THE
GOVERNMENT
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No.
120/2004/ND-CP
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Hanoi,
May 12, 2004
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DECREE
ON
MANAGEMENT OF PRICES OF HUMAN-USE PREVENTIVE AND CURATIVE MEDICINES
THE GOVERNMENT
Pursuant to the December 25,
2001 Law on Organization of the Government;
Pursuant to the July 11, 1989 Law on Protection of the People's Health;
Pursuant to the April 26, 2002 Price Ordinance;
Pursuant to the Junly 2, 2002 Ordinance on Handling of Administrative
Violations;
At the proposal of the Minister of Finance,
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1.- Scope
of regulation
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Article 2.- Subjects
of application
1. This Decree applies to
domestic as well as foreign organizations and individuals that are licensed to
produce, import and/or trade in human-use preventive and curative medicines as
well as disease prevention and treatment establishments in Vietnam (hereinafter
referred to as establishments).
2. In cases where the
international treaties which the Socialist Republic of Vietnam has signed or
acceded to contain the provisions different from those in this Decree, the
provisions of such international treaties shall apply.
Article 3.- Human-use
preventive and curative medicines prescribed in this Decree mean assorted
finished medicines which are permitted for circulation and use in Vietnam by
the Ministry of Health.
Article 4.- Medicine
prices shall be managed on the following principles:
1. The State shall respect the
right of the medicine-producing, -importing and/or trading establishments to
set prices and to compete in prices strictly according to law, except for
medicines with prices set by the State.
2. The State shall take
necessary measures to stabilize the prices and set prices of a number of
essential medicines in order to protect the rights and legitimate interests of
the consumers, of the medicine-producing, -importing and/or -trading
establishments, and the interests of the State.
3. To implement the national
policy on medicines, enhance the capability to produce and supply medicines to
meet domestic and export demands; create conditions for the development of
Vietnam's pharmaceutical industry, contributing to the realization of the
policy on protection and care of the people's health.
Article 5.- Interpretation
of terms
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1. Human-use preventive and
curative medicines mean products originating from animals, plants, minerals,
chemicals or biologicals, which are prepared for human use in order to prevent
and treat diseases, to rehabilitate or regulate body functions, reduce ailment
symptoms, diagnose diseases, recover or improve health, to desensitize part or
whole of the body, to affect the reproductive process or create physical
changes.
Finished medicines mean
medicines which have gone through all stages of production under necessary
processes and are permitted for use and circulation in Vietnam.
2. Price declaration means the
exact record of, and report on, the import price as well as wholesale and
retail prices of each medicine to functional agencies according to the
provisions of this Decree and other relevant law provisions.
3. Retail surplus means
reasonable expenditures and reasonable profits for the retail stage.
4. Wholesale surplus means
reasonable expenditures and reasonable profits for the whole wholesale stage.
5. Retail price bracket means a
permitted span of retail prices of a number of essential human-use preventive
and curative medicines.
6. Posting up of medicine prices
means the publicization of medicine sale prices by printing, affixing or
inscribing the medicine sale prices on medicine containers or outer packings;
publicization of their prices on boards or papers at drug stores.
7. Abnormal fluctuation of
medicine prices means sudden increase or decrease of medicine prices due to
natural disasters, epidemics or other abnormal circumstances, greatly affecting
the socio-economic development.
Chapter II
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Article 6.- Groups
of medicines with prices managed by the State
The State shall manage the
medicine prices of the following 3 groups:
1. Group of medicines ordered
and priced by the State;
2. Group of medicines purchased by
medical establishments for supply free of charge to subjects enjoying social
policies, for partial collection of hospital fees or medical insurance;
3. Group of medicines with
prices set by establishments themselves.
Article 7.- Management
of prices of a number of medicines ordered and priced by the State
1. The Minister of Finance shall
prescribe:
a/ The specific prices of
medicines ordered and paid by the State with the State budget source not in
form of bidding or auction;
b/ The retail price brackets of
essential human-use preventive and curative medicines suitable to each period
according to the lists prescribed by the Minister of Health.
