MINISTRY OF HEALTH --------	SOCIAL REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------
No. 15/2019/TT-BYT	Hanoi, July 11, 2019

 

CIRCULAR

ON BIDDING FOR SUPPLY OF DRUGS FOR PUBLIC HEALTH FACILITIES

Pursuant to Law on Bidding dated November 26, 2013;

Pursuant to Law on Pharmacy dated April 06, 2016;

Pursuant to Decree No. 63/2014/ND-CP dated June 26, 2014 on guidelines for some articles on contractor selection of Law on Bidding;

Pursuant to Decree No. 54/2017/ND-CP dated May 8, 2017 on guidelines for some articles and implementation of Law on Pharmacy;

Pursuant to Decree No. 75/2017/ND-CP dated June 20, 2017 on functions, tasks, powers and organizational structure of the Ministry of Health;

At the request of Director of the Drug Administration, Director of the Planning and Finance Department;

The Minister of Health issues a Circular providing guidance on bidding for supply of drugs for public health facilities

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Circular provides guidance on bidding for supply of drugs (modern medicines, herbal medicines, traditional medicines, vaccines and biological medical products) and herbal ingredients for public health facilities, including: the division of contract packages and drug groups; prepares plans, forms, methods and organizes selection of drug suppliers; provides guidance on centralized procurement and price negotiation using state capital, health insurance fund, proceeds from medical examination and treatment services and other lawful sources of income of public health facilities.

2. The procurement of drugs by drug retailers within the premises of public health facilities shall comply with the provisions specified in Clause 76, Article 5 of Decree No. 155/2018/ND-CP dated November 12, 2018 amending a number of provisions on business investment conditions under the state management scope of the Ministry of Health. In case the health facility organizes the bidding for supply of drugs for the drug retailers within their premises, the guidance in this Circular shall be applied.

3. The procurement of medicines under orders and plans of the State shall follow the Decree No. 32/2019/ND-CP dated April 10, 2019 on task assignment, ordering or bidding for supplying products and public services using state budget sources.

4. The procurement of medicines for use in military health facilities shall comply with the guidance of the Ministry of Defense and the Ministry of Public Security.

5. The procurement of medical oxygen, nitrite oxide (NO) and in vitro diagnostic reagents shall comply with the Circular No. 58/2016/TT-BTC dated March 29, 2016 of the Minister of Finance on using state capital to procure and maintain regular operation of regulatory authorities, units of the people's armed forces, public service providers, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations.

6. The procurement of whole blood, qualified blood preparations shall comply with Circular No. 05/2017/TT-BYT of April 14, 2017 of the Minister of Health on maximum prices and cost of pricing a unit of whole blood or blood qualified preparation, and Circular No. 20/2018/TT-BYT dated August 30, 2018 of the Minister of Health amending some articles of the Ministry's Circular No. 05/2017/TT-BYT dated April 14, 2017 on maximum prices and cost of pricing a unit of whole blood or blood qualified preparation.

7. With regard to the antiretroviral drugs (ARVs) funded by health insurance fund, the formulation and appraisal and approval for the plan and organization of contractor selection as well as the signing of framework agreement with selected contractors shall comply with the provisions of this Circular.

Other contents relating to preparation of demand plans; signing contract with suppliers; management of use, advance, payment for ARVs; regulations, funding sources and methods of cost support as well as payment for ARVs to HIV-infected people with health insurance cards shall comply with Circular No. 28/2017/TT-BYT dated June 28, 2017 of the Ministry of Health on management of ARVs funded by health insurance fund and cost support as well as payment for ARVs to HIV-infected people with health insurance cards and Circular No. 08/2018/TT-BYT dated April 18, 2018 amending a number of articles of Circular No. 28/2017/TT-BYT dated June 28, 2017 on management of ARVs funded by health insurance fund and cost support as well as payment for ARVs to HIV-infected people with health insurance cards.

Article 2. Regulated entities

1. This Circular applies to organizations and individuals participating or involved in bidding for supply of drugs.

2. State-invested health facilities operated under Law on Enterprises shall follow the provisions of this Circular.

3. Private health facilities participating in provision of medical examination and treatment services covered by health insurance shall follow Article 52 of Law on Bidding and the provisions of Clause 7, Article 50 of this Circular.

Article 3. Definitions

For the purposes of this Circular; the terms below shall be construed as follows:

1. SRA (Stringent Regulatory Authorities) refers to drug administration specified in Clause 10 Article 2 of Circular No. 32/2018/TT-BYT dated November 12, 2018 on marketing authorization of drugs and medicinal ingredients.

2. Reference authority refers to drug administration specified in Clause 9 Article 2 of Circular No. 32/2018/TT-BYT dated November 12, 2018 on marketing authorization of drugs and medicinal ingredients.

3. ICH (International Conference on Harmonization) stands for the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use.

4. PIC/s (Pharmaceutical Inspection Co-operation Scheme) stands for Pharmaceutical Inspection Co-operation Scheme.

5. GMP requirements refer to good manufacturing practices for pharmaceutical products.

6. GACP requirements refer to good agricultural and collection practices for herbal ingredients.

7. A drug manufacturing line fulfilling EU-GMP requirements refers to a drug manufacturing line granted EU-GMP certificate by a competent authority of a country that is a member state of EMA (European Medicines Agency).

8. A drug manufacturing line fulfilling the requirements equivalent to EU-GMP refers to a drug manufacturing line granted GMP certificate by a competent authority of a country that is considered SRA.

9. A drug manufacturing line satisfying PIC/s-GMP requirements refers to a drug manufacturing line granted PIC/s-GMP certificate by a competent authority of a country that is a participant in PIC/s.

10. CIF price is an import price that includes the cost, insurance and freight from the exporting country to the Vietnamese port.

11. Reference biological means a biological granted certificates of marketing authorization in Vietnam on the basis of sufficient data about its quality, safety and efficacy.

12. Pharmaceutical equivalence means drugs containing the same active ingredient and concentration in the same dosage form, having the same route of administration and reaching the same quality standards.

