Pharmaceutical sector's first commitment to WTO to be effective next year

19/06/2006 -- 10:40 PM

Ha Noi (VNA) - As from January 1, 2007, the Vietnamese pharmaceutical sector will implement its first commitment to the World Trade Organisation (WTO) in relation to the pharmaceutical market. Dr. Cao Minh Quang, Director of the Viet Nam Pharmacy Management Department, said at a conference on the Vietnamese pharmaceutical sector with opportunities and challenges at the threshold of WTO admission in Ha Noi on June 19 that from Jan. 1, 2007, foreign pharmaceutical businesses are entitled to opening branches in Viet Nam. He added that from January 1, 2008, foreign-invested businesses (with foreign partners holding less than 51 percent of business capital) will be allowed to import and export pharmaceutical products; and from January 1, 2009, foreign businesses licensed to conduct direct export and import operations of pharmaceutical products in Viet Nam will have the right to sell pharmaceutical products to Vietnamese distribution businesses. Experts described this as an opportunity for Vietnamese customers to buy quality products at lower costs and also a challenge to those Vietnamese pharmaceutical businesses which are now playing as distributors of foreign pharmaceutical companies. Five years after Viet Nam becomes a member of the WTO, the tax rate on pharmaceutical products will reduce to 2.5 percent; the tax rate of 44 percent on cosmetics will reduce to 17.9 percent when Viet Nam fully implement its commitments. The Swedish International Development Agency (SIDA) assessed that the Vietnamese pharmaceutical industry stands at 2.5-3 on the World Health Organisation (WHO) 4-grade scale; and that 86 percent of the total domestically-produced medicine meet the Good Manufacturing Practice (GMP). Addressing the conference, Public Health Minister Tran Thi Trung Chien affirmed that Viet Nam has already taken preparatory steps for the local pharmaceutical industry to internationally integrate by finalising legal documents, abiding by the principle of "publicity and transparency", creating favourable conditions for businesses to take international standards, reducing support for local enterprises and commercial barriers for foreign businesses. However, the Minister added, local businesses have shown low competitive edge, unprofessional management skills, improper understanding of international regulations and lack of capital. The minister therefore asked domestic pharmaceutical businesses to speed up cooperation, establish pharmaceutical groups and keep updated with international market information.-Enditem
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