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could be subject to a fine up to VND 3 million (USD 130), which is 10 times higher than the penalty provided in the repealed decree.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​ 

November 23, 2022
The delisting of cannabis as a controlled narcotic in Thailand on June 9, 2022, was a breakthrough moment for the industry.  Not only are farmers and others in the industry elated that such a step was taken, it has triggered the establishment of an abundance of cannabis dispensaries in Bangkok and other popular domestic and international tourist destinations in Thailand, including Chiang Mai, Pattaya, Phuket, and many islands. Vulnerable populations, such as children, accessing cannabis has also become a hot-button issue. Thailand’s Ministry of Public Health (MOPH) was initially criticized by some for its policy of allowing cannabis to be sold with few restrictions. On June 17, 2022, the MOPH followed up with the Announcement Re: Controlled Herbs (Cannabis) under the Thai Traditional Medical Knowledge Act, which seemed to implement a viable mechanism to regulate cannabis dispensaries. This announcement contained prohibitions on selling cannabis to vulnerable populations (minors, expectant women, and breastfeeding mothers) and on smoking cannabis in public. Furthermore, the draft Cannabis and Hemp Act includes provisions related to sales and distribution channels and advertisements for particular dispensaries. However, the draft act has been delayed due to disagreements among some political parties during the reading of the legislation, and is unlikely to be implemented in 2022 as had been widely expected.  The tug-of-war among the political parties has caused concerns about whether the country’s recent liberalized cannabis policy will be revisited and cannabis relisted as a narcotic. With this uncertainty over when the draft Cannabis and Hemp Act will be implemented, the MOPH has focused on identifying gaps in current regulation that might allow the misuse of cannabis. The minister of the MOPH has announced that the MOPH announcement of June 17, 2022, will be repealed and replaced by the November 11, 2022, Announcement Re: Controlled Herbs (Cannabis).
Read More
November 14, 2022
Following the delisting of cannabis grown in Thailand as a narcotic substance on June 9, 2022, many have explored the applications of cannabis in various fields, including medicine, healthcare, food products, cosmetics, and animal feed. For example, a poultry farm in northern Thailand conducted an experiment jointly with Chiang Mai University, mixing crushed cannabis into poultry feed and water. The experiment showed several benefits of this cannabis feed. Birds that were fed cannabis had lower mortality rates and achieved superior body mass, with increased levels of protein, fat, and moisture in the meat, leading to this method of organic bird farming yielding higher profits. Despite the results of this experiment, the mechanisms and action of cannabis in animal feed are still not yet fully understood, and there are concerns about the possible effects on human health of consuming cannabis-fed poultry. Until recently, cannabis regulations focused solely on the safety of use by humans, and there were no regulations on the use of cannabis in animals. However, on October 11, 2022, the Department of Livestock Development (DLD) published Notification Re: Guidelines on the Use of Hemp and Marijuana as Especially Controlled Animal Feed or Their Use as Ingredients in Especially Controlled Animal Feed in the Government Gazette. In general, the DLD notification requires that animal feed containing cannabis be shown to benefit the animals without causing concern for their safety. According to the Animal Feed Quality Control Act B.E. 2558 (2015), especially controlled animal feed must be registered before it can be manufactured domestically or imported into Thailand. The DLD notification lays down the following evaluation criteria for registration of animal feed containing cannabis: It is prohibited to use cannabis (both hemp and marijuana) apexes (i.e., leaf tips), inflorescence, or seeds—including extracts from apexes, inflorescence, or seeds—as especially controlled animal
Read More
October 14, 2022
Interest in organic farming, soil health, and regenerative agriculture has increased rapidly in recent years, and the demand for biological and organic fertilizers has accordingly undergone dramatic growth. Biological fertilizers contain specific levels of microorganisms (such as nitrogen-fixing bacteria); organic fertilizers similarly contain microorganisms and typically come from animals and plants, such as livestock manure and crop residues. Although responsible fertilizer use is still necessary to prevent unintended effects, these “living fertilizers” can boost yields and promote plant productivity without many of the adverse environmental effects and safety concerns of chemical fertilizers. This makes them highly sought after for organic farming, and prized by agricultural operators looking to promote soil health as a bedrock of sustainable agricultural practices. As the global trade for organic and biological fertilizers has scaled up, producers and agribusiness companies have expanded organic and biological fertilizer offerings to new markets. Not only do different countries have their own regulations for fertilizers in general, but they also often have specific requirements and rules for biological and organic fertilizers. This guide provides fertilizer producers and traders with an overview of the legal landscape for these fertilizers in three major Southeast Asian markets so that businesses can make their fertilizers available and foster sustainable agricultural practices in the region. The full Biological and Organic Fertilizers in Indonesia, Thailand, and Vietnam guide can be downloaded through the button below.
Read More
August 25, 2022
On July 27, 2022, Myanmar’s Ministry of Commerce (MOC) issued Newsletter No. 8/2022 to effectively ban foreign companies and foreign joint ventures from exporting value-added beans, corn, and sesame. This newsletter repealed Newsletter No. 2/2020, which had prescribed the criteria for beans, corn, and sesame to be considered “value-added” crops. These criteria had to be fulfilled in order for these commodities to be exported in accordance with Notification No. 24/2019, which had permitted foreign companies and foreign joint ventures to purchase seven categories of commodities from local manufacturers for export, subject to certain terms and conditions. These include: Meat and fish; Value-added crops; Pulp and paper; Seeds; Refined metals; Semi-finished or finished valued-added fruit products; and Timber-based furniture. With the repeal of the conditions in Newsletter No. 2/2020, foreign exporters are left with no reference criteria for how to achieve “value-added” status for beans, corn, and sesame, and thus will not be able to submit a complete application for the necessary export license. However, exportation of the other items in the list above remains unaffected and open to foreign exporters who meet the applicable requirements. The MOC explained their decision to revoke the permitted criteria by noting that some foreign companies were not actually producing beans, corn, and sesame that fulfilled the criteria for value-added status as laid out in Newsletter No. 2/2020, but were falsely exporting their goods as “value-added crops.” The revocation of the export criteria for beans, corn, and sesame took immediate effect. For more details on these export restrictions, or on any aspect of importation and exportation regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].
Read More