13. Therapeutic equivalence means a drug having equivalent content and proved bioequivalence and having clinical efficacy and safety when using it on patients under specific conditions according to the instructions for use of drugs.

Article 4. Responsibility for planning and organizing selection of drug supplier (hereinafter referred to as “contractor”)

1. Heads of health facilities shall organize and develop the contractor selection plan specified in Article 14 of this Circular and the following provisions:

a) For drugs on the national list of drugs for centralized bidding procurement, list of drugs for procurement by price negotiation: National centralized drug procurement center shall develop the contractor selection plan.

The plan shall be based on the demand for drugs of health facilities according to the notification of the national centralized drug procurement center. The implementation time is up to 36 months, categorized by drug category and supply interval (quarterly, annually);

a) For drugs on the local lists of drugs for centralized bidding procurement: the local centralized drug procurement units shall develop the contractor selection plan. The plan is based on the demand for drugs of health facilities according to the notification of the local centralized drug procurement units. The implementation time is up to 36 months, categorized by drug category and supply interval (quarterly, annually);

c) For contractor selection carried out by health facilities, the health facilities shall develop their own contractor selection plans. The plan is made periodically or on request. The implementation time is up to 12 months or on request, categorized by drug category.

2. Heads of health facilities shall organize the contractor selection plan and ensure the following regulations:

a) For drugs on the national list of drugs for centralized bidding procurement, list of drugs for procurement by price negotiation: national centralized drug procurement center shall organize the contractor selection plan specified in Chapter IV and Chapter V of this Circular;

a) For drugs on the Local lists of drugs for centralized bidding procurement: the local centralized drug procurement units shall organize the contractor selection plan specified in Chapter IV of this Circular;

a) For drugs that are not on the national list of drugs for centralized bidding procurement, local lists of drugs for centralized bidding procurement, List of drugs for procurement by price negotiation: The health facility shall organize the contractor selection plan specified in Chapter III of this Circular;

Article 5. Reporting bidding results

1. Within 10 days from the day on which the contractor selection result is approved, Heads of health facilities shall report the contractor selection result as below:

a) Hospitals and institutions providing inpatient treatment affiliated to the Ministry of Health shall send their contractor selection results to the Ministry of Health.

b) Local centralized drug procurement units, health facilities offering bidding for supply of drugs under management of People's Committees of provinces and central-affiliated cities (hereinafter refer to as “provinces”) shall send contractor selection results to Provincial Departments of Health of provinces.

c) Health facilities of other sectors and other health facilities shall send contractor selection results to competent authorities for approval.

2. Within up to 10 days from the day on which the contractor selection results are received from the units specified in Point b Clause 1 of this Article, Provincial Departments of Health of provinces shall send a consolidated report to the Ministry of Health.

3. Forms of report submission:

a) Report forms shall comply with Appendix 1 and Appendix 2 enclosed herewith;

b) Reports shall be sent by post and email to the Ministry of Health as follows:

- 01 copy shall be sent to Department of Finance – Planning (Ministry of Health) at: dauthau.khtc@moh.gov.vn for all procurements.

- 01 copy shall be sent to Drug Administration (Ministry of Health) at: qlgiathuoc.qld@moh.gov.vn for procurements of generic drugs, proprietary drugs or equivalent drugs.

- 01 copy shall be sent to Traditional Medicine Administration (Ministry of Health) at: quanlyduoclieu@moh.gov.vn for procurements of traditional drugs, herbal drugs, herbal ingredients and traditional ingredients.

4. Before the 31^st of October every year, health authorities, hospitals and institutions providing inpatient treatment affiliated to the Ministry of Health and; Provincial Departments of Health of provinces and central-affiliated cities shall prepare and send reports on violations committed by contractors during bidding for supply of drugs by local health facilities in the previous period as specified in Appendix 3 enclosed herewith to the Ministry of Health (Department of Planning - Finance for all contract packages; Drug Administration for contract packages of generic drugs, proprietary drugs or equivalent drugs; Traditional Medicine Administration for contract packages of herbal drugs, traditional drugs, herbal ingredients and traditional ingredients). The reports shall be the basis for contractor evaluation in the next period.

Article 6. Expenses and document retention during contractor selection

1. Expenses incurred during the process of contractor selection shall comply with Article 9 of Decree No. 63/2014/ND-CP dated June 26, 2014 on detailed guidelines for some articles on contractor selection of Law on Bidding (hereinafter referred to as Decree No. 63/2014/ND-CP).

2. Retention of documents during the process of contractor selection shall comply with Article 10 of Decree No. 63/2014/ND-CP .

Chapter II

DIVISION OF CONTRACT PACKAGES AND DRUGS

Article 7. Generic drug contract package

A generic drug contract package may contain one or several generic drugs; each list of generic drugs must be sorted by category; each generic drug in each category is one part of the contract package. A contract package of generic drugs is divided into 5 categories and based on technical criteria as follows:

1. Category 1 includes drugs satisfying one of the three following criteria:

a) Drugs manufactured entirely by a manufacturing line satisfying EU-GMP requirements or equivalent requirements in a country that is considered SRA;

b) Drugs on the list of proprietary drugs or reference biological announced by Ministry of Health, except for proprietary drugs on the list of drugs eligible for price negotiation issued by Ministry of Health and with announced price negotiation results;

c) Drugs manufactured entirely in Vietnam and satisfy all following requirements:

- Drugs manufactured by a manufacturing line satisfying EU-GMP requirements or equivalent requirements and certified by drug authority of Vietnam to satisfy EU-GMP requirements or equivalent requirements;

- Drugs granted certificates of free sale by the national drug authority of a country that is considered SRA as specified in Clause 8 Article 50 of this Circular;

- Drugs sold in Vietnam and drugs granted certificates of free sale by a country that is considered SRA shall have the same dosage form, production process, quality criterion, verification method; active ingredients, excipients shall have the same quality criterion, production facility and production place as specified in Clause 8 Article 50 of this Circular.

