You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

December 7, 2020

New Decree on Administrative Penalties in Vietnam Healthcare Sector

Subscribe to Updates
Informed Counsel

Vietnam’s efforts against the outbreak of COVID-19 in the country have been largely successful, and despite two distinct spikes of local transmission, in both cases the spread was halted relatively quickly. As these complications from the COVID-19 pandemic have been playing out in Vietnam throughout 2020, it became clear that effective and strong enforcement of healthcare regulations, especially those related to disease control, was crucial.

On September 28, 2020, the government of Vietnam took action on this by issuing Decree No. 117/2020/ND-CP (“Decree 117”), which provides penalties for administrative violations in the healthcare sector. Some provisions of Decree 117—mostly those related to disease control and epidemic situations—took effect immediately, with the remainder taking effect on November 15, 2020. The decree, which was based on a draft proposed by the Ministry of Health, replaced Decree No. 176/2013/ND-CP on the same matter.

The main administrative penalties under Decree 117 are reprimands and fines. Depending on the severity of the violation, violators may also be subject to additional penalties such as suspension of a certificate of eligibility for pharmaceutical business (CEPB), a license for healthcare operation, or other licenses and practicing certificates for up to 24 months; confiscation of illegal items; suspension of operations for up to 24 months; or deportation. Furthermore, remedial measures such as forced return of illegal earnings, compulsory quarantine and medical examination, public correction, or compulsory payment of treatment fees may also be applied.

Some key highlights of Decree 117 are discussed below.

  • In relation to disease control, the maximum fine for failure to comply with quarantine is doubled to VND 20 million (USD 855) for infected people of type-A contagious diseases, and VND 10 million (USD 427) for those who are not infected but are asked to quarantine. Failure to declare one’s contagious disease to a doctor could be subject to a fine up to VND 3 million (USD 130), which is 10 times higher than the penalty provided in the repealed decree. These penalties took effect on September 28, 2020.
  • Exploiting an epidemic situation by price gouging of medicine or medical supplies is subject to a fine of up to VND 30 million (USD 1,300) for individuals or VND 60 million (USD 2,600) for companies and organizations. Violators may also be forced to suspend operations (which includes CEPB suspension for pharmaceutical business entities) for up to 24 months, and any illegal earnings will have to be returned to the buyers or sellers.
  • The decree also provides a number of new penalties for the pharmaceutical sector. A fine of up to VND 10 million (USD 427) is imposed for various violations in pharmaceutical practice, such as being the chief pharmacist at two or more pharmaceutical business entities simultaneously, or practicing pharmacy not in accordance with the scope of practice stipulated in the relevant certificate. Engaging in the sale of pharmaceuticals without a CEPB or at an address different from the one stated in the CEPB is subject to a fine of up to VND 120 million (USD 5,155). The operations of the violator may also be suspended for up to nine months.
  • Borrowing or lending a CEPB is punishable by a fine of up to VND 60 million (USD 2,600) and suspension of the CEPB for up to 24 months.
  • Foreign-invested entity (FIE) importers that conduct activities directly related to drug distribution (except for drugs manufactured in Vietnam by the FIE importer) could be subject to a fine of up to VND 160 million (USD 6,900).
  • For a drug that has been granted a marketing authorization in Vietnam, failure to notify the relevant authority of the recall of that drug in any country other than the country issuing the certificate of pharmaceutical product could subject the violator to a fine of VND 140 million (USD 6,000). The same fine is also applicable to submission of drug registration documents that are not based on actual research or manufacturing data. Remedial measures include compulsory recall of the drug and recommending that the relevant authority revoke the marketing authorization.
  • Decree 117 also introduces some provisions on violations relating to the use and sale of liquor and beer. Employing minors in advertisements for liquor and beer is subject to a fine of up to VND 40 million (approximately 1,700). Selling or providing liquor and beer to minors is subject to a fine of up to VND 3 million (USD 130) for individuals or VND 6 million (USD 260) for companies and organizations.

Altogether, Decree 117 sharply escalates the penalties for some violations that have been proliferating amid the COVID-19 pandemic, while some other penalties remain unchanged or are slightly amended. Multinational pharmaceutical companies should note, in particular, the new penalties applicable to FIE importers, as drug distribution remains a sensitive area in Vietnam, and enforcement can be unpredictable.

