Beneath pharma growth, a problem

Unpredictable pricing

Avastin is a medicine used to treat certain types of brain tumour, and cancers of the kidneys, lungs, colon, rectum, cervix, ovaries, and Fallopian tubes.

The pharmaceutical firm that distributes the drug, Vimedimex 2, has some levels of pricing for the same 100mg/4ml bottle, though all have be-vacizumab as their active ingredient.

A vial of Avastin 100mg/4ml, with a registration number of VN1-131-09 and manufactured by F.Hoffmann-La Roche Ltd, can cost VND8,285,865 (US$376,63), VND7,762,545 (US$352,483), and VND7,173,810 (US$326,082).

Avastin’s price differences are not the only ones in the Vietnamese market, especially among speciality medicines for cancer treatment.

For a 440mg vial of the medicine Herceptin IV, used to treat certain types of breast cancer and stomach cancer, one can pay VND46.597 million (US$2,118) per bottle at a drugstore in Ho Chi Minh City’s Tan Binh district. At another drugstore in the city’s Tan Phu district, the price is even higher, VND49 million (US$2,227).

However, when reported to the Ministry of Health (MoH), the price is VND45,596,775 (US$2,072). Thus, the price difference can reach over VND3.4 million (US$154.50) per bottle.

In another case, the price of Metalyse Inj. 50mg/10ml, used to treat adults suspected of having an acute myocardial infarction and made by Boehringer Ingelheim, is reported to MoH at VND25,748,100 (US$1,170). However, in fact, the product’s price on the market is VND1-2 million (US$45.45-90-90) higher on average.

In the context of confused pharmaceutical pricings in the local market, and in response to a recent press query about the medicine pricing situation in 2016, MoH Minister Nguyen Thi Kim Tien said that ‘As compared to the previous years, in 2016, the local pharmaceutical market was stable, with medicines sufficiently provided for the public.”

According to Tien, over the past months, in order to implement the Law on Pharmacy, the ministries of Health, Finance, and Industry and Trade have had close control over the domestic pharmaceutical market. MoH has focused on managing medicine prices for state-run hospitals through transparent and competitive bidding. And medicine prices in the market are supposedly strictly supervised via forcing drugstores to declare product prices.

Burden on the poor

The uncontrolled medicine pricing situation is not only seen in speciality medicines, but also in other types of pharmaceutical products. Product prices vary in every hospital due to different bids, and also in drugstores due to different distribution networks with variable costs. However, end-users are the ones who suffer.

For instance, 72-year-old farmer Tran Van Ve in the southern province of Tien Giang’s Cai Lay district was recently hospitalised in Ho Chi Minh City due to his failing health. After examination, he was found to suffer from final-stage leukocyte cancer.

For treatment, Ve needed Glivec, a medicine used for blood cancer treatment, and manufactured by Novartis Pharma. The medicine’s price is very high, with a treatment cost of VND48.5 million (US$2,204) per month.

“We cannot afford it, though we have sold off our house, land, and assets,” Ve said.

In another case, Nguyen Thi Be, 40, from the southern province of Dong Nai’s Dinh Quan district, said her father, who is suffering from lung cancer, will need VND150-200 million (US$6,818-9,090) per year for the treatment. “The medicine’s price is bloody expensive. We are very poor and are exhausted,” Be said.

According to tong Thi Song Huong, head of MoH’s Health Insurance Department, it is very costly to treat cancer, at VND500 million (US$22,727) per year for Glivec, VND40 million (US$1,818) per month for Erlotinib (used to treat non-small cell lung cancers), VND118 million (US$5,363) per month for Sorafenib (used to treat advanced renal cell cancer), and VND85 million (US$3,863) per month for Tasigna (used to treat a type of blood cancer called Philadelphia chromosome positive chronic myeloid leukaemia).

Price inflation

Vietnam currently has more than 2,000 pharmaceutical product distributors, over 100 medicine importers, and over 40,000 drugstores. Medications are routinely traded via many intermediaries, with prices increasing dramatically.

Pham Khanh Phong Lan, vice director of the Ho Chi Minh City Department of Health (DoH), ascribed the high prices to collusion between drug manufacturers and distributors. Furthermore, she said, medicines are also circulated through dozens of intermediary channels.

Nguyen Sy Cuong, member of the National Assembly’s Committee for External Affairs, also attributed the high prices to monopolies in drug import, which are traded via many intermediary firms.

Dr. Le Tuan Thanh from the National Cardiovascular Institute said that speciality medicines are quite expensive because Vietnam is still unable to produce originators, and have to import them. For this it depends on international pharmaceutical firms, which have spent vast sums researching the medicines.

However, the main reason, Thanh said, is the harsh competition of interest groups established by monopolistic manufacturers and secondary-level distributors. All of them want to pay doctors and medicine vendors high commissions.

But finally, it is the patients and local health insurance agencies that have to pay for the high prices.

Consequently, Vietnam’s health insurance system has been heavily affected. When patients cannot afford speciality medicines, they rely on health insurance. But the country’s health insurance system is facing a very high payment rate of 10-20% per year, especially amid a limited state budget.

The Ho Chi Minh City DoH’s Lan claimed that the government has appropriate policies in place for dealing with such problems.

“Speciality medicines should only be used for serious treatments. In other cases, generic medicines can be used, as they produce the same treatment results,” Lan said.

It is estimated that Vietnam’s pharmaceutical market is valued at about US$4.5 billion, of which US$2.56 billion is spent on imported medicine.

In search of a cure

It has been suggested that the government closely control pharmaceutical bidding in the local market, and seek measures to replace speciality medicines with bio-equivalent ones.

Vu Thi Thuan, chairwoman of Traphaco JSC, one of Vietnam’s largest pharmaceutical firms, said that in the long term, Vietnam needs to self-produce original and speciality medicines, bolstered by support from the government.

According to Thuan, when medicine copyrights elapse, and if local firms receive the technology transfer needed to make medications, the market will begin to benefit from cheaper pricing. And the poor will have greater opportunity to use speciality medicines for their disease treatment.

Deputy Prime Minister Vu Duc Dam recently released a document requiring MoH to work with the Vietnam Social Insurance to amend and supplement regulations on purchasing off-patent medications, in order to reduce medicine prices via open bidding.

Dam also asked MoH to direct hospitals to replace off-patent originals with Group 1 generic medicines that meet the treatment requirements of MoH’s treatment list.

According to the National Cardiovascular Institute’s Dr. Thanh, doctors should carefully consider the use of medications based on patient income. More importantly, local authorities must devise solutions to stem collusion among pharmaceutical distributors and manufactures.

Also, Thanh said, the government should invest more into supporting domestic pharmaceutical firms, so that they can produce medications which will gradually relieve the industry’s reliance on imports.