I. GENERAL PROVISIONS

1. Subjects of application:

a/ Public medical establishments that use funds from the state budget and other lawful sources (referred collectively to as budget sources) according to regulations for the purchase of medicaments, chemicals, transfusion fluids and supplies (referred collectively to as medicaments) in service of medical examination and treatment and prophylaxis demands with a total annual fund of VND 200 million or more each, for central public medical establishments, VND 100 million or more each, for provincial/municipal-level public medical establishments, or VND 50 million or more each, for rural/urban district- or provincial town-level public medical establishments, must organize biddings (unrestricted or restricted, or competitive goods offer) according to the provisions of the Bidding Regulation and the specific provisions in this guiding Circular.

b/ For public medical establishments having a total annual budget amount lower than the above-said level for the purchase of medicaments, their heads shall decide on appropriate and efficient forms of procurement such as competitive offer or direct procurement based on bidding results (within a period of less than one year) for medicaments applied by other public medical establishments in the same locality.

2. Scope of bidding for procurement: All medicaments (except for those mentioned at Point 3 below) for use in public medical establishments.

3. This Circular does not apply to the following cases:

a/ Purchase of medicaments, chemicals, vaccines and biologicals ordered by the State and paid with state budget funds; supply of blood and blood substitute preparations. The procurement and price management in these cases shall comply with the provisions of the Finance Ministry's Circular No. 05/2004/TT-BTC of January 20, 2004, guiding the management of goods and services ordered by the State and paid with state budget funds.

b/ Assorted oriental and Vietnamese medicaments (excluding finished-product medicaments).

II. SPECIFIC PROVISIONS

1. Public medical establishments, when organizing a bidding for purchase of medicaments, must abide by the provisions of the Bidding Regulation issued together with the Government's Decree No. 88/1999/ND-CP of September 1, 1999, and Decrees No. 14/2000/ND-CP of May 5, 2000, and No. 66/2003/ND-CP of June 12, 2003, on amendment and supplementation of the Bidding Regulation, and the Finance Ministry's Circular No. 121/2000/TT-BTC of December 29, 2000, guiding the bidding for procurement of tools, supplies, equipment and working facilities, applicable to state agencies, armed forces, mass organizations and state enterprises that use state budget funds. They shall also have to implement the following regulations:

a/ Elaboration and approval of plans on the bidding for purchase of medicaments:

- Basing themselves on the annual budget estimates assigned by competent authorities, heads of public medical establishments shall have to elaborate plans on the bidding for purchase of medicaments and submit them to competent authorities for approval: ministers or heads of ministerial-level or Government-attached agencies, for their attached public medical establishments, or presidents of provincial/municipal People's Committees (or their authorized persons), for local public medical establishments.

- The document submitted for the approval of a bidding plan must contain explanations for the following contents:

+ The form of selecting contractors and mode of bidding applicable to each bidding package or commodity item;

+ The annual plan on budget capital sources for the purchase of medicaments;

+ The plan on the volume and value of medicaments put out to bidding according to their generic names in bidding packages. For multicomponent medicaments, all components of the medicaments must be indicated in their generic names;

+ The plan on the volume and value of medicaments put out to bidding according to their specific names in the bidding package;

+ The time of bidding for each bidding package;

+ The type of contract for the supply of medicaments;

+ The time of contract performance.

- Bidding plans shall be worked out for every six months or every year and sent to competent bodies for approval in January or June every year at the latest.

- The time for approving bidding plans shall be 7 working at most days after the complete dossiers are received according to regulations.

b/ Bidding package prices in bidding plans:

- Establishments assigned to organize a bidding for purchase of medicaments shall, basing on common market retail prices of assorted medicaments and referring to price notices of the Vietnam Drug Administration of the Health Ministry and the State-prescribed retail price brackets of a number of essential medicaments, set bidding package prices in bidding plans and submit them to competent authorities for approval. The prices of medicaments in bidding packages must not be higher than the common market retail prices of such medicaments at a certain time.

c/ The making, contents and approval of bidding dossiers shall comply with the Bidding Regulation issued together with the Government's Decrees No. 88/1999/ND-CP of September 1, 1999, No. 14/2000/ND-CP of May 5, 2000, and No. 66/2003/ND-CP of June 12, 2003. Besides, bidding dossiers for medicament purchase shall be supplemented as follows:

- Contractors may bid for supply of one or more medicaments in a bidding package, which they are able to supply;

- Bid solicitors shall evaluate bid dossiers by each commodity item in each bidding package.

