Joint circular No. 50/2011/TTLT-BYT-BTC-BCT of December 30, 2011, guiding the state management of prices of medicines for human use

• Official number: 50/2011/TTLT-BYT-BTC-BCT
• Legislation Type: Joint circular
• Organization: The Ministry of Finance, The Ministry of Health, The Ministry Of Industry And Trade
• Signer: Cao Minh Quang, Nguyen Cam Tu, Tran Van Hieu
• Issued Date: 30/12/2011

THE MINISTRY OF HEALTH - THE MINISTRY OF FINANCE - THE MINISTRY OF INDUSTRY AND TRADE -------	THE SOCIALIST REPUBLIC OF VIETNAM Independence– Freedom – Happiness ---------------
No. 50/2011/TTLT- BYT-BTC-BCT	Hanoi, December 30, 2011

JOINT CIRCULAR

GUIDING THE STATE MANAGEMENT OF PRICES OF MEDICINES FOR HUMAN USE

Pursuant to Pharmacy Law of the National Assembly No. 34/2005/QH11 dated June 14, 2005;

Pursuant to the National Assembly Standing Committee’s Price Ordinance of the National Assembly Standing Committee No. 40/2002/PL- UBTVQH10 of April 26, 2002;

Pursuant to Decree No. 79/2006/ND-CP dated August 9, 2006, of the Government detailing a number of articles of the Pharmacy Law;

Pursuant to the Decree No. 170/2003/ND-CP of December 25, 2003, of the Government detailing a number of articles of the Price Ordinance;

Pursuant to the Government’s Decree No. 75/2008/ND-CP dated June 9, 2008 amending and supplementing a number of articles of the Government’s Decree No. 170/2003/ND-CP dated December 25, 2003, detailing a number of articles of the Price Ordinance;

Pursuant to the Decree No. 84/2011/ND-CP dated September 20, 2011 of the Government on sanctioning of price-related administrative violations;

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The Ministry of Health, the Ministry of Finance and the Ministry of Industry and Trade jointly guide the state management of prices of medicines for human use as follows:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides the state management of medicine prices, covering the declaration and re-declaration of medicine prices; listing of medicine prices; management of medicine prices paid by the State budget or health insurance and hospital fee revenues; the competence and responsibilities of agencies and facilities in the implementation of regulations on management of medicine prices; and the inspection and examination of the compliance of state regulations on management of medicine prices in Vietnam.

Article 2. Subjects of application

This Circular applies to Vietnamese and foreign organizations and individuals that are licensed for medicine manufacture, import, import entrustment, registration or registration authorization, placement of processing orders, wholesale and/or retail (below referred collectively to as medicine trading facilities); medical examination and treatment facilities in Vietnam; and agencies, organizations and persons involved in the state management of medicine prices.

Article 3. Principles of state management of medicine prices

1. The State manages medicine prices on the principle that medicine trading facilities set the prices by themselves, compete in prices and submit to the inspection and control by agencies performing the state management of medicine prices under the Pharmacy Law, the Government's Decree No. 79/2006/ND-CP of August 9, 2006, detailing a number of articles of the Pharmacy Law, this Circular and other relevant legal documents.

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3. Medicine trading facilities shall fully comply with guidelines on declaration, re-declaration and listing of medicine prices and bear responsibility before law for declared, re­declared, posted prices and sale prices of medicines under the Pharmacy Law, the Government’s Decree No. 79/2006/ND-CP of August 9, 2006, detailing a number of articles of the Pharmacy Law, this Circular and other relevant legal documents.

4. The medicine price state management agencies (the Drug Administration of Vietnam under the Ministry of Health and provincial- level Health Departments) shall consider the reasonability of medicine prices but shall not approve medicine prices declared and re­declared by traders.

5. The management of medicine prices is organized under the mechanism of decentralization between central and local medicine price state management agencies according to geographical areas and sectors.

