Pharmaceutical industry changes hard

In 2004, the Ministry of Health decided that pharmaceutical enterprises would have to meet the GMP-WHO by 2006. However, the deadline has been extended by several times to mid 2008.

 

Optimistic signs

Late last week, Cagipharm opened a pharmaceutical workshop that meets GMP (good manufacturing practice) at WHO (World Health Organisation) level. If counting Bipharco and a pharmaceutical workshop in Soc Trang province, Vietnam now has 47 workshops that meet GMP-WTO standards.

 

According to Dr Cao Minh Quang, Deputy Minister of Health, by the end of 2006, Vietnam had 60 workshops meeting GMP standards out of the 170 operational workshops. Of these 60, only 18 met GMP-WHO, while the other 42 met GMP-ASEAN only. As such, the number of 47 GMP-WHO workshops should be seen as an encouraging result.

 

According to the Ministry of Health, in 2001, Vietnam's spending for health care was $6 per capita, while the figure rose to $11.53 in 2006. The workshops that can meet GMP standards are running at 60-80% of capacity, making 80% of total turnover of local pharmaceutical production.

 

Challenges

 

Mr Quang has warned about big challenges the the local pharmaceutical industry is facing.

 

According to him, local production can produce 773/1563 active elements and earn 50% of the market's medicine turnover. However, if local production cannot improve itself, the big domestic medicine market will be controlled by foreign manufacturers when Vietnam has to open its market.

 

Most domestic medicine producers have been focusing on regular products, while not paying appropriate attention to making specific medicines. Meanwhile, according to WHO, the production capability of Vietnam's pharmaceutical industry ranks between 2.5 and 3 (4 is the highest score), which means it can produce original medicine and export products.

 

The biggest problem of the industry is the tardiness of enterprises in changing themselves. In 2004, the Ministry of Health decided that pharmaceutical enterprises would have to meet the GMP-WHO by 2006. However, the deadline has been extended by several times to mid 2008.

 

Medicine producers say that if they had to invest to meet the requirements set by MOH, they would go bankrupt. Enterprises have to spend VND30-35bil ($2.18mil) on average on a production line; moreover they also have to spend much more money on workshops and production management.

 

Cooperation – way to raise competitiveness

 

Under WTO commitments, tax rates will be lowered to 0-5% instead of 0-10% as currently applied. The average tax rate will be 2.5% after five years from the day Vietnam officially joined the WTO.

 

Hoang Mang, Director General of Cagipharm, said that it was very difficult for small companies to meet the standards; therefore, Vietnam-made products do not have high competitiveness.

 

Mr Mang said that while Vietnamese enterprises still could not meet GMP standards, they should do the outwork for other companies or produce under licences of other companies. Mr Mang believes that cooperation and alliance among domestic companies will help improve the competitiveness of Vietnam-made products.

 

However, Dr Pham Thi Viet Nga, Director General of Hau Giang Pharmaceutical Joint Stock Company, said that Vietnamese companies are weak in cooperating, supporting each other.

 

"Companies have to cooperate with each other effectively by using each other's services, or they will be killed when they are separate cells," Mrs Nga warned. (VNN)