2. Category 2 includes drugs satisfying one of the two following criteria:

a) Drugs manufactured entirely by a manufacturing line satisfying EU-GMP requirements or equivalent requirements and granted certificates by the drug authority of Vietnam.

b) Drugs manufactured entirely by a manufacturing line in a country that is a member state of PIC/s and ICH, satisfying PIC/s-GMP requirements and granted certificates by the national drug authority of such country and the drug authority of Vietnam.

3. Category 3 includes drugs manufactured by a manufacturing line satisfying GMP requirements and granted certificates by the drug authority of Vietnam and having evidence of bioequivalence announced by the drug authority of Vietnam.

4. Category 4 includes drugs manufactured entirely by a manufacturing line in Vietnam satisfying WHO-GMP requirements and granted certificates by the drug authority of Vietnam.

5. Category 5 includes drugs manufactured by a manufacturing line satisfying WHO-GMP requirements and granted certificates by the drug authority of Vietnam and not included in provisions specified in Clauses 1, 2, 3 and 4 of this Article.

Article 8. Contract package of proprietary drugs or equivalent drugs

1. Heads of health facilities shall make decision on procurement of proprietary drugs or equivalent drugs or reference biological on the basis of suggestions of Drug and Treatment Council.

2. A contract package of proprietary drugs or equivalent drugs may contain one or several proprietary drugs or equivalent drugs or reference biological, each drug is one part of the contract package. Drugs bidding for a contract package of proprietary drugs or equivalent drugs shall include drugs satisfying the two following criteria:

a) Drugs on the list of proprietary drugs or equivalent drugs and reference biological announced by Ministry of Health, except for proprietary drugs on the list of drugs eligible for price negotiation issued by Ministry of Health and with announced price negotiation results;

b) Drugs manufactured entirely in countries considered SRA, unless the health facility requests for evidence of proprietary drugs or reference biological marketing for the first time in countries not considered SRA or having at least one manufacturing stage in Vietnam

Article 9. Contract package of herbal drugs and traditional drugs (excluding traditional ingredients)

A contract package of herbal drugs and traditional drugs may contain one or several herbal and traditional drugs; each list of drugs must be sorted by category; each drug in each category is one part of the contract package. The contract package of herbal drugs and traditional drugs is divided into 3 categories and based on technical criteria as follows:

1. Category 1 includes drugs satisfying the two following criteria:

a) Drugs manufactured entirely from herbal ingredients planted and collected or naturally farmed satisfying GACP requirements and granted certificates by Ministry of Health of Vietnam;

b) Drugs manufactured entirely by a manufacturing line in Vietnam satisfying GMP requirements of herbal drugs and traditional drugs and granted certificates by Ministry of Health of Vietnam.

2. Category 2 includes herbal drugs and traditional drugs manufactured entirely by a manufacturing line in Vietnam satisfying GMP requirements of herbal drugs and traditional drugs and granted certificates by Ministry of Health of Vietnam.

3. Category 3 includes herbal drugs and traditional drugs not satisfying criteria specified in Clauses 1 and 2 of this Article.

Article 10. Contract package of traditional ingredients

A contract package of traditional ingredients may contain one or several traditional ingredients; each list of ingredient must be sorted by category; each ingredient in each category is one part of the contract package. The contract package of traditional ingredients is divided into 3 categories and based on technical criteria as follows:

1. Category 1 includes traditional ingredients satisfying the following two criteria:

a) Drugs manufactured from herbal ingredients planted and collected or naturally farmed satisfying GACP requirements and granted certificates by Ministry of Health of Vietnam;

b) Drugs manufactured entirely by a manufacturing line in Vietnam satisfying GMP requirements of traditional ingredients (including glue, granule, extract, essential oil, resin, gum, jelly) and granted certificates by Ministry of Health of Vietnam.

2. Category 2 includes traditional ingredients manufactured entirely by a manufacturing line in Vietnam satisfying GMP requirements of traditional ingredients (including glue, granule, extract, essential oil, resin, gum, jelly) and granted certificates by Ministry of Health of Vietnam.

3. Category 3 includes traditional ingredients not satisfying criteria specified in Clauses 1 and 2 of this Article.

Article 11. Contract package of herbal ingredients

A contract package of herbal ingredients may contain one or several herbal ingredients, each list of herbal ingredients shall be sorted by category; each ingredient in each category is one part of the contract package. The contract package of herbal ingredients is divided into 3 categories and based on technical criteria as follows:

1. Category 1 includes herbal ingredients planted and collected or naturally farmed satisfying GACP requirements and granted certificates by Ministry of Health of Vietnam.

2. Category 2 includes semi-finished herbal ingredients: glue, granule, extract, essential oil, resin, gum, jelly manufactured by a manufacturing line in Vietnam satisfying GMP requirements of herbal ingredients and granted certificates by Ministry of Health of Vietnam.

3. Category 3 includes herbal ingredients not satisfying criteria specified in Clauses 1 and 2 of this Article.

Article 12. Provisions on submission of bids of drug categories

1. Bidding principles of drug categories in a contract package.

a) Contractors shall be sorted according to technical criteria that their drugs satisfy. If a drug satisfies criteria of more than one category, its supplier may be divided into one or some categories corresponding to the technical criteria their drug satisfies, and provided the bid price for the same drugs in all categories participated by the contractor are consistent.

b) If an offered drug manufactured by several facilities, these facilities participated in production process shall satisfy technical criteria of the offered drug category.

2. Contract package of generic:

a) Drugs satisfying criteria of Category 1 may be sorted into Category 1, Category 2, Category 5;

b) Drugs satisfying criteria of Category 2 may be sorted into Category 2, Category 5;

c) Drugs satisfying criteria of Category 3 may be sorted into Category 3, Category 5;

d) Drugs satisfying criteria of Category 4 may be sorted into Category 4, Category 5;

dd) Drugs not satisfying criteria of Category 1, Category 2, Category 3 and Category 4 shall only be sorted into Category 5.

3. Contract package of herbal drugs and traditional drugs:

a) Drugs satisfying criteria of Category 1 may be sorted into Category 1, Category 2 and Category 3;

b) Drugs satisfying criteria of Category 2 may be sorted into Category 2 and Category 3;

c) Drugs not satisfying criteria of Category 1, Category 2 shall only be sorted into Category 3.

