Vietnam’s RAPID ECONOMIC

CHANGES AND ITS IMPLICATIONS ON

THE REGULATORY AFFAIRS

Dr. Truong Quoc Cuong

Drug Administration of Vietnam
Website: www.dav.gov.vn

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 VIETNAM

• Population:
- 86 million (by July,2008)
- 14th largest in the world -

• Area: 329,560 sq km

• Ethnics: 54.

• Language: Vietnamese

•Capital: HaNoi

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 ECONOMIC BRIEF

ƒBecame WTO member 2004

since 11/1/2007 9 .3
10
2005
2006
8 .5
ƒVietnam ranks the second
8 .4
8 .2

7.3
in the region regarding 6 .9 6 .7
6 .4
6 .9
6 .2
6 .6
6
growth rate 5.7
5.4
5.2
5.7
5.2
5.5
5 5
4 .6 4 .4 4 .5
ƒThe government commits
strongly to an open
economy and attractive
investment policies
ƒFull of advantage factors:
a
in

nd
ia
ng

s ia
e

s
na
Ch

ys
or

e
stability, cheap workforce,

la
Ko

in
ne
et

la

ai
ap

pp
Vi

do

Th
Ma
ng

ng

i li
In
Ho

Si

Ph
huge population, ….

Source: IMF, World Economic Database Sept 2006; Vietnam General Statistical Office
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 A RAPID ECONOMIC CHANGES

ª GDP growth 8.44(2007) against 7.34 (2003)

ª increased from $31bn to $52bn over the last 5 years,
ª ranking the third in Asia, follow China (11,3%) and India
(9%).
ª Quicly becoming a competitive regional manufacturing
base.
ª FDI: $20.3bn (2007) equivalent to total FDI of 5 years
(1991-1995).
ª Export value: $47.7bn (2007), 21% higher compared to
2006

Source: www.mofa.gov.vn

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 ECONOMIC INDICATORS

GROWTH

Economic indicator
2003 2004 2005 2006 2007 2008

• GDP growth (%)

7.2 7.6 8.4 8.17 8.44

• GDP value
38.7 41.6 43.75 60.7 72
(USD billion)
• GDP per capita
482 514 638 722 1,105
(USD)

Source: www.moi.gov.vn

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 CHANGES IN
PHARMACEUTICAL SECTOR
2005 2006 2007
GDP Growth rate: 8.4 % 8.17% 8.5%
Drug consumption per 9.85 11.23 12.69
capita: USD/person
Total drug consumption 817,396 956,353 133,45million
value: USD.34
Value of drug importation : 650,180 710,000 777,34milion
USD
Total registered foreign 266 312 370 enterprises
enterprises :
Total visa numbers of 1175 2629 2,635
imported drugs:
Total foreign-invested 12 13 25
pharmaceutical
manufacturers
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PHARMACEUTICAL SECTOR BRIEF

No of local pharmaceutical manufacturers:180

No of enterprises directly importing and exporting drugs: 89
companies
No of trading enterprises cross the nation: 800 companies.
No of foreign enterprises registered for supplying drugs into
Viet Nam: 370 companies.
No of retailers in Viet Nam: 41,500, reached to 2,000
people/1 retailer.

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 POTENTIAL OF
VIETNAM PHARMACEUTICAL MARKET
USD million
50% $1,600
% growth
45% total market forecast $1,432
$1,400
40% $1,243
MAT : Moving Annual Total $1,200
35% $1,080
$1,000
30% $939

25% $818 $800

20%
$726
20% $625
16% $600
15%$520 15% 15% 15% 15%
15% 12% $451 13%
$391
$422 $400
10% 8%
7%

5% $200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0% $0

Vietnam drug market = USD 1 billion in 2008

(Source: IMS) 8
 CHALLENGES
IN PHARMACEUTICAL INDUSTRY
Incomplete and limited preparations for integration.
The nature of Vietnam pharmaceutical industry,
specifically its development:
Unplanned
Not concentrated
At small scales
Overlapping
With unfair competition

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 CHALLENGES
in Drug im/export and distribution
There are no real drug distributors who can provide
professional distribution service, good after sales service,
and who have modern facilities.
Attention is not paid to investment in warehouse system
and transportation to conform with GSP.
Several enterprises who are entitled to directly import but
merely conduct importation on consignment to earn certain
fees (1/1/2009 !).
Mainly import fast moving or highly profitable drugs which
are not in accordance with the disease patterns, leading to
unfair competition in the market.
Some officials responsible for im/export are lacking of
knowledge about economy, laws and international trade.