Article 4. Interpretation of terms

1. Types of medicine prices:

a/ Import price means the price inclusive of the medicine value calculated according to the sale price of the country of exportation, insurance cost, freight for transportation from the country of exportation to a Vietnamese port (CIF price), but exclusive of import duty (if any);

b/ Estimated CIF price means the CIF price declared by a medicine manufacturer or an establishment authorized to register medicines with a state management agency upon submission of a medicine registration dossier or re-declared upon the required increase of the CIF price over the declared or previously re­declared price;

c/ Actual CIF price means the CIF price written in the import goods declaration at the customs office;

d/ Cost of home-made medicine means the total cost which is the direct expense for raw materials and fuel plus (+) direct labor cost plus (+) general production cost plus (+) financial expense (loan interest, if any) plus (+) management expense minus (-) expense already allocated to by-products (if any );

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f/ Estimated wholesale price means the wholesale price declared or re-declared by a domestic manufacturer, importer, import entruster or medicine processee to medicine price state management agencies;

g/ Estimated retail price means the retail price estimated to be applied to medicine users, which is declared or re-declared by a domestic manufacturer or importer to state management agencies;

h/ Retail price means the price of medicine applied directly to medicine users at retailing facilities.

2. Medicine price declaration means the report to state management agencies by a medicine trader on the import price, cost, estimated wholesale price and estimated retail price under the guidance in this Circular and relevant laws on price.

3. Medicine price re-declaration means the report to state management agencies by a medicine trader on the import price, cost, estimated wholesale price and estimated retail price upon the required increase of a medicine price over the declared or previously re-declared price under the guidance in this Circular and other relevant laws on price.

4. Medicine price listing means the public display of medicine prices by medicine trading facilities by printing, sticking or writing prices on medicine-containing packages or external packages or publicly displaying on boards, papers or other means placed, hung or stuck at drugstores and supply places as guided in Chapter III of this Circular.

Article 5. Currency used in medicine price declaration, re-declaration and listing

The CIF price must be declared or re­declared in Vietnamese currency together with information on the exchange rate between the used foreign currency and the Vietnamese currency at the time of price declaration.

The applicable exchange rate is the actual exchange rate used by medicine trading facilities for payments to the bank (with which production and business organizations and individuals have transactions) when they borrow or buy foreign currency (ies) for goods purchase. In case a medicine trader has not yet made any payment to the bank, it is the selling exchange rate of the commercial bank at which such trader has borrowed or bought the foreign currency (ies) at the time of price calculation.

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Chapter II

GUIDANCE ON DECLARATION, RE­DECLARATION OF MEDICINE PRICES

Article 6. Medicine price declaration dossiers, order and procedures

1. The medicine price declaration order and procedures applicable to medicines registered for import and medicines imported into Vietnam:

a/ Upon submission of dossiers for new registration of foreign medicines, foreign medicine manufacturers (or medicine registration facilities when authorized) shall declare the estimated CIF price to a Vietnamese port;

b/ Upon submission of re-declaration dossiers, if the CIF price increases over the declared or re-declared estimated CIF price which remains valid, foreign medicine manufacturers (or medicine registration facilities when authorized) shall re- declare the estimated CIF price under Article 7 of this Circular;

c/ For medicines with registration numbers (or with import licenses, for medicines without registration numbers), medicine importers shall declare the following types of prices before putting the first lot of medicines into circulation in the Vietnamese market:

- The practical CIF price at the Vietnamese port;

- The estimated wholesale price;

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For subsequently imported lots, importers are not required to declare if their medicine prices do not increase.

d/ For medicines imported under entrustment, the import entrusters shall make declaration under Point c, Clause 1, Article 6, Chapter II of this Circular.

2. Medicine price declaration order and procedures applicable to home-made medicines:

a/ For medicines with registration numbers, domestic medicine manufacturers (or medicine registration facilities when authorized) shall declare the following prices when putting for the first time the medicines into circulation in the market:

- Cost;

- Estimated wholesale price;

- Estimated retail price (if the facilities have registered for retail business).

