceutical procurement was still in place, drug related costs covered by medical insurance were at VND10 trillion [$446.43 million] per year,” the expert said.

“This number has tripled in recent years though the amount of people covered by medical insurance couldn’t have tripled in such a short time.”

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The difference in costs of generic versus brand name drugs in Vietnam Dong. Graphic by Tuoi Tre

The best of both worlds

Deputy PM Vu Duc Dam has demanded that a fixed ratio for brand name and generic drugs to be covered by state-run insurance programs be introduced by the Ministry of Health and VSI, with the latter suggesting that the ratio be 7:3 for generic and brand name drugs respectively.

However, the suggestion was met with concerns from practicing doctors, who said the decision on which drugs to be used for specific conditions should rest on the head of the medical institute or those immediately responsible for the patient’s care, rather than being governed by a fixed ratio.

“We are treating a patient with a fungal infection in their lungs, and brand name drugs were safer for use on this particular patient who happens to also have kidney failure,” said a doctor from Bach Mai Hospital in Hanoi.

“Generic drugs would have posed health risks for the patient.”

“If the state insurance budget can’t cover 100 percent of the costs for brand name drugs, it should at least pay the price as if a generic drug has been used instead,” said Hoang Xuan Thanh, a physician at the intensive care unit of a hospital.

“The patient who opts for brand name drugs can cover the rest.”

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