Drug Price Policy in Vietnam: Letting the market set prices is not as easy as it seems

Abstract

In the Vietnamese pharmaceutical sector, from a situation of severe shortage and consequent widespread pharmaceutical smuggling, counterfeiting, speculation, and theft by health providers, stability was gradually regained by strict regulations on quality, but allowing prices to be set by the market under the economic reform policy initiated in 1986. However, this free market drug price policy was brought into question in 2003, when a 9% rise in drug prices during the first quarter sparked national attention. The Ministry of Health was pushed to more tightly control drug prices under pressure from the Government and public opinion. Drug price policies went through a series of revisions trying to balance the distortions from interfering with the market with the need to ensure that drug prices were affordable to the population and the health insurance fund. But the heavy burden of drug spending in the health system, both from high drug prices and over-prescription of more expensive brand-name drugs kept drug prices high on the public agenda.