For subsequent manufacture lots, domestic manufacturers or facilities authorized to register the medicines are not required to declare the prices if the prices do not increase.

b/ For medicines processed under orders, processees shall declare their prices under Point

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3. Medicine price declaration dossiers:

A medicine price declaration dossier shall be made in 2 sets: One set shall be sent to the Drug Administration of Vietnam under the Ministry of Health while the other shall be kept at the declaring establishment. Such a dossier comprises the following:

a/ For declaration of medicine prices upon submission of the dossier for new registration of imported medicines:

- Medicine price declaration: made under the Form No. 1-GT.

b/ For declaration of prices of imported medicines prior to marketing:

- Medicine price declaration: made under the Form No. 2-GT.

c/ For declaration of medicines manufactured in Vietnam prior to first-time marketing:

- Medicine price declaration: made under the Form No. 3-GT

Article 7. Dossier, order and procedures of medicine price re-declaration

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a/ Increasing the CIF prices of imported medicines (when the CIF prices calculated according to a foreign currency change);

b/ Increasing the wholesale or retail (if any) prices of imported medicines;

c/ Increasing the wholesale or retail (if any) prices of medicines manufactured in Vietnam.

2. Medicine price re-declaration dossier:

A medicine price re-declaration dossier shall be made in 2 sets, one filed with the Drug Administration of Vietnam under the Ministry of Health or the concerned provincial-level Department of Health while the other archived at the re-declaring establishment. A medicine price re-declaration dossier comprises the following documents:

a/ For re-declaration of prices of medicines imported into Vietnam:

- Official letter on medicine price re-declaration, made under the Form No. 4-GT;

- Re-declaration of medicine prices: made under the Form No. 5-GT.

b/ For re-declaration of wholesale or retail (if any) prices of medicines imported into Vietnam:

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- Re-declaration of medicine prices: made under the Form No. 6-GT.

c/ For re-declaration of wholesale or retail (if any) prices of medicines manufactured in Vietnam:

- Official letter on medicine price re-declaration: made under the Form No. 4-GT;

- Re-declaration of medicine prices: made under the Form No. 7-GT.

Article 8. Competence and responsibilities of medicine price state management agencies and business facilities in implementing the provisions on declaration and re-declaration of medicine prices

1. Competence to receive medicine price declaration or re-declaration dossiers:

a/ The Drug Administration of Vietnam under the Ministry of Health shall receive:

- Dossiers of declaration of prices of medicines registered and imported into Vietnam;

- Dossiers of re-declaration of prices of imported medicines;

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b/ Provincial-level Departments of Health shall receive dossiers of re-declaration of medicines manufactured by the production facilities located in their respective localities;

cl The medicine price state management agencies (the Drug Administration of Vietnam under the Ministry of Health and provincial- level Departments of Health) shall hand over the written receipts of medicine price declaration dossiers on the same working day to business facilities submitting the medicine price declaration or re-declaration dossiers. Written receipts of medicine price declaration or re-declaration dossiers comply with Form No. 8-GT and Form No. 9-GT.

2. Responsibilities of state management agencies of medicine price:

The state management agencies of medicine price do not approve the medicine prices declared by facilities themselves but oversee the declaration and re-declaration of medicine prices as follows:

a/ For medicine price declaration:

In the duration from the time of medicine price declaration to the time of expiry of the registration number or the license for import of non-registered medicines, if detecting that the declared medicine price is unreasonable, the Drug Administration of Vietnam under the

Ministry of Health shall give its opinions in writing, clearly stating the reason therefore and proposing the establishment to reconsider the declared medicine price.

b/ For medicine price re-declaration:

Within 17 working days after the receipt of a complete medicine price re-declaration dossier as guided, if detecting that the re-declared medicine price is unreasonable, the Drug Administration of Vietnam under the Ministry of Health or the provincial-level Department of Health shall give written opinions on the re­declared medicine price and clearly state the reason therefore.

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- Import expense, total cost, expense for medicine circulation, which are determined under current laws;

- The prevailing medicine prices in the domestic, regional and world markets;

- Fluctuation of such input elements as raw materials, fuel, exchange rate and some other expenses.

3. If medicine price state management agencies or competent persons detect that medicine trading facilities violate the provisions on medicine price management, they shall:

Handle and transfer to agencies with competence to handle violations as defined in Article 17 of the Government’s Decree No. 93/ 2011/ND-CP of October 18, 2011, on sanctioning of administrative violations related to medicines, cosmetics and medical equipment and other relevant legal documents on violations in medicine price management.

