Key Amendments in the Revised Vietnamese Pharmacy Law 2024

On November 21, 2024, the National Assembly officially passed the Law amending and supplementing a number of articles of the Pharmacy Law 2016, which will officially take effect from July 01, 2025. This crucial revision aims to resolve long-standing bottlenecks in the management, circulation, production, and supply of pharmaceuticals. With many groundbreaking new points, the Revised Pharmacy Law 2024 is expected to create a strong impetus for the Vietnamese pharmaceutical industry to develop in a modern direction, better meeting the public’s healthcare needs and international integration requirements. What are the key amendments in the Revised Vietnamese Pharmacy Law 2024? Viet An Law will analyze and clarify these points below.

Key amendments in the Revised Vietnamese Pharmacy Law 2024

• Amending and supplementing regulations on new pharmaceutical business methods;
• Specifying the rights and responsibilities of foreign-invested pharmacy business establishments;
• Expanding the rights of establishments involved in manufacturing, exporting, importing, and wholesaling drugs and medicinal ingredients;
• Reducing and simplifying certain business conditions and administrative procedures;
• To prescribe price management measures in accordance with the Price Law;
• Preferential policies and investment support in the development of the pharmaceutical industry.

Amending and supplementing regulations on new pharmaceutical business methods

The revised Law regulates two new business methods that were not covered in the current Law: the pharmacy chain model and the E-commerce drug business.

Regulations on pharmacy chains

• The Revised Pharmacy Law 2024 (Clause 8, Article 1) supplements Article 17a, stipulating that a pharmacy chain is a separate type of pharmaceutical business establishment with specific operating conditions, rights, and responsibilities.
• “Pharmacy chain” means a system of pharmacies operated by one facility organizing the pharmacy chain under a unified quality management system and a single trade name.
• Every facility organizing a pharmacy chain must satisfy the conditions, have at least 02 affiliated pharmacies issued with the Certificate of eligibility for pharmacy business, and a uniform quality management system to be applied to all pharmacies in the chain.
• The revised Law also supplements Article 47a, which stipulates the rights and responsibilities of facilities organizing a pharmacy chain, pharmacies in a pharmacy chain.
• Notably, this includes the right to rotate drugs and the right to rotate the person responsible for professional pharmaceutical activities among the pharmacies within the chain.

Regulations on E-commerce drug business methods

Clause 12, Article 1 of the Revised Law supplements Point a, Clause 1, Article 32 of the Pharmacy Law 2016, regulating the business of drugs and medicinal ingredients through e-commerce. Accordingly, the following cases are prohibited:

Prohibited acts when trading pharmaceuticals on E-commerce

Retail sales through the e-commerce method for the following drugs:

• Prescription drugs, except during medical isolation after an epidemic of a Group A infectious disease is declared in accordance with regulations of law on prevention and control of infectious diseases;
• Controlled drugs;
• Drugs on the List of drugs restricted from retailing.

Wholesales through the e-commerce method are prohibited for controlled drugs.

This regulation aims to adapt to the “chain” and “online” models, moving towards digital transformation and promoting a comprehensive supply chain. Furthermore, it ensures transparency and safety for consumers, enhancing control and preventing the uncontrolled trading of drugs on e-commerce platforms.

Specifying the rights and responsibilities of foreign-invested pharmacy business establishments

Clause 27, Article 1 of the Revised Pharmacy Law supplements Article 53a after Article 53 of the Pharmacy Law 2016, clearly defining the rights and responsibilities of foreign-invested pharmacy business establishments.

Drug and medicinal material manufacturers that have foreign investment have the right:

• Sell wholesale, deliver, and transport drugs and medicinal materials that they manufacture or are obtained by the manufacturers under processing contracts or transferred to Vietnam under technology transfer contracts to medical examination and treatment facilities, immunization facilities, and other health facilities; rehabilitation centers; state-owned drug and medicinal material testing facilities.
• Deliver and transport drugs under sponsorship, aid, humanitarian aid, and disease prevention and control programs to health facilities receiving sponsorship.

Drug and medicinal material importers that have foreign investment have the rights:

• Sell wholesale drugs and medicinal materials that the importers import to wholesalers of drugs and medicinal materials.
• Repurchase products which are transferred to Vietnam by the importers under technology transfer contracts; sell drugs and medicinal materials which are obtained by the importers under processing contracts or transferred to Vietnam by the importers under technology transfer contracts to wholesalers of drugs and medicinal materials.
• Import medicinal materials within the scope mentioned in the Certificate of eligibility for pharmacy business to supply them to manufacturers of drugs that are obtained by the importers under processing contracts or transferred to Vietnam by the importers under processing contracts or technology transfer contracts.

This change contributes to attracting FDI into pharmaceutical manufacturing and technology, promoting technology transfer in Vietnam, and then selling back to the domestic market, while increasing the efficiency of drug supply to medical facilities.