4. Contract package of traditional ingredients:

a) Traditional ingredients satisfying criteria of Category 1 may be sorted into Category 1, Category 2, Category 3;

b) Traditional ingredients satisfying criteria of Category 2 may be sorted into Category 2, Category 3;

c) Traditional ingredients not satisfying criteria of Category 1, Category 2 shall only be sorted into Category 3.

5. Contract package of herbal ingredients:

a) Herbal ingredients satisfying criteria of Category 1 may be sorted into Category 1 and Category 3;

b) Herbal ingredients satisfying criteria of Category 2 shall only be sorted into Category 2;

c) Herbal ingredients not satisfying criteria of Category 1, Category 2 shall only be sorted into Category 3.

6. Foreign drugs manufactured under a processing contract or technology transfer contract in Vietnam sorted into contract packages of generic drugs and proprietary drugs or equivalent drugs shall be implemented as follows:

a) Foreign drugs manufactured under a processing contract or technology transfer contract in Vietnam may be sorted into the drug categories specified in Point b of this Clause if satisfying the following criteria:

- There's a technology transfer contract with specific comprehensive technology transfer roadmap for the processor or technology transferee to prepare to manufacture finished drugs in Vietnam within 5 years from the date of certificate of marketing authorization is granted.

- Drugs manufactured under a processing contract or technology transfer contract and drugs manufactured without under a processing contract or technology transfer contract shall have the same dosage form, production process, quality criteria of ingredients and finished drugs;

- Drugs not on the List of domestically-manufactured drugs satisfying treatment, pricing and supply requirements issued by the Ministry of Health according to technique criteria (except for all manufacturing stages in Vietnam when the certificate of marketing authorization is granted in Vietnam).

b) The submission of bids for foreign drugs manufactured under a processing contract or technology transfer contract in Vietnam satisfying the provisions specified in Point a of this Clause if:

- Foreign drugs manufactured under a processing contract or technology transfer contract in Vietnam on the List of proprietary drugs or the List of reference bioequivalence and satisfying the provisions specified in Point b Clause 2 Article 8 of this Circular may be sorted into the contract package of proprietary drugs or equivalent drugs. Drugs on the List of drugs for procurement through price negotiation issued by Ministry of Health, procurement of these drugs shall be under price negotiation form;

- Foreign drugs specified in Point a Clause 1 Article 7 of this Circular manufactured under a processing contract or technology transfer contract in Vietnam by a manufacturing line satisfying EU-GMP requirements or equivalent requirements and granted certificates by the drug authority of Vietnam may be sorted into Category 1, Category 2, Category 4 and Category 5;

- Foreign drugs specified in Clause 2 Article7 of this Circular manufactured under a processing contract or technology transfer contract in Vietnam by a manufacturing line satisfying EU-GMP requirements or equivalent requirements and granted certificates by the drug authority of Vietnam may be sorted into Category 2, Category 4 and Category 5;

- Other drugs manufactured under a processing contract or technology transfer contract in Vietnam may be sorted into Category 4 and Category 5.

c) If foreign drugs manufactured under a processing contract or technology transfer contract do not satisfy criteria specified in Point 1 of this Clause, the submission of bids shall follow the provisions specified in Clauses 1 and 2 of this Article.

Chapter III

DRUG PROCUREMENT FOR PUBLIC HEALTH FACILITIES

Section 1. MAKING CONTRACTOR SELECTION PLAN

Article 13. Basis for making contractor selection plan

1. The contractor selection plan is made annually or whenever necessary on the following bases:

a) State budget:

Funding of drug procurement from state budget shall be annually provided by a competent authority. If funding has not been provided, the plan shall be made according to the procurement and use of drugs funded by state budget in the preceding year and the anticipated demand for drugs in the current year;

b) Proceeds from provision of medical examination and treatment services and payments from social insurance agencies:

- Contract for medical examination and treatment covered by health insurance between the health facility and the social insurance agency;

- Procurement and use of drugs covered by proceeds from medical examination and treatment services in the preceding year and anticipated demand for drugs in the planning year of the health facility.

c) For drugs covered by other sources of income of the health facility: the plan shall be made according to the procurement and use of drugs covered by other sources of income in the preceding year and anticipated demand for drugs in the planning year of the health facility.

2. If the health facility has selected a contractor and signed a contract but the demand for a drug exceeds the contractual quantity by 20%, such health facility shall make a plan for selection of additional contractor to satisfy its demand.

Article 14. Contents of contractor selection plan

1. Name of contract package:

Categorization of contract packages and drug categories shall follow the provisions from Article 7 to Article 12 of this Circular.

 If a contract package is categorized into several parts, each of them shall have a suitable name. Specific information in contractor selection plan are as follows:

a) Each part in a contract package of generic drugs shall include: name of the active ingredient; content/concentration; route of administration, dosage form; category; measuring unit, quantity; unit price and total value;

b) Each part in a contract package of original branded name drugs or equivalent drugs shall include: name of the drug and the phrase “or equivalent drugs”; content/concentration; route of administration, dosage form; category; measuring unit, quantity; unit price and total value. If an active ingredient has several names of proprietary drug or equivalent drug or reference bioequivalence on the List of proprietary drug or equivalent drug or reference bioequivalence published by Ministry of Health, name of the drug shall include names of proprietary drug or equivalent drug or reference bioequivalence;

c) Each part in a contract package of herbal drugs or traditional drugs shall include: name of the drug; route of administration, dosage form; measuring unit; category; quantity; unit price and total value; Names of drugs shall be written complying with the provisions in Article 3 of this Decree.

d) Each part in a contract package of herbal ingredients or traditional ingredients shall include: name of the ingredient; scientific name; quality standards; raw form or processing method; category; measuring unit, quantity; unit price and total value.

