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CORRUPTION AND HIGH MEDICINE PRICES IN VIETNAM A QUALITATIVE STUDY

CORRUPTION AND HIGH MEDICINE PRICES IN VIETNAM A QUALITATIVE STUDY. Tuan Anh Nguyen , Rosemary Knight, Andrea Mant, Minh Quang Cao, Husna Razee. BACKGROUND. Our medicine price survey (WHO/HAI approach)

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CORRUPTION AND HIGH MEDICINE PRICES IN VIETNAM A QUALITATIVE STUDY

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  1. CORRUPTION AND HIGH MEDICINE PRICES IN VIETNAMA QUALITATIVE STUDY Tuan Anh Nguyen, Rosemary Knight, Andrea Mant, Minh Quang Cao, Husna Razee

  2. BACKGROUND Our medicine price survey (WHO/HAI approach) Median price ratio of Innovator Brands and Lowest Priced Generics in different categories and sectors in Vietnam in 2005

  3. METHODS • In-depth interviews: 43 (37 individuals and 6 groups) • Combination of purposive and snowball sampling • Initial informants: • Pharmaceutical industry: (Manufacturers; importers - wholesalers; retailers - private pharmacies) • Government medicine pricing authorities • Additional informants: • Prescribers and hospital pharmacists • Data management and analysis: • All interviews: Recorded, transcribed, coded using NVivo 8 • Two stage analysis: • Thematic analysis • Theoretically informed analysis

  4. FINDINGS High wholesale prices Patented innovator brands Patent Monopoly of suppliers Relative price inelasticity of demand Competition No regulated retail mark-ups Distributed by 3 FDI logistics companies via their Vietnamese counterparts Off-patent products & branded generics WE/NA source of medicines Perceived high quality of medicines Monopoly of prescribers Information asymmetry Market intelligence Distributed by domestic traders High retail prices of medicines Informal payments Asian source of medicines Perceived low quality of medicines Economies of scale Ineffective government control Model of interaction of reported factors causing high medicine prices in Vietnam FDI: Foreign Direct Investment, WE: Western Europe, NA: North America

  5. Example of medicine price components for one generic medicine

  6. Why and how informal payments occur? Product related factors Sale reps related factors Pharm. market factors Professional ethics Survival in the market Individual factors Systemic factors Remuneration system Healthcare processes and structures Personal values Taxation system Reputation Knowledge & skills Tender system Role of private sector Employment Advancement opportunity Socio-cultural factors Societal norms Prevalence of corruption Self-interest maximization Poor governance Regional differences Discretion Transparency Accountability Detection and enforcement

  7. ‘Trade-off’ model explaining corrupt behavior Self-interest maximization Governance Assets Financial reward from corruption Discretion Professional ethics Personal values Transparency Societal norms Reputation Knowledge & Skills Accountability Normalization of corruption Enforcement Employment Advancement opportunity Prevalence of corruption Corruption in Vietnam’s health sector Opportunity for corruption Remuneration system Rationalization Pressure for corruption Salary Note: ‘Corruption’ in this context means ‘misuse of entrusted power for private gain’

  8. Policy implications • Problems: Corruption – collusion between pharmaceutical industry and physicians, the root causes of high med prices • Solutions: To prevent collusion, 2 preconditions must be met: • Prescribers confronting the trade-off: losing assets and financial gain • Prescribers’ assets outweighing potential financial gain from corruption • Improve governance: Government • appropriate controls on discretion: Clarifying decision making process via SOPs; dividing tasks; strengthening information systems • transparency, accountability and enforcement: E-health; A contractual arrangement with individual medical practitioners • Development of service delivery markets with automatically enforced accountability  reform in health financing: government budget assigned to beneficiaries rather than healthcare providers

  9. Policy implications • Reduce financial gain from corruption: Pharmaceutical suppliers • Quality of medicines: Bioequivalent requirement for drug registration • Rationalization of local drug production and distribution network by tightening the criteria for license application and renewal: • Good practices: GDP, GSP, GPP • Minimum legal capitalization regulated gradually increased shorten the supply chain by removing all unproductive intermediaries • Ethical criteria for drug promotion: developed and implemented as legislative regulation with strict sanctions for violations • Promotion of pharmaceutical industry self-regulation: marketing code of conduct

  10. Policy implications • Increase prescribers’ ‘assets’ • Enhancement of higher standard of professional ethics: strengthening medical ethics content in the undergraduate curriculum; • Development and enforcement of health professional code of conduct: • Enhancement of knowledge and skills: continuing education programs • Most important is the establishment of a sufficient direct remuneration system, separate from ‘kickbacks’ and commission for pharmaceutical sales

  11. Acknowledgements Thank you Ministry of Education and Training, Vietnamese government for providing a scholarship to TA Nguyen to undertake this study. The ICIUM 2011 organizing committee for providing a scholarship to TA Nguyen to attend this conference.

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