Expanding the rights of establishments

While the Pharmacy Law 2016 only allowed wholesale of drugs and medicinal ingredients to wholesale/retail establishments and medical examination/treatment facilities, the new regulation in Clause 19, Article 1 of the Revised Pharmacy Law adjusts and supplements the rights and responsibilities of drug/ingredient manufacturing establishments in Point e as follows:

Sell wholesale drugs and medicinal materials that it manufactures to:

• Medical examination and treatment facilities, immunization facilities, and other health facilities;
• Rehabilitation centers; state-owned drug and medicinal material testing facilities; science and technology organizations, training institutions conducting research and teaching activities related to pharmacy;
• Pharmacy business establishments that have been granted a Certificate of registration of investment in drug manufacture but have not been granted a Certificate of eligibility for pharmacy business for experimental production of drugs and evaluation of the drug manufacturing process…

Reducing and simplifying certain business conditions and administrative procedures

The new regulation in the Revised Pharmacy Law 2024 promotes administrative procedure reform in the registration of drug and medicinal ingredient circulation by:

• Previously, any drug intended for treatment required a marketing authorization (circulation registration certificate) from the Ministry of Health. This process was time-consuming and complicated, leading to a backlog of application files, expiring licenses that could not be timely renewed, contributing to drug shortages and limited patient access to new medications. The revised Law reforms the circulation registration procedures by classifying drugs and medicinal ingredients based on different levels of product nature.
• The new regulations also shorten the time and procedures for the issuance, renewal, change, and supplement of circulation registration certificates, aiming to increase timely patient access to drugs while still ensuring quality and safety.
• Furthermore, specific regulations are introduced for the dossiers, procedures for drug/ingredient registration, drug testing, and pharmaceutical business in general, to meet the requirements of national defense, security, natural disasters, catastrophes, and epidemics.

In addition:

• The processing time for dossiers for changes or supplements that do not affect the drug’s quality, efficacy, or safety is reduced from 3 months to 20 days. In cases referencing evaluation results, the time for issuing the circulation registration certificate is reduced from 12 months to 9 months.
• The procedure for confirming drug information content is abolished: Specifically, Clause 3, Article 78 of the Pharmacy Law 2016 is repealed by Clause 49, Article 1 of the Revised Pharmacy Law 2024. The abolition of this procedure aims to create a more open, effective environment and aligns better with management reality and international integration.

Regulating price management measures to align with the Law on Pricing

Clause 43, Article 1 of the Revised Pharmacy Law amends and supplements Article 107 of the Pharmacy Law 2016 on drug price management, with some new measures:

• Supplementing regulations on the requirement to publicly announce or re-announce the expected wholesale price for prescription drugs, ensuring that wholesale of drugs through intermediate stages does not exceed the announced price. Prescription drugs account for over 82% of the total drugs circulated on the market. This measure aims to combat speculation and price increases through intermediate layers.
• The Ministry of Health has the authority to propose a price adjustment to enterprises for drugs circulating on the market when the price is found to be higher than the highest announced price for a similar type or higher than the selling price in the country of origin. Furthermore, the Ministry can intervene if the difference between the expected wholesale price and the winning bid price exceeds the maximum difference stipulated by the Government.

Policies for incentives and investment support in the pharmaceutical industry development

The Pharmacy Law 2016 only prioritized research into the manufacture of medicinal materials from herbal materials available in Vietnam to serve the concoction and manufacture of herbal drugs and traditional drugs; the development of sources of herbal materials and herbal material farming areas; the conservation of genetic resources and the development of rare or special species of herbal materials. It did not regulate incentive policies for newly established investment projects.

The new regulation in the Revised Pharmacy Law 2024, in Clause 5, Article 1, amends and supplements Article 8 of the current Law as follows:

Each project on investment in establishment (including the expansion of such establishment project) in development of pharmaceutical industry which has a total investment capital of at least VND 3,000 billion and disburses at least VND 1,000 billion within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines will be eligible for the special investment incentives and assistance applied to the object specified in point a clause 2 Article 20 of the Law on Investment, including:

• Research into and development of technology, manufacture or transfer of technology for manufacture of herbal drugs, traditional drugs manufactured from domestic herbal materials, active ingredients, new drugs, original brand-name drugs, rare drugs, the first domestically manufactured generic drugs, high-tech drugs, vaccines, biologicals;
• Cultivation of herbal materials in disadvantaged areas or extremely disadvantaged areas;
• Research in the service of conservation and development of genetic resources of domestic precious, rare, and endemic herbal materials; creation of new varieties from genetic resources of herbal materials of high economic value.

This regulation aims to develop Vietnam’s pharmaceutical industry into a key sector, with policies designed to attract investment and further promote the research, development, and production of drugs and medicinal ingredients.

Above is the information on the issue of key amendments in the revised Vietnamese Pharmacy Law 2024. Clients who have related questions or need legal support, please contact Viet An Law Firm for the best support.