Pending the handling of violations by competent agencies, the medicine price state management agencies shall, depending on the nature and severity of violations (repeated violations or involving many commodities or multiple violations of regulations on medicine price management), apply the following measures:

a/ To suspend the receipt and consideration of dossiers of medicine registration, dossiers of operation registration of foreign enterprises related to medicines and medicine materials in Vietnam, dossiers of medicine information and advertisement from medicine manufacturers or facilities authorized to register medicines in the following cases:

- Failing to declare, re-declare or fully declare medicine prices according to regulations;

- Failing to consider readjustment of the declared price after receiving written opinions of the medicine price state management agency;

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- Failing to notify customers of the declared or re-declared medicine prices which are valid.

b/ To suspend the receipt and consideration of dossiers of import of unregistered medicines from importers or import entrusters in the following cases:

- Failing to declare, re-declare or fully declare medicine prices according to regulations;

- Failing to consider readjustment of the declared prices after receiving written opinions of medicine price state management agencies;

- Selling medicines at prices higher than the declared or re-declared prices which remain valid;

- Failing to notify customers of the declared or re-declared medicine prices which are valid.

c/ If facilities sell medicines at prices higher than the currently valid declared or re­declared prices without making re-declaration as required, medicine price state management agencies shall apply the handling measures defined at Points a and b, Clause 3, Article 8 of this Circular, and at the same time request such facilities to properly adjust the sale prices to be not higher than the valid declared or re­declared prices before the price increase.

4. The Ministry of Health may set up inter­-sector working teams to examine medicine price declarations or re-declarations by facilities, and propose how to handle cases of unreasonable declaration or re­declaration of medicine prices. An inter-sector working team shall be composed of representatives of the Ministry of Health (the Drug Administration of Vietnam as the main responsible agency, the Planning and Finance Department), of the Ministry of Finance (the Price Administration of Vietnam, the Enterprise Finance Department) and of the Ministry of Industry and Trade (the Domestic Market Department).

5. Provincial-level Departments of Health shall set up inter-sector working teams to examine medicine price re-declaration by domestic manufacturers located in their respective localities, promptly propose how to handle cases of unreasonable re-declaration. Such a local inter-sector working team shall be composed of representatives of the concerned provincial-level Department of Health as the main responsible body, provincial-level Department of Finance and provincial-level Department of Industry and Trade.

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a/ Medicine trading facilities have the right to set by themselves the prices of their traded medicines, and the responsibility to fully comply with the provisions on declaration, re-declaration and listing of medicine prices and other provisions of this Circular on medicine price management and relevant legal documents; and take responsibility before law for the declared, re­declared and posted prices as well as data, reports and information on prices they have provided;

b/ If medicine price state management agencies give written opinions on medicine prices declared or re-declared by medicine trading facilities, within 30 days after receiving such opinions, medicine trading facilities may request explanations from the state management agencies for these opinions; past this time limit, if the facilities have no opinions, their declaration or re-declaration dossiers will be no longer valid and they shall comply with the state management agencies’ opinions on their declared or re-declared medicine prices;

c/ In the course of medicine trading:

- Medicine importers, domestic medicine manufacturers, import entrusters and processees shall provide their customers with information on the currently valid estimated wholesale prices and retail prices (if any) they have declared or re-declared by themselves in written notices or sale invoices.

- Medicine wholesalers shall base themselves on the estimated wholesale prices notified by medicine suppliers and the information on the website of the Drug Administration of Vietnam under the Ministry of Health to set by themselves the medicine sale prices to be not higher than the currently valid estimated wholesale prices already declared or re-declared by medicine importers, domestic medicine manufacturers, import entrusters or processees;

- Facilities that sell medicines at prices lower than the declared or re-declared prices shall comply with the law on dumping.

7. Periodical report on medicine price re­declaration:

Before the 10th of every month, provincial- level Departments of Health shall report to the Ministry of Health (the Drug Administration of Vietnam - the Ministry of Health) in writing and by email (to the address: [email protected]) on the medicine price re-declarations by domestic manufacturers based in their respective localities (Form No. 10-GT).

