Medicine Prices and Pricing Policies in Vietnam
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MEDICINE PRICES AND PRICING POLICIES IN VIETNAM Tuan Anh Nguyen A thesis submitted in fulfillment of the requirements for the degree of Doctor of Philosophy School of Public Health & Community Medicine Faculty of Medicine, University of New South Wales, Australia April 2011 THE UNIVERSITY OF NEW SOUTH WALES Thesis/Dissertation Sheet Surname or Family name: Nguyen First name: Tuan Anh Other name/s: Abbreviation for degree as given in the University calendar: PhD School: Public Health and Community Medicine Faculty: Medicine Title: Medicine prices and pricing policies in Vietnam Abstract 350 words maximum: Availability of affordable medicines is one precondition to realizing the fundamental human right of access to essential healthcare. Although Vietnam is progressing well with several health-related targets of the Millennium Development Goals being achieved ahead of time, attaining equitable access to affordable medicines remains problematic. In this thesis, a mixed-method approach was adopted in the analysis of medicine prices and polices. The literature was reviewed, followed by an analysis of Vietnam’s pharmaceutical market and legislation. A quantitative study of medicine prices, and a qualitative study on how and why high, unaffordable prices occurred, were conducted. The findings were synthesized to form policy recommendations. The studies demonstrated that medicine prices in Vietnam were unreasonably high. Adjusted for Purchasing Power Parity in 2005, prices in the public sector were 46.58 times the international reference price for innovator-brand medicines and 11.41 times for the lowest-priced generic equivalents. Monopoly of supply was an important cause of high innovator-brand prices. More complex, intrinsic features of Vietnam’s healthcare system were also reported by key stakeholders as driving up prices. Economic survival pressures, in an imperfectly competitive market, were said to force both pharmaceutical companies and prescribers to be inextricably linked financially. Ethics and personal values however did influence prescribers’ behaviour and their response to corrupt procedures. Overall, intractable, systemic features contributing to high prices included unrealistic low salaries for prescribers, poor economies of scale in domestic production, inefficiencies in the local distribution network, malfunctioning pricing policies and a general lack of transparency and accountability in administrative procedures. A range of policy measures and changes are required to improve access to medicines in Vietnam. Short- term recommendations include amendments to pharmaceutical policies, with better enforcement of current regulations. Medium-term measures include the public health insurance system taking an active role in price setting, pooling procurement through a national tendering procurement system and reform of the domestic market through rationalization with appropriate capital and technological investment to achieve improved efficiencies and economies of scale. Longer-term goals include health system improvements to address poor governance, low remuneration of prescribers, with additional measures to limit the scope for corrupt practices. Declaration relating to disposition of project thesis/dissertation I hereby grant to the University of New South Wales or its agents the right to archive and to make available my thesis or dissertation in whole or in part in the University libraries in all forms of media, now or here after known, subject to the provisions of the Copyright Act 1968. I retain all property rights, such as patent rights. I also retain the right to use in future works (such as articles or books) all or part of this thesis or dissertation. I also authorise University Microfilms to use the 350-word abstract of my thesis in Dissertation Abstracts International (this is applicable to doctoral theses only). ...........................………................. .......................………………..... ……………………...…….… Signature Witness Date The University recognises that there may be exceptional circumstances requiring restrictions on copying or conditions on use. Requests for restriction for a period of up to 2 years must be made in writing. Requests for a longer period of restriction may be considered in exceptional circumstances and require the approval of the Dean of Graduate Research. FOR OFFICE USE ONLY Date of completion of requirements for Award: THIS SHEET IS TO BE GLUED TO THE INSIDE FRONT COVER OF THE THESIS ORIGINALITY STATEMENT ‘I hereby declare that this submission is my own work and to the best of my knowledge it contains no materials previously published or written by another person, or substantial proportions of material which have been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made in the thesis. Any contribution made to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged in the thesis. I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the project's design and conception or in style, presentation and linguistic expression is acknowledged.’ Signed.................................................................................... Date....................................................................................... COPYRIGHT STATEMENT ‘I hereby grant the University of New South Wales or its agents the right to archive and to make available my thesis or dissertation in whole or part in the University libraries in all forms of media, now or here after known, subject to the provisions of the Copyright Act 1968. I retain all proprietary rights, such as patent rights. I also retain the right to use in future works (such as articles or books) all or part of this thesis or dissertation. I also authorise University Microfilms to use the 350 word abstract of my thesis in Dissertation Abstract International (this is applicable to doctoral theses only). I have either used no substantial portions of copyright material in my thesis or I have obtained permission to use copyright material; where permission has not been granted I have applied/will apply for a partial restriction of the digital copy of my thesis or dissertation.' Signed ……………………………………………........................... Date ……………………………………………........................... AUTHENTICITY STATEMENT ‘I certify that the Library deposit digital copy is a direct equivalent of the final officially approved version of my thesis. No emendation of content has occurred and if there are any minor variations in formatting, they are the result of the conversion to digital format.’ Signed ……………………………………………........................... Date ……………………… …………………………………….. ii DEDICATION This thesis is dedicated to my parents, Dinh Thiem Nguyen and Thi Lien Doan, for nurturing me and teaching me to care about others. iii iv ACKNOWLEDGEMENTS I would like to thank the Ministry of Education and Training of Vietnam, Vietnam government for awarding me a PhD scholarship to study in Australia. I would also like to acknowledge the Vietnam team who conducted the survey of medicine prices and availability, and the Ministry of Health of Vietnam for giving me permission to use the survey data in this thesis. I am grateful to all members of the Drug Price Management Division, Drug Administration of Vietnam for sharing their views as well as their cooperation and support when I conducted fieldwork in Vietnam. My project also rests on the cooperation, generosity and courage of the sixty study participants who gave their time and shared their valuable opinions and sensitive information in the interviews. I owe a debt of gratitude to my supervisor, Associate Professor Rosemary Knight. Without her mentorship, support, and depth of knowledge, this thesis would not have been completed. Her calm, insights, compassion and elegant language were central to the conceptualisation, design, analysis and reporting of this thesis, as was her vision and ability to approach problems from a global perspective. My co-supervisors, Associate Professor Andrea Mant and Dr. Quang Minh Cao were patient, thoughtful and encouraging. Their critical comments and feedback were invaluable along every step of this project. Their practical and consistent support has kept me going to the end of my PhD journey. Dr. Husna Razee was my qualitative co-supervisor, whose experience and knowledge in qualitative research greatly contributed to the qualitative study for this thesis. My special thanks go to Dr. Geoffrey Brooks for sharing his excellent knowledge of economics and Australian pharmaceutical policy and practice, and for taking me under his wing as my second father. His critical feedback greatly improved the quality of this thesis. Support was also received from Dr. Pat Bazeley who assisted me in developing the qualitative coding schemes, steered me through the perils of NVIVO and mixed methods research and fed me from her research farm. v I am grateful to Mr. Martin Auton (Global project officer - Pricing, Health Action International Global) and Ms. Alexandra Cameron (Coordinator medicine pricing project, WHO) for their cross-analysis of the survey data and for giving me valuable comments on the quantitative study for this thesis. Great thanks are also due to Mr. Wayne Critchley (Former Executive Director, Patented Medicine Prices Review Board Government of Canada) for providing critical feedback