Controversy over pharmaceutical management policy
Foreign firms argue that disallowing them to provide preservation and transportation service is not in line with international commitments.
Opposing views on pharmaceutical management policy were again reflected in discussions on Thursday by the American Chamber of Commerce in Vietnam (Amcham) and the Vietnam’s Association of Foreign Invested Enterprises (VAFIE).
Controversy over pharmaceutical management policy
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He said that since the MoH’s draft circular on the 2016 Law stipulates that 100 per cent foreign-owned enterprises must comply with Decree 54, meaning preservation and transportation of drugs must stop as soon as this draft comes into force.
According to Seck, not only does this provision contradict international trade commitments that Vietnam willingly joined, such as the World Trade Organization (WTO) Accession Commitment, it also does not conform to the principle of investment protection under the Investment Law and the Law on Promulgation of Legal Documents’ principle of non-retroactivity.
AmCham and VAFIE reported that according to foreign enterprises, legal experts and trade representatives, some new regulations in Decree 54 are inadequate, not fully in line with Vietnam’s international commitments and related laws and curbing firms’ autonomy.
Le Net, partner at LNT & Partners’ Infrastructure and Financial Services, said that the draft circular does not allow foreign-invested enterprises to lease or rent warehouses, which he found unreasonable and a potential indirect cause for increased drug prices.
Commenting on this issue, economic expert Vo Tri Thanh said that under the WTO rules, State protections are reserved for sensitive sectors such as culture, security, national defense and energy security.
Thanh said that the domestic pharmaceutical industry might not benefit entirely from Decree 54’s mechanism against foreign companies.
He then mentioned nearly two decades of protection for the automobile industry, which ultimately affect consumers’ right to buy quality goods at a reasonable price, arguing that the law can not interfere with enterprises’ rights to carry out or to delegate and negotiate with other entities to carry out their business activities.
Speaking at the discussion, Nguyen Huy Quang, head of the MoH’s legal department, said there would be a time when foreign-funded enterprises have the right to freely distribute pharmaceutical products in the Vietnamese market, but that time is not now.
Until now, foreign invested companies with import rights have not been able to get the relevant import license from the MoH due to lack of legal basis from the ministry’s side.
Still, Quang added that the MoH, in accordance with the Ministry of Planning and Investment, Ministry of Industry and Trade, and Ministry of Justice would do their best to create a stable investment and business environment for both domestic and foreign pharmaceutical enterprises.
He stressed that the decree’s seemingly tightened control on foreign-invested pharmaceutical companies is not contrary to the current law, as Article 44 of the 2016 pharmaceutical law authorizes the MoH to decide the nature of these businesses.
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