Chapter III

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Article 9. Price listing at medicine wholesale facilities

Medicine wholesale facilities shall post wholesale prices of every kind of medicine by way of public notice on boards, papers or other means placed, hung or stuck at their transaction or sale places for customers’ easy observation and may not sell medicines at prices higher than the posted prices. The posted wholesale prices of medicine wholesalers must not be higher than the estimated wholesale prices declared or re-declared by medicine manufacturers or importers to medicine price state management agencies.

Article 10. Price listing at medicine retailing facilities

Medicine retailing facilities shall post retail prices of every kind of medicine by way of printing, writing or sticking retail prices on medicine-containing packages or external packages, ensuring that the contents of the original labels are not covered, and are prohibited from selling medicines at prices higher than the posted prices.

Article 11. Listing of medicine prices at retailing facilities in medical examination and treatment facilities

1. Medicine retailing facilities in medical examination and treatment facilities shall post up medicine retail prices as guided in Article 10 of this Circular.

2. The medicine retail prices posted by medicine retailing facilities in medical examination and treatment facilities must comply with the Ministry of Health’s regulations on the maximum retail surplus.

3. Directors of medical examination and treatment facilities shall bear responsibility for the implementation of regulations on management of medicine prices set by retailing facilities in their own facilities.

Chapter IV

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Article 12. Management of prices of medicines ordered by the State and paid from the state budget source

1. The Ministry of Finance shall set payment prices for medicines paid from the central budget source after getting written appraisal of the Ministry of Health; provincial-level Departments of Finance shall set payment prices for medicines paid from local budget sources after getting written appraisal of provincial-level Departments of Health.

2. Based on the principles of state management of medicine prices provided in Article 3 of this Circular and the Regulation on valuation of property, commodities and services, promulgated together with the Ministry of Finance’s Circular No. 154/2010/TT-BTC of October 1, 2010, facilities receiving goods orders or plans from the State shall formulate price plans and submit them to competent state agencies defined in Clause 1 of this Article for appraisal and promulgation according to their competence.

Article 13. Management of medicine prices paid by the state budget, health insurance and hospital fee revenues

1. Medicines on the list of essential drugs used in public medical examination and treatment facilities and non-public medical facilities with medical examination and treatment contracts with social security agencies, and medicines paid by the state budget and hospital fee revenues must be tendered under the bidding law and other regulations related to bidding for medicine purchase at medical facilities.

2. The bid-winning medicine price must not be higher than the current maximum prices announced by the Ministry of Health at the latest time. If the maximum prices are not yet announced, when formulating medicine purchase bidding plans, bidders shall comply with the joint guidance of the Ministry of Health and the Ministry of Finance on bidding for medicine purchase at medical facilities.

3. Within 30 working days after the bidding results are announced, hospitals and institutes with hospital beds belonging to the Ministry of Health, provincial-level hospitals (or provincial- level Departments of Health in case centralized bidding is organized) and non-public units signing medical examination and treatment contracts with health insurance shall send reports on winning medicine price bids to the Drug Administration of Vietnam under the Ministry of Health for updating and listing on its website. Reports shall be made in written form and sent by email to the address: [email protected] (Form No. 11- GT).

Chapter V

INSPECTION, EXAMINATION AND HANDLING OF VIOLATIONS

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1. The Ministry of Health, the Ministry of Finance and the Ministry of Industry and Trade shall, within the scope of their respective tasks and powers, organize inspection and examination or coordinate in inspection, examination and handling of violations of state regulations on management of medicine prices at medicine trading facilities and medical examination and treatment facilities nationwide in accordance with law.

2. Ministries and sectors having medicine trading facilities and medical examination and treatment facilities shall periodically or unexpectedly inspect, examine and handle violations according to their respective tasks and powers.

3. The People's Committees at different levels shall, within the scope of their tasks and powers, direct local functional bodies to organize inspection and examination or coordinate in inspection, examination and handling of violations of state regulations on management of medicine prices by medicine trading facilities and medical examination and treatment facilities in their localities in accordance with law.

Article 15. Handling of violations

Organizations and individuals that violate this Circular’s provisions on medicine price management of this Circular and relevant legal documents shall, depending on the nature and severity of their violations, be administratively sanctioned or examined for penal liability, and if causing damage to customers, the State or other enterprises, shall pay compensations therefore under law.

