Bribes continue to dictate Vietnam's medicine prices, trial uncovers

An unknown number of Vietnamese doctors have been accused of accepting bribes from a private pharmaceutical company in Ho Chi Minh City charged with importing fake cancer drugs from Canada.

The names of the doctors and their hospitals have yet to be revealed, but a Ho Chi Minh City court heard that at least VND7.5 billion ($330,000) had been handed over to them by VN Pharma to prescribe specific brands of medicines.

As a result, the company admitted to jacking up the prices of several imported drugs to cover the additional cost.

The revelation was made at the ongoing trial of former executives and staff of the firm that opened on Monday.

It is not immediately clear if the doctors actually took the bribes to prescribe the fake cancer drugs, but informal payments to doctors are far from rare in Vietnam.

In a paper released in 2011, Tuan Anh Nguyen, a researcher at the Hanoi University of Pharmacy, found that informal payments to doctors are "a dominant factor" in the high prices of older off-patent drugs that make up the lion's share of prescriptions in many emerging markets.

After interviewing doctors, pharmaceutical companies, government officials and pharmacists in both private and public hospitals, he concluded that around 40 percent of the price of drugs in Vietnam is typically spent on offering financial incentives to doctors, Reuters said in a report in early 2012.

His investigation broke down the different legal and illegal components that contribute to the cost of drugs in Vietnam, and found 40 to 60 percent of the final price was spent on convincing prescribers to offer particular medicines, and to persuade procurement officers in hospitals to buy them. The biggest share went to doctors.

The study, which was presented in Turkey at the International Conference for Improving Medicines in October 2011, said surveyed doctors explained that they took cash and other offers to make up for low salaries, and it was common for commissions from the pharmaceutical industry to become their main source of income, leaving reputable doctors who are determined to stay "clean" out in the cold.

The trial

Prosecutors said the case of VN Pharma was uncovered in September 2014 after the Ministry of Health asked police to clarify the origin of H-Capita, a cancer drug that the company had been importing since 2013.

In May 2014, VN Pharma won a contract from HCMC’s health department to supply cancer drugs.

The company’s customs declarations forms said the drug was manufactured by Helix Pharmaceuticals Inc. in Canada, but police later found that the company did not exist, according to prosecutors.

Documents vouching for the drug's quality, including ostensibly Canadian-issued certificates and the signature and stamp of the Vietnamese Embassy in Canada, turned out to be bogus, they said.

Nguyen Minh Hung, who was then CEO of VN Pharma, is alleged to have instructed staff to forge other documents and signatures from Helix Canada.

Tests conducted by health authorities later confirmed that up to 97 percent of the drugs were capecitabine, which should not be used on humans.

Hung, his deputies Nguyen Tri Nhat and Ngo Anh Quoc and four former members of staff are facing charges of forging paperwork and supplying fake cancer drugs. Prosecutors have proposed a sentence of between 10 to 12 years for Hung.

H&S shipping company director Vo Manh Cuong and Pham Anh Kiet, CEO of Sapharco, another drug company, are also in the dock.

According to the indictment, Hung told his staff to bribe doctors at local hospitals, but prosecutors have not been able to obtain enough evidence to charge this violation.

The VN Pharma case has gone to court on several occasions, but judges have ordered fresh investigations following new developments.