- The names of medicaments stated in bidding dossiers must be generic names. If a bidding is organized for the purchase of multi-component medicaments, all components of the medicaments must be indicated in their generic names. If in bid invitations medicaments are expressed in their specific names, such must be included in approved annual bidding plans and be approved by authorities competent to decide on the procurement according to the provisions of law, on the basis of opinions of heads of medical establishments after reaching agreement with the establishments' medicament and treatment councils. Heads of public medical establishments shall be answerable for their decisions.

- The volume, content, unit of measurement, packing specifications, and preparation form of each medicament.

- Requirements on medicament quality:

+ Ensuring the quality standards registered with the Vietnam Drug Administration;

+ The testing paper for each lot of medicament according to regulations;

+ The valid GMP certificate of the medicament-manufacturing factory, granted by a competent body;

+ The permit for circulation of products in Vietnam, granted by a competent body;

+ For import medicaments: the permit for circulation in the manufacturing country is required;

+ Use duration: the minimum remaining use duration is 18 months for medicaments with an use duration of 3 years or more; or 12 months for medicaments with an use duration of 2 years or less (counting from the time of goods delivery);

+ Medicament labels: shall comply with the labeling regulation, with usage instruction slips in Vietnamese (even for import medicaments).

- Bid-winning contractors must:

+ Commit to withdrawing from circulation medicaments in cases where medicaments which have been delivered fail to satisfy quality requirements or where competent bodies issue withdrawal notices but bid solicitors are not at fault;

+ Commit to supplying medicaments at bid-winning prices (including cases where under the signed contracts medicaments are supplied many times a year);

+ Commit to keeping to the schedule of goods supply;

d/ Depending on the demands for the volume of medicaments, units may organize biddings every six months at least.

e/ Conditions for participation in a bidding: units and individuals of all economic sectors (including foreign companies or partnerships with foreign parties established and operating under Vietnamese laws) may participate in a bidding, if fully meeting the conditions set at Point 3, Section II of the Finance Ministry's Circular No. 121/2000/TT-BTC of December 29, 2000, and the following specific provisions:

- Having the medicament business permit granted by a competent body;

- Being capable of supplying medicaments and ensuring their quality in cases where medicaments are supplied many times a year;

- Paying bidding participation guarantee money at the request of the bidding-organizing agency before the time of bid closing;

- Using valid sale invoices issued by finance bodies;

f/ Bidding results: Bid-winning prices must not be higher than the bidding package prices in approved bidding plans and than the common market retail prices at the time of bidding.

2. Where arise demands for purchase of additional quantities of some medicaments included in the bidding plan in the year, units may apply the form of direct procurement according to the provisions of Point 2, Section III of the Finance Ministry's Circular No. 121/2000/TT-BTC of December 29, 2000.

3. In cases where arise demands for additional purchase of some medicaments not included in the bidding plans in the year in a small volume and value (under VND 10 million), heads of public medical establishments may apply one of the following forms of procurement: competitive offer, contractor designation on the basis of using the bidding results (within a period of less than one year) for medicaments of other public medical establishments in the same locality, ensuring that the buying prices shall not exceed the bid-winning prices and bear responsibility for their decisions.

4. Responsibilities to evaluate and approve bidding plans and results:

Ministers, heads of ministerial-level agencies and Government-attached agencies (for their attached public medical establishments), presidents of provincial/municipal People's Committees or their authorized persons (for local public medical establishments) shall approve bidding plans and results on the basis of the evaluation by their assisting units.

III. INSPECTION AND HANDLING OF VIOLATIONS

The inspection of biddings for supply of medicaments at public medical establishments is stipulated as follows:

1. The Health Ministry's Inspectorate shall inspect biddings for supply of medicaments organized by public medical establishments under the Health Ministry; inspectorates of ministries and branches shall inspect biddings for supply of medicaments organized by public medical establishments under ministries' and central branches' management; inspectorates of provincial/municipal Health Services shall inspect biddings for supply of medicaments organized by public medical establishments in their respective localities.

