VIETNAM TO SET UP MEDICINES "RESERVE

Vietnam's Health Ministry is planning to contract three state controlled drugmakers to establish a national medicines reserve. The aim of the project is to boost the Vietnamese government's control over drug distribution, and purportedly allow it to protect the public from strong price fluctuations. Prices for antibiotics and other high-selling basic drugs have risen by as much as 50% since the beginning of 2005.

The three companies chosen will have to follow strict government guidelines over which medicines to reserve, and will be required to sell the drugs at below market price. They will be eligible for soft loans in order to purchase any treatments deemed essential for the reserve list. At present, roughly 70 "special" drugs are exclusively distributed by specially appointed companies in Vietnam.

The new scheme is the latest in a number of initiatives introduced in the country in order to control escalating drug prices. In January 2005, Vietnam's drug regulatory agency passed legislation banning foreign drugmakers from increasing the prices of medicines without prior approval.

In addition, the VAD is encouraging international drug firms to expand local manufacturing, reducing the country's reliance on imports in an attempt to reduce drug prices. Drug importers have blamed the price rises on consumer price inflation and recent currency fluctuations against the dollar.