2. Dosage form of a contract package of generic drugs/herbal drugs/traditional drugs under contractor selection plan shall be written complying with the provisions in Appendix 4 enclosed herewith. The dosage forms (with asterisks) shall be written separately under the condition that:

a) Having the same dosage form as proprietary drugs or reference bioequivalence with the same active ingredients, route of administration, or drugs with the same active ingredients, route of administration granted certificates of free sale in SRA countries.

b) If the drug is not specified in Point a Clause 2 of this Article, the health facility shall state clearly the demand for using this dosage form in terms of necessity, estimated quantity and it’s only used in case use of another dosage form is impossible;

3. Names in a contract package of herbal drugs or traditional drugs shall be written as follows:

a) Only specify the drug ingredients; do not write trade names;

b) For drugs having the same ingredients or dosage form: only specify the concentrations of the ingredients if the difference in concentrations leads to difference in dose and indications of treatment according to opinions of Drug and Treatment Council.

4. Value of contract package:

a) Value of a contract package means total value of the contract package, including all expenses;

b) If a contract package is divided into smaller parts, each part shall specify unit price and total value of that part as prescribed in Clause 1 of this Article, except for total value of the contract package. The unit price in the contractor selection plan shall be proposed by the planning health facility, which is responsible for such proposed price;

c) When making the contractor selection plan, the procuring entity shall check successful bids within the previous 12 months of health facilities published by the Ministry of Health (Drug Administration of Vietnam, Traditional Medicine Administration of Vietnam) on their website, specifically:

- The estimated price of each drug/ingredient shall not exceed the highest successful bid for that drug/ingredient in each published technical category;

- For drugs/ingredients whose successful bids are unpublished or estimated prices are higher than successful bids published by the Ministry of Health (Drug Administration of Vietnam, Traditional Medicine Administration of Vietnam) within the previous 12 months, the health facility shall check quotations or invoices of at least 03 suppliers during the contractor selection plan and ensure that the price estimated by the health facility shall not exceed the effective wholesale price of such drugs (except for herbal ingredients and traditional ingredients).

For drugs having fewer than 03 suppliers (fewer than 03 quotations or invoices), the head of the health facility shall propose the price according to such quotations and invoices, provide explanation, and take responsibility for the appropriateness of the estimated price when the contractor selection plan is made.

d) Estimated price of items with the same active ingredients, concentrations/contents, dosage form in the contract package of generic drugs shall comply with the following principles:

- The estimated price of Category 1 shall not be higher than that of proprietary drugs or reference bioequivalence;

- The estimated price of Category 2 and Category 3 shall not be higher than that of proprietary drugs or reference bioequivalence and Category 1;

- The estimated price of Category 4 shall not be higher than the that of proprietary drugs or reference bioequivalence; Category 1 and Category 2 manufactured in Vietnam and Category 3;

- The estimated price of Category 5 shall not be higher than that of proprietary drugs or reference bioequivalence; Category 1; Category 2; Category 3 and Category 4.

5. Funding sources: the health facility must specify the sources of funding for drug procurement; if the funding source is ODA or concessional loan, the name of sponsor and fund composition must be specified, including the aid and counterpart fund (if any).

6. Contractor selection methods and procedures:

a) Contractor selection methods:

Depending on the value and nature of each contract package, the health facility shall select one of the methods specified in Article 20 through 25 of the Law on Bidding and detailed guidance in this Circular.

b) Contractor selection procedures:

Depending on the contractor selection method and value of the contract package, the health facility shall propose contractor selection procedures as prescribed in Article 28 and Article 29 of the Law on Bidding and Decree No. 63/2014/ND-CP , and guidance in this Circular. For a small contract package requiring quality and good prices, the single-stage two-envelop bidding procedures shall be applied.

7. Starting time of contractor selection:

The month or quarter in which bidding documents or request for proposals are issued shall be specified.

8. Type of contract shall depend on the value and nature of the contract package and supply method as prescribed in Article 62 of the Law on Bidding.

9. Time limit for contract execution shall be specified in the contractor selection plan which must not exceed 12 months from the effective date of the contract.

Article 15. Submission of contractor selection plan for approval

1. a) The head of the health facility shall submit the contractor selection plan to a competent person at least 03 months before the expiry of the previous drug supply contract.

2. A proposal of contractor selection plan shall contain:

a) Basis for making the contractor selection plan as specified in Article 13 of this Circular;

b) Contents of the contractor selection plan as specified in Article 14 of this Circular to be specific:

- Names of contract packages, value of each part and total value of contract packages in the contractor selection plan and the basis for dividing the contract packages. If the contract package of drug is funded by state budget, the total value of contract packages in the contractor selection plan must not exceed the approved cost estimate;

- The contractor selection method and procedures applied to each contract package shall be one of those specified in Articles 19, 20, 21, 22, 23, 24, 25, 26 of this Circular. If competitive bidding is not applied, the proposal shall explain the reason for choosing other methods.

- Explanation for increase in using drugs manufactured in Vietnam in accordance with guidance of Ministry of Health.

3. Documents enclosed with the proposal:

a) Summary of the result of contractor selection and drug use of the preceding year and explanation for the proposed contractor selection plan;

b) Documents as the basis for making the contractor selection plan as specified in Article 13 of this Circular;

Minutes of the meeting with the Drug and Treatment Council and its comments on the list, quantity of drugs, the need for proprietary drugs or equivalent drugs or reference bioequivalence, the need for dosage form separately written in the contractor selection plan specified in Clause 2 Article 14 of this Circular, specification of names and concentrations in the content package of traditional drugs or herbal drugs.

d) Investors shall make decision on approval for funding source, list, quantity and estimated price in the contractor selection plan.

4. The proposal of the contractor selection plan shall be sent by post or directly or electronically to the unit appointed to appraise contractor selection plans. The proposal of contractor selection plan shall comply with Form No. 5 in Appendix enclosed herewith.

Article 16. Appraisal of contractor selection plan

The contractor selection plan shall be appraised before it is submitted to the competent person for approval as specified in Clause 1 Article 17 of this Circular.

1. Organization of appraisal:

a) For public health facilities under the management of Ministries, ministerial authorities, Governmental authorities: Ministers, Heads of ministerial authorities and Governmental authorities shall decide the unit in charge of appraising their contractor selection plans (hereinafter referred to as appraising unit);

b) For public health facilities under the management of local governments:

- If Chairperson of People's Committee of province is the competent person to approve the contractor selection plan of the contract package, Department of Health shall organize appraisal of the contractor selection plan.

