Vietnam Investment Review: CPTPP Signals Pharma Breakthrough
The market for pharmaceuticals in Vietnam is developing rapidly, in step with the country’s growing and aging population, rising per capita income, and increasing awareness of foreign brand-name drugs, which many Vietnamese consumers consider to be more reliable than generics and local brands. Naturally, Vietnam has become an attractive investment destination for foreign pharmaceutical companies eager to target new customers.
The government is doing its part to encourage this investment, as seen by its participation in international free trade agreements and ongoing legislative reform. A revised Law on Pharmacy was issued in 2016 followed by subsequent guiding legislation, but obstacles to overseas investment remain. One thing is certain: the business environment in the pharmaceutical sector is constantly changing.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a multilateral trade agreement signed by 11 countries on both sides of the Pacific, officially came into force in Vietnam in January. Among its provisions, the CPTPP requires each of its members to have a system of pharmaceutical patent linkage. Prior to granting marketing approval to any generic drug, Vietnam must notify the original drug’s patent holder of the generic drug’s application for approval.
By virtue of such notice, the patent holder would then have adequate time and opportunity to seek judicial or administrative proceedings and expeditious remedies, such as preliminary injunctions, for the timely resolution of disputes concerning the validity or infringement of an applicable patent.
Instead of the above-mentioned system, Vietnam may alternatively adopt a non-judicial regime to preclude the issuance of marketing approval to generic drugs based on the available patent-related information. This may come from co-operation between Vietnam’s intellectual property office and the Drug Administration of Vietnam, the marketing applicant, or the concerned patent holder.
Within the framework of the CPTPP, Vietnam also reached agreements on marketing approval with some other members such as Japan, New Zealand, and Canada. By means of such agreements, Vietnam has the right to establish conditions, limitations, or exceptions when implementing the obligations set forth under Article 18.53 of the deal.
Changes in the Legislative Framework
The government’s Decree No. 54/2017/ND-CP of May 2017, the primary legislation guiding the implementation of the Law on Pharmacy, took effect in July 2017. Subsequently, last year two noteworthy guidance documents were issued for the pharmaceutical sector.
The first was Circular No. 07/2018/TT-BYT of the Ministry of Health (MoH), effective from June 2018, on guidelines for some articles on pharmacy business of the Law on Pharmacy and Decree 54. The other was the government’s Decree No.155/2018/ND-CP of the government, effective in November 2018, amending some regulations related to investment and business conditions under the management of the MoH.