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could be subject to a fine up to VND 3 million (USD 130), which is 10 times higher than the penalty provided in the repealed decree.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

February 22, 2021
Following the recent imposition of sanctions on Myanmar individuals and companies by the US, the UK and Canada have now imposed new sanctions. As with the US sanctions, these new measures impact UK and Canadian citizens and companies, and non-UK and non-Canadian companies and citizens with interests in those jurisdictions. The EU has indicated that it is planning to issue similar sanctions in the near future. New UK Sanctions In addition to the 16 individuals already sanctioned by the UK government, on February 18, 2021, the UK government announced that three individuals have been sanctioned for serious human rights violations and are now subject to asset freezes and travel bans. The full list of Myanmar individuals and companies sanctioned by the UK is available on the website of the Office of Financial Sanctions Implementation. Breaches of UK financial sanctions are criminal offences punishable in the UK by up to 7 years imprisonment and heavy fines. New Canadian Sanctions Also on February 18, timed to coincide with the UK sanctions, new Canadian sanctions were imposed on nine individuals. As with the UK, Canada already had a number of individuals in the Myanmar military on its sanctions list, and the new additions bring the total number of individuals sanctioned by Canada to 54. All assets of these individuals in Canada are now frozen, and they are banned from travelling to Canada. Canadian businesses or entities may not do business with any of the 54 individuals. Full details of the impact of the sanctions are available on the Government of Canada’s website, as is a database of the Myanmar individuals and companies subject to them. Breach of Canadian sanctions carries with it up to 5 years’ imprisonment in Canada and/or a large fine. Other Countries The EU is reportedly drawing up sanctions
Read More
February 18, 2021
As you will no doubt know, on February 1, 2021, the Myanmar military declared a state of emergency in Myanmar for a period of one year. State Counsellor Daw Aung Sang Su Kyi was detained, as were the president and various significant political and civil leaders. Min Aung Hlaing, commander-in-chief of the Tatmadaw (Myanmar armed forces) has installed himself as chairman of the State Administration Council, the current administration. New sanctions The reaction of the Biden administration has been swift. On February 10, 2021, President Biden issued Executive Order 14014, which provides bases to impose sanctions on individuals and companies deemed by the US to, among other things: operate in the defense sector of Myanmar; be responsible for policies that undermine democratic processes in Myanmar; have taken actions to undermine democratic processes or institutions, or prohibit, limit, or penalize the exercise of free speech, in Myanmar; or be a spouse or child of the foregoing. On the next day, February 11, the US Office of Foreign Assets Control (OFAC), imposed sanctions under the new executive order on ten individuals—including General Min Aung Hlaing—and three companies, including Cancri Gems & Jewelry Co, Myanmar Imperial Jade Co, and Myanmar Ruby Enterprise.  All such individuals and companies have now been designated on the US list of specially designated nationals (SDNs). Effect of sanctions As a result of such sanctions, the property of these individuals or companies that is located in the US or is under the possession or control of US companies and citizens is frozen, and US companies and citizens are generally prohibited from dealing deal with any such property.  Reportedly, roughly USD 1 billion of funds belonging to the individuals and companies blocked on February 11 are located in the US and thus now frozen. The SDN list As many
Read More
February 1, 2021
The latest edition of Practical Law’s Life Sciences Global Guide features contributions from Tilleke & Gibbins attorneys in the firm’s Yangon office. One of the sections they have provided for the Myanmar chapter of this Q&A-style guide to life sciences regulatory frameworks worldwide is “Medicinal Product Regulation and Product Liability in Myanmar.” The section includes discussion of a range of regulatory issues related to the marketing and selling of pharmaceutical products, including the following topics: Regulatory overview: Authorities, scope, and general procedures for pharmaceuticals, biologicals, and medical devices and health care IT Pricing, government funding, and reimbursement: National health care system, price regulation, and reimbursement Clinical trials Manufacturing and distribution Marketing: Authorization for marketing medicinal products, parallel imports and cross-border trade in medicines Restrictions on dealings with health care professionals Selling restrictions Advertising and promotion Data privacy Packaging, labeling, and tracking Product safety, quality, and liability Local establishment, representation, and residency requirements Reform The full “Medicinal Product Regulation and Product Liability in Myanmar” section can be accessed on the Practical Law website. Practical Law, produced by Thomson Reuters, is the world’s leading legal know-how resource for business lawyers, publishing a huge range of guides covering hundreds of jurisdictions and practice areas. Tilleke & Gibbins also supplied “Pharmaceutical IP and Competition Law in Myanmar,” which was published in the Life Sciences Global Guide  at the same time.
Read More
February 1, 2021
Attorneys from Tilleke & Gibbins in Myanmar have contributed to the latest edition of Practical Law’s online Life Sciences Global Guide. The guide is a Q&A-style overview of the regulatory frameworks for the life sciences industry across multiple jurisdictions worldwide, and this year the Myanmar chapter includes two sections, one of which is “Pharmaceutical IP and Competition Law in Myanmar.” This section runs through the country’s legal and regulatory environment for patents and trademarks—particularly as they relate to pharmaceutical business in the jurisdiction. The section then turns to IP and competition law issues, with questions and answers focusing on how the country’s competition laws and regulations affect the pharmaceutical sector. Readers are also given information on how to properly comply with Myanmar law on competition, including when it comes to licensing of medicines and pharmaceutical technology. The full Pharmaceutical Intellectual Property and Competition Law in Myanmar guide can be accessed on the Practical Law website. Practical Law, produced by Thomson Reuters, is the world’s leading legal know-how resource for business lawyers, publishing a huge range of guides covering hundreds of jurisdictions and practice areas. Tilleke & Gibbins also supplied the “Medicinal Product Regulation and Product Liability in Myanmar,” which Practical Law published in its Life Sciences Global Guide  at the same time.
Read More