Download Full Article
Related Professionals

Industries

Life Sciences

Practices

Regulatory Affairs

Location

RELATED INSIGHTS​ 

June 24, 2024
Thailand’s Minister of Public Health recently promulgated the Ministerial Notification Re: Category 5 Narcotics Which Are Not Cannabis or Hemp Extract and Whose Consumption is Permitted for Treatment of Disease or for Research Purposes (2024). The notification took effect on April 23, 2024. The substances whose regulatory controls are affected by this new notification are psilocybin mushroom (Psilocybe cubensis (Earle) Singer), opium poppy (Papaver somniferum L. and Papaver bracteatum Lindl.), and other plants in these genera from which opium, opium alkaloids, psilocybin, or psilocin may be derived. As a result of this notification, these substances are now classified as category 5 narcotics that can be applied in medical treatment. Without the implementation of this notification, patients could not access newly developed medicines containing these substances, as Thailand’s Narcotic Code prohibits the possession and use of category 5 narcotics. Nonetheless, this does not mean that psilocybin mushrooms and opium can be used without any conditions. There is still a long process to go through before these substances can be used in medical treatment or clinical studies. Under the new notification, the FDA must first approve any medicinal drug formulation containing any of the above substances, and subsequently, the production must be approved for medical use or research purposes. The importation of medicinal drug formulations containing psilocybin mushrooms or opium is not allowed. This seemingly small regulatory change addresses the previous legal obstacle to the research and development of such medicines. According to the previous regulation, a physician or researcher could apply to the Thai FDA for a license to produce or possess medicines containing the aforementioned narcotics. However, production and consumption are considered different activities, and consuming a narcotic-containing medicine, even if it was produced under a valid license, is prohibited by the Narcotics Code and is punishable by imprisonment,
Read More
June 11, 2024
Advances in biotechnology have enabled the development of a range of new agricultural tools. From DNA sequencing to plant tissue culture and gene editing, these advances are facilitating the development of better crops. Genetically modified organisms (GMOs) are one well-known example of agricultural biotechnology. GMOs are organisms whose genetic material has been artificially altered by inserting a piece of foreign DNA. This DNA may be synthetic in origin or sourced from other organisms. Genome editing (also called gene editing or GEd) involves making precise changes to an organism’s genome without the integration of foreign DNA elements. Several approaches to genome editing have been developed. A well-known one is called CRISPR-Cas9, in which scientists make precise “cuts” in the DNA to create a new genetic variation. Unlike with GMOs, this introduces only minor modifications that are indistinguishable from natural mutations, typically by transplanting genes that code desirable traits from one species into another. GEd technology has been recognized and supported by the Food and Agriculture Organization of the United Nations (FAO). Thirteen FAO-member countries who are also members of the Organization for Economic Cooperation and Development (OECD) announced their support of the use of GEd technology for commercial uses and consumption at a recent WTO meeting. In addition, over 40 countries around the world, such as Argentina, Australia, Brazil, Canada, Chile, China, England, Japan, Kenya, the Philippines, Russia, the UK, and the US, have published policies emphasizing that foods free of transgenes (i.e., foods that do not contain genes transferred from external sources) are not GMOs, concluding that GEd plants are as safe as normal plants. In February 2024, the European Parliament approved new genomic techniques (NGTs), or GEd. As a result, plants that are produced using GEd technology are not classified by the EU as GMOs, and the EU
Read More
February 14, 2024
Thailand is preparing to implement new rules on drug importation for clinical studies. The Medicines Regulation Department of Thailand’s Food and Drug Administration (Thai FDA) first issued the Notification Re. Detailed Requirements for Drug Importation into Thailand for Clinical Studies almost a year ago, and the notification is expected to come into effect on March 1, 2024. Key Provisions The notification aims at enhancing the efficiency of conducting clinical studies while ensuring the protection of human subjects participating in such studies within Thailand. Some of its key provisions include: Definition of Clinical Study. The notification defines a “clinical study” as a study of a medicine involving human subjects, conducted to provide supporting evidence for the registration of a medicinal product in Thailand or other countries, including for additional indications or variations of a registration dossier. Compliance with ICH GCP. Clinical studies conducted in Thailand must adhere to the current edition of the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (ICH) Good Clinical Practice (GCP) guidelines. Clinical Trial Application. Sponsors are required to submit a clinical trial application along with supporting documents to the Thai FDA for approval before commencing a clinical study. The permit remains valid for five years and is renewable. Supply of Investigational Drugs. Sponsors must obtain investigational drugs from manufacturers compliant with Good Manufacturing Practice (GMP) standards as recognized by the Thai FDA. Postapproval Obligations. The secretary-general of the Thai FDA may impose postapproval conditions or order investigators to conduct or suspend certain activities to ensure human subject protection and regulatory compliance. Regulatory Oversight. The Thai FDA is responsible for inspecting and overseeing the regulatory compliance of clinical studies, including during prestudy, ongoing, and poststudy phases. The Thai FDA may also conduct inspections of clinical studies conducted overseas. The Thai FDA
Read More
December 15, 2023
As part of its membership in Lex Mundi, Tilleke & Gibbins has published an updated edition of its Guide to Doing Business in Thailand for 2023. This guide outlines the key factors for starting and operating a business in the Thai market. Issues covered include: Investment incentives Financial facilities Exchange controls Import and export regulations Structures for doing business Requirements for the Establishment of a Business Operation of the Business Cessation or Termination of the Business Labor legislation, relations, and supply Tax Immigration requirements This publication is part of Lex Mundi’s Country Guides series prepared by member firms in more than 100 jurisdictions worldwide. The guides serve as a useful resource for planning international business strategy and researching new markets. The full Guide to Doing Business in Thailand is available through the button below.
Read More