- The person authorized by the Chairperson of People's Committee of province (if any) to approve the contractor selection plan shall appoint a qualified unit to appraise the plan before approving it.

c) The legally responsible person or the person authorized by the legally responsible person of health facilities not specified in Point a and Point b Clause 1 of this Article shall appoint a unit in charge of organizing the appraisal of contractor selection plan.

2. Duties of appraising unit:

a) Appraise the contents specified in Articles 7, 8, 9, 10, 11, 12, 13, 14, 15 of this Circular within 20 days from the day on which adequate documents are received. If documents are inadequate, the appraising unit shall request addition of documents or return the documents to the health facility within 05 working days from the receipt of such documents;

b) Make an appraisal report according to Form No. 6 enclosed herewith. The report shall be enclosed with one set of the application for approval for appraised contractor selection plan (original) and submitted to the competent person specified in Clause 1 Article 17 of this Circular for approval.

Article 17. Approval for contractor selection plan

1. The power to approve contractor selection plans:

a) Ministers, Heads of ministerial authorities and Governmental authorities shall consider approving contractor selection plans for health facilities under their management; Ministers, Heads of ministerial authorities and Governmental authorities shall appoint a unit to approve contractor selection plans for heads of health facilities under their management In this case, the authorized person shall appoint a qualified unit to appraise the plan before approving it.

b) Chairpersons of People's Committee of province shall consider approving contractor selection plans of health facilities under their management. Chairpersons of People's Committee of province may appoint a unit to approve contractor selection plans for heads of health facilities within their management. In this case, the authorized person shall appoint a qualified unit to appraise the plan before approving it.

c) The legally responsible person or the person authorized by the legally responsible person of health facilities shall consider approving the contractor selection plan for the health facilities not specified in Points a and b Clause 1 of this Article.

d) Task assignment of approval for contractor selection plans of military health facilities shall comply with the guidance of the Ministry of Defense and the Ministry of Public Security.

2. Within 05 working days from the receipt of the appraisal report and the proposal, the competent person specified in Clause 1 of this Article shall consider approving the plan.

3. The contractor selection plan shall be posted on national bidding network as prescribed in Article 8 of the Law on Bidding and its instructional documents.

Article 18. Regulations on contractor selection self-organization for drugs on the list of drugs for centralized bidding procurement and the list of drugs for procurement by price negotiation

1. Health facilities may carry out contractor selection themselves for drugs on the list of drugs for centralized bidding procurement and the list of drugs for procurement by price negotiation, ensure that time limit and quantity must not exceed demand for use within 12 months (from the receipt of written notification from centralized drug procurement units) if:

a) The health facility needs to use a drug on the List of drugs for centralized bidding procurement or the list of drugs for procurement by price negotiation but the results of centralized contractor selection or price negotiation have not been published;

b) The health facility needs to use a drug on the list of drugs for centralized bidding procurement or the list of drugs for procurement through price negotiation with a concluded supply contract but the selected contractor is unable to supply drugs and the receipt of notification from the centralized drug procurement unit of contractor selection self-organization.

c) The health facility has used up the quantity of drugs specified in the framework agreement and exceeds the capacity specified in Clause 5 Article 37, Clause 13 Article 40 and Clause 12 Article 41 of this Circular;

d) The health facility is established after the demand for drugs has been determined, and the increased demand exceeds the capability of the national centralized drug procurement center and the local centralized drug procurement unit.

2. A health facility shall not carry out contractor selection for supply of drugs on the national list of drugs for centralized bidding procurement or local lists of drugs for centralized bidding procurement or list of price negotiation if the contractor selection result is available on the date of issuance of the bidding documents and a framework agreement has been published, except for the cases specified in Points b, c and d Clause 1 of this Article. If such health facility still carries out contractor selection and signs a contract with another contractor, the contract shall not be paid for.

Section 2. CONTRACTOR SELECTION METHODS

Article 19. Competitive bidding

Competitive bidding shall be applied to every contract package regulated by this Circular, except for the cases in Article 20 through 24 hereof.

Article 20. Selective bidding

1. Selective bidding shall be applied to any procurement under special control of the Ministry of Health or any procurement of special drugs that can be supplied by few suppliers.

2. Drug manufacturers and drug suppliers included by the Ministry of Health on the list of capable, experienced, reputable manufacturers specified in Point dd Clause 1 Article 77 of Decree No. 63/2014/ND-CP shall be invited to participate in selective bidding if their drugs are suitable for the procurements.

Article 21. Direct contracting

1. Usual direct contracting and simplified direct contracting:

a) Usual direct contracting applies to contract packages worth VND1 billion at most specified in Point e, Clause 1, Article 22 of Law on Bidding;

a) Simplified direct contracting applies to contract packages specified in Point a Clause 1 Article 22 of Law on Bidding and Article 79 of the Decree 63/2014/ND-CP .

2. Procedures of usual direct contracting and simplified direct contracting:

a) The usual direct contracting procedures are specified in Article 55 of Decree No. 63/2014/ND-CP .

b) The simplified direct contracting procedures are specified in Article 56 of Decree No. 63/2014/ND-CP after the contractor selection plan is approved.

In case of direct contracting specified in Point a Clause 1 Article 22 of Law on Bidding (except for contract packages that are state secrets), the provisions specified in Clause 8 Article 6 of Circular No. 10/2015/TT-BKHDT dated October 26, 2015 of Minister of Planning and Investment on contractor selection plans.

Article 22. Competitive offering

1. Competitive offering shall be applied when all of the conditions below are satisfied:

a) The contract package value does not exceed VND5 billion;

b) The drug on the list of essential medicines promulgated by the Ministry of Health or a commonly available drug whose technical characteristics and quality have been standardized and equivalent;

c) There is a contractor selection plan approved by the competent person;

d) If the contract package is funded by state budget, it is required to have an approved cost estimate. If the contract package is funded by another funding source, it must be sufficient to pay for the contract package on schedule.