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3. Adjustment of State-set
prices
When the price-forming elements
fluctuate, greatly affecting the establishments' production and/or business
activities, the State agencies competent to determine prices must adjust in
time the set prices. In cases where they do not adjust the prices, they may
apply financial, monetary and other necessary measures according to their
respective competence; if such cases fall beyond their competence, they must
report thereon to the Prime Minister for decision.
Article 8.- Management
of prices of medicines purchased by medical establishments for supply to
subjects enjoying free-of-charge supply, social policies, partial collection of
hospital fees or medical insurance
1. Medicines purchased by
medical establish-ments for supply to subjects enjoying free-of-charge supply,
social policies, partial collection of hospital fees or medical insurance must
go through bidding according to law provisions. The bid-winning medicine prices
must be lower than the current common retail prices of such medicines on the
market and uniformly apply to all public medical establishments in the
provinces.
2. The Ministry of Health shall
assume the prime responsibility for, and coordinate with the Ministry of
Planning and Investment and the Ministry of Finance in, providing specific
guidance on bidding of medicines prescribed in Clause 1 of this Article.
Article 9.- Management
of medicine prices set by establishments themselves
1. Establishments shall
themselves set prices of medicines permitted for circulation on the Vietnamese
market, except for medicines ordered and priced by the State and medicines
purchased by medical establishments as prescribed in Articles 7 and 8 of this
Decree.
2. Medicine-producing
establishments shall base themselves on production costs and budget remittances
to set by themselves their selling prices of medicines suitable to the market,
which must, however, not be higher than the selling prices of medicines of the
same kinds in the countries with medical and commercial conditions familiar to
those in Vietnam. The medicine-producing establishments must declare the
wholesale prices of such medicines when registering medicine circulation with
competent State management agencies.
3. Medicine-importing
establishments shall base themselves on import prices and budget remittances to
set by themselves the selling prices of medicines suitable to the market and
fully declare the import prices and prices sold by suppliers in a number of
countries in the region and the planned retail prices of such medicines in
Vietnam when submitting their dossiers of registration for circulation of
foreign-made medicines (including medicine-importing establishments which have
not yet obtained the registration numbers in Vietnam) to competent State
management agencies.
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5. Medicine-retailing
establishments shall base themselves on the purchased medicines' value
inscribed in invoices issued by the Ministry of Finance and the retail surplus
prescribed by the Ministry of Finance to set the retail prices of medicines
suitable to the market. The medicine-retailing establishments must fully
observe the competent State agencies' regulations on the use of invoices and
vouchers for goods circulated on the market and shall be entitled to sell
curative medicines only at doctors' prescriptions, except for medicines not
subject to prescription as provided for by the Ministry of Health.
Article 10.- Stabilization
of medicine prices
When the market prices of a
number of essential medicines abnormally fluctuate nationwide or in some area
or region, affecting the patients' interests, the competent State agencies
shall take measures to stabilize the prices according to the provisions of the
Government's Decree No. 170/2003/ND-CP of December 25, 2003 detailing the
implementation of a number of articles of the Price Ordinance.
Chapter III
POSTING UP OF MEDICINE PRICES
Article 11.- Posting
up of wholesale prices
1. Establishments producing,
importing and/or wholesaling medicines must post up the wholesale price of each
kind of medicine at the places where medicines are wholesaled and must not sell
medicines at prices higher than the posted-up ones.
2. Medicine prices shall be
posted up by inscribing them on boards or papers, which are put up at
convenient places at drug stores.
Article 12.- Posting
up of retail prices
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2. Medicine prices shall be
posted up by printing, inscribing or affixing the retail prices on medicine
containers or outer packings.