2. Inspections shall be carried out under plans approved by the Health Minister, ministers, heads of branches, or presidents of provincial/municipal People's Committees (or their authorized persons) upon detecting signs of violating law on bidding for supply of medicaments, at the proposal of inspecting agencies defined in Item 1, Section III of this Circular, or at the request of the Health Minister, ministries, branches or directors of provincial/municipal Health Services, which are related to the specific cases of bidding for supply of medicaments.

3. Inspection contents shall comply with the provisions of Point 4, Clause 25, Article 1 of the Government's Decree No. 66/2003/ND-CP of June 12, 2003, amending and supplementing a number of articles of the Bidding Regulation issued together with the Government's Decrees No. 88/1999/ND-CP of September 1, 1999, and No. 14/2000/ND-CP of May 5, 2000.

4. Handling of violations: In the course of inspection, if detecting violations, depending on the nature of the violations, inspectorates shall impose sanctions according to their competence defined in the State's inspection law.

IV. ORGANIZATION OF IMPLEMENTATION

1. Biannually, the Health Ministry (the Vietnam Drug Administration) shall publicize on the mass media and notify medical establishments of import prices and retail prices (for import medicaments), ex-warehouse prices and retail prices (for home-made medicaments) for all medicaments which are permitted for circulation in Vietnam by the Health Ministry.

2. Public medical establishments under the Health Ministry, ministries or central branches shall organize biddings for supply of medicaments according to regulations.

3. For local medical establishments: Provincial/municipal Health Services shall base themselves on the use demands of local medical establish-ments to submit to presidents of provincial/municipal People's Committees for consideration and decision to select one of the following three forms:

a/ Provincial/municipal Health Services shall organize biddings for medicaments which have regular and stable use demands for large volumes for all local public medical establishments. Local public medical establishments shall base themselves on the bidding results to sign contracts on supply of medicaments according to their demands.

b/ Provincial/municipal Health Services shall direct one of provincial-level general hospitals to organize a bidding for purchase of medicaments right in the first quarter of the year. The remaining units in the provinces shall, basing on the bidding results, sign medicament purchase contracts with the bid-winning contractors or organize by themselves biddings but the bid-winning prices must not be higher than the bid-winning prices of general hospitals designated to organize biddings by provincial/municipal Health Services. For public medical establishments in deep-lying and remote areas and islands, the medicament-supplying prices shall not include rational transportation costs.

c/ To assign public medical establishments to organize biddings for supply of medicaments according to their medicament use demands. Bid-winning prices must not exceed bidding package prices in approved bidding plans and common market retail prices at the time of bidding for medicaments.

4. Handling of transitional problems after the issuance of the Circular:

a/ For bidding packages for which bidding dossiers have been issued before the effective date of this Circular, the provisions of the Bidding Regulation issued together with the Government's Decree No. 88/1999/ND-CP of September 1, 1999, and Decrees No. 14/2000/ND-CP of May 5, 2000, and No. 66/2003/ND-CP of June 12, 2003, on supplementation thereof, and their guiding documents, shall apply.

b/ For bidding packages for which bidding dossiers are issued after the effective date of this Circular, the provisions of this Circular shall apply.

5. Biannually and annually, public medical establishments shall send written reports on the situation of bidding for procurement of medicaments to their superior managing agencies.

6. Annually, ministries, ministerial-level agencies, Government-attached agencies, and provincial/municipal People's Committees shall have to sum up and send reports on the situation of bidding for procurement of medicaments by ministries, branches and localities to the Finance Ministry and the Health Ministry before December 31 for sum-up and report to the Prime Minister.

7. Ministers, heads of ministerial-level agencies, heads of Government-attached agencies, and presidents of People's Committees of all levels shall decide on and organize the inspection of biddings for procurement of medicaments by units under their respective management according to the current Bidding Regulation and the guidance in this Circular.

8. Finance bodies of various levels shall have to coordinate with health bodies of the same levels in organizing regular or irregular examinations on the situation of bidding for procurement of medicaments by units under their respective management.

9. This Circular takes effect 15 days after its publication in "CONG BAO." Any problems arising in the course of implementation should be reported to the Health Ministry and the Finance Ministry for consideration and settlement.