2. The competitive offering procedures are specified in Article 58 and Article 59 of Decree No. 63/2014/ND-CP .

Article 23. Direct procurement

1. Direct procurement shall be applied when all of the conditions below are satisfied:

a) The contractor has won the contract through competitive bidding or selective bidding and has signed a contract earlier;

b) The current procurement includes similar drugs and the value is smaller than 130% of the earlier contract. If the drug of the direct procurement is one of the drugs of a similar contract signed earlier, the value of the direct procurement must be smaller than 130% of that of the same kind of drug of the earlier contract;

c) Unit prices of drugs of the direct procurement do not exceed those of corresponding drugs in the earlier contract and suitable for the successful bids announced at the time of approval for contractor selection plan;

d) The period of time from the signing date of the earlier contract to the date on which the direct procurement result is approved must not exceed 12 months. In a 12-month period, a health facility may make only one procurement of each product in the earlier contract. In special cases, the health facility shall submit a document to the competent person specified in Clause 1 Article 17 of this Circular for consideration.

2. If the previous contractor is no longer capable of executing the direct procurement contract, another contractor who satisfies the requirements (in terms of capacity, experience, technology and prices) in the bidding documents and the previous contractor selection result may be selected.

3. The direct procurement procedures are specified in Article 60 of Decree No. 63/2014/ND-CP .

Article 24. Self-supply

1. Self-supply shall be applied to the procurements specified in Article 25 of Law on Bidding after all provisions specified in Article 61 of Decree No. 63/2014/ND-CP are satisfied.

2. The self-supply procedures are specified in Article 62 of Decree No. 63/2014/ND-CP .

Section 3. CONTRACTOR SELECTION PROCEDURES

Article 25. Single-stage one-envelop procedures

Single-stage one-envelop procedures shall be applied to:

1. Small-value contract packages through competitive bidding or selective bidding specified in Article 63 Decree No. 63/2014/ND-CP ;

2. Contract packages through competitive offering;

3. Contract packages through direct procurement;

4. Contract packages through usual direct contracting.

Article 26. Single-stage two-envelop procedures

Single-stage two-envelop procedures shall be applied to:

1. Contract packages worth more than VND10 billion through competitive bidding or selective bidding.

2. Contract packages worth less than VND10 billion through competitive bidding or selective bidding but both quality and prices have to be taken into account.

Section 4. BIDDING DOCUMENTS AND REQUEST FOR PROPOSALS

Section 27. Preparing bidding documents amd request for proposals

1. Bidding documents or request for drug procurement shall be prepared in accordance with Law on Bidding and the following instructional documents and provisions:

a) The bidding documents and request for drug procurements of proprietary drugs or equivalent drugs, generic drugs, herbal drugs and traditional drugs shall comply with the bidding documents applying one-stage one-envelop procedures specified in Appendix 7 or bidding documents applying one-stage two-envelop procedures specified in Appendix 8 enclosed herewith.

b) The bidding documents and request for contract packages of traditional ingredients and herbal ingredients shall comply with the guidance of Ministry of Health on detailed bidding documents for procurement of herbal and traditional ingredients for health facilities.

2. According to the contractor selection plan approved by a competent authority, the procuring entity shall prepare the bidding documents or request for drug procurement and submit an application for approval to the appraising unit.

3. The bidding documents or request for drug procurement must specify that contractors shall not offer imported drugs in the same categories as drugs on the list of domestically manufactured drugs satisfying treatment, pricing and supply requirements published by the Ministry of Health (hereinafter referred to as Circular No. 03/2019/TT-BYT), to be specific:

a) Drugs on the list enclosed with Circular No. 03/2019/TT-BYT satisfying WHO-GMP technical criteria may not offer imported drugs satisfying technical criteria of category 5 specified in Clause 5 Article 7 of this Circular.

b) Drugs on the list enclosed with Circular No. 03/2019/TT-BYT satisfying EU-GMP technical criteria may not offer imported drugs satisfying technical criteria of category 2 specified in Clause 2 Article 7 of this Circular.

4. The bidding documents or request for herbs procurement must specify that contractors shall not offer imported herbs in the same categories as herbs on the list of domestically planted and collected herbs satisfying treatment, pricing and supply requirements published by the Ministry of Health.

5. Due to unexpected increase in demand, drugs on the list of domestically manufactured drugs satisfying treatment, pricing and supply capacity or herbs on the list of domestically planted and collected drugs satisfying treatment, pricing and supply capacity exceed supply capacity of domestic manufacturing facilities or health facilities, Ministry of Health shall decide the imported drug/herbs offering in the same technical criteria categories as drugs/herbs on the list of domestically manufactured drugs/domestically planted and collected herbs satisfying treatment, pricing and supply requirements in a certain time to ensure sufficient supply of drugs/herbs.

Section 28. Appraising bidding documents and request for proposals

1. Bidding documents and request for proposals shall be appraised before it is submitted to heads of health facilities for approval.

2. Appraising units shall be decided by heads of health facilities.

3. Duties of appraising unit:

Inspect the contents of bidding documents or request for proposals in accordance with Law on Bidding as well as its instructional documents and provisions of this Circular;

b) Make an appraisal report and send it together with one set of the bidding documents or request for proposals to the head of the health facility for approval within 20 days from the day on which sufficient documents are received.

Article 29. Approving bidding documents, request for proposals

Heads of health facilities shall consider approving bidding documents or request for proposals within 10 days from the day on which the appraisal report and sufficient documents are received from appraising units.

Section 5. CONTRACTOR SELECTION ORGANIZATION

Article 30. Bid security, submission of bids/proposals

1. The head of the health facility (or the procuring entity) shall specify the value of bid security in the bidding documents/request for proposals in accordance with the following principles:

a) The bid security value shall equal 1% - 3% of the contract package value (1% - 1.5% for small contract packages).

b) If the contract package is divided into smaller parts, the bid security value for each part shall equal 1% - 3% of the value of such part (1% - 1.5% for small contract packages).

2. A contractor may participate in one, some, or all parts of a procurement. If the contractor participates in more than one part, the bid security value shall be the total value of bid security for each part.