Chapter VI

ASSIGNMENT OF RESPONSIBILITY FOR AND COORDINATION OF STATE MANAGEMENT OF MEDICINE PRICES

Article 16. Responsibilities of the Ministry of Health

1. The Ministry of Health shall assume the prime responsibility for, and coordinate with the Ministry of Finance, the Ministry of Industry and Trade and related ministries and sectors in:

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b/ Annually or in case of abnormal fluctuation of medicine prices, announcing the maximum medicine prices covered by the state budget and health insurance.

2. The Ministry of Health, the Ministry of Finance and the Ministry of Industry and Trade shall direct, according to their respective jurisdiction, medical, financial and market management agencies at different levels to regularly coordinate in inspecting and examining the observance of legal provisions on medicine circulation, export and import and medicine price management.

3. The Ministry of Health assigns the Drug Administration of Vietnam to:

a/ Assume the prime responsibility for, and coordinate with overseas Vietnamese trade representations in, surveying medicine prices in countries in the region and the world to serve the state management of medicine prices at home;

b/ Update and publicize medicine prices declared or re-declared by facilities on the website of the Ministry of Health (the Drug Administration of Vietnam), specialized magazines and other appropriate mass media;

c Update and publicize the bid-winning medicine price of medical examination and treatment facilities within the last 12 months on the website of the Ministry of Health (the Drug Administration of Vietnam).

Article 17. Responsibility of the Ministry of Finance

The Ministry of Finance assigns the following units:

1. The General Department of Customs to supply actual CIF prices of medicines imported and circulated in the Vietnamese market (on the 25th of every month at the latest), send to the Drug Administration of Vietnam under the Ministry of Health information on the medicine import of the preceding month according to Joint Circular No.98/2010/TTLT-BTC- BNNPTNT-BYT of July 8,2010 of the Ministry of Finance, the Ministry of Agriculture and Rural Development and the Ministry of Health, guiding the supply and exchange of information relating to taxpayers, state management of customs, agriculture and health. The forms of supply are written form and email to the address: [email protected].

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3. The General Department of Taxation to direct local tax offices to inspect the implementation of invoice and voucher regimes by medicine trading facilities in their respective localities.

Article 18. Responsibilities of the Ministry of Industry and Trade

1. To coordinate with sectors and localities in combating speculation and market manipulation to increase medicine prices for illicit profits, and in inspecting and supervising competition activities, combating monopoly and other acts in violation of the laws on competition and prices and other offenses.

2. To direct overseas Vietnamese trade representative offices to coordinate with the Drug Administration of Vietnam - the Ministry of Health in surveying medicine prices in countries in the region and the world, and support the Drug Administration of Vietnam and the General Department of Customs in coordinated supply of information on prices of medicines imported from countries in the region and the world to serve the state management of medicine prices.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 19. Effect

This Circular takes effect on June 1, 2012, and supersedes the Joint Circular No. 11/2007/TTLT- BYT-BTC-BCT dated August 31, 2007, of the Ministry of Health, the Ministry of Finance and the Ministry of Industry and Trade, guiding the management of prices of medicines for human use.

The medicine price declaration or re-declaration dossiers made before this Circular takes effect (under the guidance in Joint Circular No. 11/ 2007/TTLT-BYT-BTC-BCT of August 31, 2007, guiding the management of prices of medicines for human use) remain valid.

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1. Medicine trading facilities and medical examination and treatment facilities shall immediately apply necessary measures to strictly implement the guidance in this Circular.

2. Professional associations and societies and their chapters shall, within the scope of their respective responsibility, disseminate, and supervise the implementation of, regulations on medicine price management to their members and promptly report on medicine price fluctuations, suggest and propose measures to stabilize medicine prices to medicine price state management agencies.

3. Any problems arising in the course of implementation should be promptly reported to the Ministry of Health for joint study and settlement by the Ministry of Health, the Ministry of Finance and the Ministry of Industry and Trade.-

FOR THE MINISTER OF HEALTH
DEPUTY MINISTER




Cao Minh Quang

FOR THE MINISTER OF FINANCE
DEPUTY MINISTER




Tran Van Hieu

FOR THE MINISTER OF INDUSTRY AND TRADE
DEPUTY MINISTER




Nguyen Cam Tu