TPP Threatens Made-in-Vietnam Medicine

The Trans-Pacific Partnership trade deal is expected to open the gate for foreign pharmaceutical producers to enter Vietnam and compete with local medicine producers, the Dau Tu newspaper reported on Oct 30. Like other free trade agreement, the Pacific Rim trade deal will raise the medicine import through lowering tax and abandoning of import barriers, the newspaper said, elaborating that import tax on drugs will be lowered from 2.5% currently to 0%. The competition will also change toward pharmaceutical firms producing patented medicine instead of generic drugs. The TPP will also lengthen the patent of a drug, which prevents local medicine producers to have access to the technology. Speaking with the newspaper, Chairman of Central Pharmaceutical Company No.1 (CPC1) Nguyen Thanh Binh said that foreign firms will take over market share eventually with this trade deal. However, Deputy Minister of Industry and Trade Tran Quoc Khanh, head of Vietnam’s TPP negotiation delegation, said that the deal will need to be ratified by member countries, which will not take effect earlier than 2018. Therefore, local companies still have some time to prepare themselves for the integration. According to the Drug Administration of Vietnam (DAV), local drugs producers can meet 50% of the market demand but most of them are simple drugs. In 2013, 41 hospitals and clinics using generic drugs, patent drugs account for 38% of total healthcare expenditure. Up to 144 patented drugs won bid with price 33% higher than average price of generic drug. The TPP negotiations started in 2005 and so far involved 12 countries, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam. (Dau Tu – Investment Oct 30 p13, suckhoedoisong.vn Oct 30)