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I was in Vietnam again for a few days last week and thought I would share one interesting aspect of the market.
Tender Business in Vietnam
Business in Vietnam is significantly different from Pakistan as people concerned with international business know. I would skip the details, mention a few things to set the context, and then move to the point I wish to raise today.
Vietnam government takes entire responsibility for public healthcare. The facility is mediated through health insurance. 90% or more healthcare is delivered through government hospitals; 10% or less through private hospitals.
Purchase by government is through tender and is done at three levels. All government hospitals float tenders; Provincial health authorities called Service of Health (SoH) float tenders and central government floats tenders via Ministry of Health (MoH). According to IMS (now IQVIA), 60% business is tender while 40% is private market. Do remember that this business includes consumer healthcare products also.
In 2016, Vietnam government decided to initiate national tender. The concept was to select some products, compile the total required quantity and float a single tender nationally through MoH. Basically, it was more of a central price negotiation for a fixed quantity. The hospitals and SoH would not float tenders for these products. They would purchase their required quantities directly from approved company at the tender approved price. They would be allowed to purchase minimum 80% and maximum 120% of the quantities communicated to MoH.
In 2016, only selected oncology products were taken in the first ever national tender. Due to selected nature of products, the activity remained low profile.
In 2017, five molecules and six products were picked up; meropenem had two strengths. This time it caused stir and buzz among all pharma companies. They realized that the winning companies would get entire tender business of these molecules. They competed fiercely and whole-heartedly. The tender process was completed smoothly.
In 2018, twenty molecules have been picked up for national tender. The process is underway already.
The other remarkably good thing about tender business in Vietnam is that all information is displayed on health authority websites. It certainly brings transparency to the process.
Central and Provincial governments in Pakistan have been experimenting with various ideas in tender business. Centralization, decentralization, re-centralization and re-decentralizations have been successively tried but nothing has really worked.
No country on the earth can claim to be corruption free. And this is not even a discussion on corruption. This discussion is about systems & processes and whether people are subservient to system or system is subservient to people.
The countries with lesser corruption have stronger systems and processes which have to be followed by all. Countries with higher corruption have weaker systems and processes which are easily manipulated, exploited and subverted by people.