Vietnam Approves New Pharmaceutical Law

Vietnam's National Assembly has approved the much-anticipated Pharmaceutical Law, which is set to enforce heavy restrictions on drug price rises and impose new regulatory mechanisms. Importers and distributors will now be obliged to submit pricing plans for approval if planned rises are higher than 1%. Further, the law aims to equalise Vietnam's drug prices with those in neighbouring countries.

The measures are likely to prove unpopular with much of the pharmaceutical industry, given that prices of some antibiotics and other high-selling products have risen by more than 50% since the start of 2005. In recent months, the Pharmaceutical Administration Department has also pledged to "severely punish" unauthorised price rises and block approval of price rises above those in "comparable neighbouring states." This is likely to include China, where per capita drug spending is currently among the lowest in the world.

Meanwhile, the high priority given to the sector is evidenced by the fact that pricing policy will be shared between the ministries of Health, Finance, Industry, Trade, and Planning and Investment. Discounting concerns that this will lead to confusion, officials have claimed that they will first target drugs with "a mass influence on the public."