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 CHALLENGES
IN REGULATORY AFFAIRS
) Rapid and complex evolution of drug market v.s the
slow change in structure and ways of functioning of
state agencies.
) Current regulatory structure not yet suitable to the new
situation.
) Qualified staff not adequate in number and lack of
continuous and regular training due to increasing
workload.
) Unclear borderline in terms of functions and duties of
DAV with other agencies under the MoH

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 CHALLENGES
IN REGULATORY AFFAIRS
) Becoming 150th WTO member: avails itself to both
opportunities and challenges.
) It requires:
) To enhance transparency in all regulatory
decisions/actions.
) To promote rules of law and demand a good
governance.
) Global and regional harmonization:
) It requires
) Strong commitments and actions towards ASEAN set
goals.

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 DAV’s EFFORTS

Enable a good business enviroment:

) Transparency:
) SOPs developed for all regulatory activities.
) Applied by all technical divisions under the DAV
) Administrative reform in regulatory activities.
) One stop-shop implementation.
) Applying ISO 9001 standard at the Drug Administration of
Viet Nam (DAV).
) Publicity: DAV’s decisions and requirements are made
public through either generic channels e.g. official
letters or through DAV’s website.
) Legal documents update.
) Data on registered medicines, import/export etc.
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 DAV’s EFFORTS

Enable a good business enviroment:

) Legislation: A completion of related legal documents
enacted following the passage of the Pharmaceutical
Law.
) In 2007 only, 18 legal documents were promulgated.
) Participation of businesses and public in the DAV’s
decision making process:
) comments encouraged during the legislation
development process;
) open dialogues to raise concerns and share difficulties:
with Pharmagroup, Incharm, Amcharm etc

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 DAV’s EFFORTS
Pursuing and promoting TQM concept:
) Quality related legislation issued: Implementing strategy of
ensuring total qualities, 5 standards of good practices
(GPs) are applying concurrently.
) GMP, GLP, GSP, GDP, GPP
) BA/BE testing requirements
) Pronouncing clear objective, strong mandate and road-map
for implementation and enforcement:
) 30/6/2008: deadline for compliance to ASEAN/WHO GMP
standards (except vaccines: 2011).
) End of 2010: deadline for compliance to GSP standards
(drugs) and 7/2008 for vaccines
) 2011: deadline for compliance to GDP.
) Enhanced inspection:
) increase its regular and irregular inspection and checking
towards drugs on the market.

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 GMP, GSP, GLP CERTIFICATION

Year 2003 2004 2005 2006 2007 2008

Good Manufacturing Practices (GMP)
ASEAN 41 45 46 31 24 17
WHO 0 0 11 35 50 63
Good Storage Practices(GSP)
11 30 42 64 79 90
Good Laboratory Practices (GLP)
26 32 43 60 74 80

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 DAV’s EFFORTS
Active in and supportive to regional
harmonization inititatives:
) Supportive and co-operative to ASEAN efforts towards the
harmonization:
) Contribution of initiatives to help achieve the harmonization
objectives.
) Standing firms with ASEAN’s set goal:
) Preparation made towards the implementation of ACTD.
) Speed-up the review of current regulations and technical guidelines to
accommodate ASEAN harmonization requirements;
) Strong commitment to the realization of regional MRA in GMP
inspection etc.
) Motivating itself to improve its capacity and capability to
catch up with other DRAs in and outside the region.

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 Thank You
for Your Kind Attention!

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