Chapter IV
INSPECTION, EXAMINATION AND HANDLING OF VIOLATIONS
Article 13.- Inspection
and examination of the observance of regulations on management of medicine
prices
1. The Ministry of Finance, the
Ministry of Health as well as the concerned ministries and branches shall,
within the ambit of their respective tasks and powers, inspect or examine, or
coordinate with one another in inspecting, examining and handling violations of
the State's regulations on management of medicine prices at establishments
producing, importing, wholesaling and/or retailing medicines and at medical
treatment establishments nationwide according to law provisions.
2. The People's Committees of
all levels shall, within the ambit of their respective tasks and powers,
inspect or examine, or coordinate with one another in inspecting, examining and
handling violations of the State's regulations on management of medicine prices
at establish-ments producing, importing, wholesaling and retailing medicines
and at medical treatment establishments in their respective localities
according to law provisions.
Article 14.- Sanctioning
administrative violations in the field of management of medicine prices
1. A fine of between VND 500,000
and VND 2,000,000 shall be imposed on acts of violating the regulations on
declaration of medicine prices for the volume representing less than 10% of
kinds of establishments' medicines.
A fine of between VND 2,000,000
and VND 5,000,000 shall be imposed on acts of violating the regulations on
declaration of medicine prices for the volume representing 10% or more of kinds
of establishments' medicines.
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2. A fine of between VND
5,000,000 and VND 10,000,000 on acts of falsely prescribing price brackets or
surplus prescribed by competent agencies.
Additional sanctioning forms:
Definite depri-vation of the right to use practicing permits or certificates
shall be imposed on establishments and individuals that commit acts of
violating the provisions of this Clause once a year. Indefinite deprivation of
the right to use practicing permits or certificates shall be imposed on
establishments and individuals that commit acts of violating the provisions of
this Clause twice or more a year.
3. A fine of between VND
10,000,000 and VND 20,000,000 for acts of associating with one another for
price monopoly.
Additional sanctioning forms:
(Definite or indefinite) deprivation of the right to use practicing permits or
certificates shall be imposed on establishments which commit acts of violating
the provisions of this Clause twice or more a year.
4. Other
administrative-violation acts in the field of management of medicine prices
shall be administratively sanctioned according to the provisions of the
Government's decree prescribing sanctions against administrative violations in
the price domain.
5. The specific sanctioning
competence, order and procedures shall comply with the provisions of the 2002
Ordinance on Handling of Administra-tive Violations and relevant legal
documents.
Chapter V
IMPLEMENTATION PROVISIONS
Article 15.- Implementation
effect:
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Article 16.-
Organization of implementation:
1. The Ministry of Finance shall
assume the prime responsibility for, and coordinate with the Ministry of Health
as well as the concerned ministries and branches in, guiding the implementation
of this Decree.
2. The Ministry of Health:
a/ To assume the prime
responsibility for, and coordinate with the Ministry of Planning and Investment
as well as the concerned ministries and branches in, elaborating a scheme on
solutions to restrict and get rid of foreign pharmaceutical companies' monopoly
and submit it to the Prime Minister for approval.
b/ To provide specific guidance
for prescription according to generic names of medicines.
c/ To assume the prime
responsibility for elaborating and implementing a scheme on reorganizing the
network for domestic distribution of human-use preventive and curative
medicines.
d/ To study and elaborate
mechanisms and policies to create conditions for Vietnam Pharmaceutical
Production and Trading Association and Vietnam Pharmacy Society to base
themselves on the pharmaceutical branch development strategy orientations in
each period to guide their members in drawing up plans on organizing medicine
production and trading, ensuring the adequate supply of medicine volumes and
kinds to the market, avoiding over-redundancy or over-shortage of medicines,
thus destabilizing the medicine market.
Article 17.-
Implementation responsibilities
The ministers, the heads of the
ministerial-level agencies, the heads of the Government-attached agencies and the
presidents of the provincial/municipal People's Committees shall have to
implement this Decree.
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ON BEHALF OF THE
GOVERNMENT
PRIME MINISTER
Phan Van Khai