3. A contractor may choose one of the following bid security methods:

a) Pay a deposit;

b) Pay security;

c) A letter of guarantee issued by a bank or credit institution lawfully operating in Vietnam.

Investors shall not request contractors to follow any specific method of the three above methods.

4. The procuring entity shall specify the validity period of request for proposals or bids which shall not exceed 180 days from the bid closing time.

 Where necessary, the validity period of bids/proposals may be extended as long as the drug supply schedule is met. Each contractor shall submit 02 sets of the bid/proposal (01 original and 01 copy) to the procuring entity before the bid closing time.

Article 31. Evaluating bids/request for proposals

1. Depending on the nature and value of the contract package, the method and procedure for contractor selection, the head of the health facility shall select one of the method for evaluating bids/proposals specified in Article 39 and Article 41 of Law on Bidding. The evaluation method must be specified in bids/request for proposals.

2. The procuring entity shall evaluate bids/proposals for each part of the procurement in accordance with the Law on Bidding and regulations of the Ministry of Health on preparing bids/proposals for supply of drugs.

The evaluation of ability and experience of contractors shall be based on the total parts of the contract package that the contractors participated.

3. The standards for evaluating bids/proposals shall comply with provisions in the bidding documents specified in Appendix 7 or Appendix 8 enclosed herewith and shall be specified in the bidding documents/request for proposals. Procuring units shall follow regulations on incentives in Article 3 through 6 of Decree No. 63/2014/ND-CP .

4. Procedures for evaluating bids/proposals shall depend on the contractor selection procedures approved by a competent authority, to be specific:

Single-stage one-envelop procedure: Article 15 through 18 of Decree No. 63/2014/ND-CP shall be applied ;

Single-stage two-envelop procedure: Article 27 through 30 of Decree No. 63/2014/ND-CP shall be applied ;

5. Time limit for evaluating proposals is up to 30 days; time limit for evaluating bids is 45 days (25 days for small procurements) from the bid closing to the day on which the procuring entity submits the contractor selection result to the head of the health facility for approval. In case of competitive bidding and selective bidding under single-stage two-envelop procedures, the time limit for evaluating bids shall be the total time for evaluating technical proposals (from the bid closing date to the day on which the head of the health facility approves the list of bidders satisfying technical requirements) plus (+) the time for evaluating financial proposals (from the day on which financial proposals are opened to the day on which the procuring entity submits the contractor selection result to the head of the health facility for approval). Where necessary, the time limit for evaluating bids/proposals may be extended for up to 20 more days as long as the drug supply schedule is met.

Article 32. Contract negotiation and proposal for successful contractor

1. Contract negotiation shall comply with the provisions specified in Article 19 of Decree No. 63/2014/ND-CP and shall be implemented before the procuring entity proposes successful contractor.

The contractor whose bid after correction of errors and adjustment of deviation minus (-) discount is lowest (if lowest price method is applied); whose evaluated price is lowest (if evaluated price method is applied); or whose total score is highest (if combined method is applied) shall be ranked first and invited to contract negotiation.

If the selected contractor is invited to contract negotiation but he/she is absent, such contractor shall not receive bid security.

2. Conditions for being proposed for successful contractors are specified in Article 43 of Law on Bidding and the bidding documents specified in Appendix 7 or Appendix 8 enclosed herewith.

The procuring entity shall propose the successful contractor for each part of the approved contractor selection plan in accordance with Law on Bidding as well as this Circular and its instructional documents on management of drug quality and prices. Only one drug/ingredient in a category (which is a part of the contract package) satisfying technical and quality requirements specified in the bidding documents/request for proposals and whose bid after correction of errors and adjustment of deviation minus (-) discount is lowest (if lowest price method is applied); whose evaluated price is lowest (if evaluated price method is applied); or whose total score is highest (if combined method is applied) shall be proposed.

3. If the bid after correction of errors and adjustment of deviation minus (-) discount (if any) of every contractor satisfying technical requirements and on the list of ranked contractors exceeds the price for the approved part in the contract package, there are the following options:

a) If the drug price in the approved contractor selection plan is considered reasonable, contractors shall be requested to submit new price offering as specified in Clause 8 Article 117 of Decree No. 63/2014/ND-CP

b) If the drug price is not reasonable, the procuring entity shall prepare a report and propose adjustment to the contract package value and send it to the competent person for consideration;

c) If sufficient supply of drugs is necessary to serve demand for medical examination and treatment, the procuring entity may consider deciding to select the drug according to contractors’ rankings when all of the following conditions are satisfied:

- The successful bid shall not exceed the effective declared or re-declared wholesale price of the drug;

- The total value of proposed drugs offered by bidders shall not exceed the total value of those parts in the contractor selection plan approved by a competent authority.

Article 33. Reporting on submission of contractor selection result appraisal

1. The procuring entity shall send 01 set of the contractor selection result appraisal to the appraising unit, including:

a) 01 original of the report on evaluation of bids/request for proposals

b) 01 set of the application for bidding documents/request for proposals (copies) appraised and approved as specified in Article 27, 28 and Article 29 of this Circular and other provisions of Law on Bidding.

2. Procedures for reporting, appraising, approving, and publishing contractor selection results are specified in Article 20 of Decree No. 63/2014/ND-CP .

Article 34. Appraising and submitting contractor selection results for approval

1. The head of the health facility shall appoint a unit to appraise the contractor selection result.

2. Duties of appraising unit:

a) Within 20 days (10 days for small contract packages) from the date on which sufficient documents are received, the appraising unit shall inspect and evaluate the contractor selection procedures specified in Article 30, 31 and Article 32 of this Circular;

b) Prepare an appraisal report and submit it to the head of the health facility for consideration for approval in accordance with provisions of this Circular and regulations of law on bidding.

3. An application for approval for contractor selection result shall include:

a) 01 original of the report on contractor selection result appraisal;

b) A set of the application for approval for contractor selection result (original) of the procuring entity.

Article 35. Approving and notifying contractor selection result

1. Within 10 working days (up to 05 working days for small contract packages) from the receipt of the sufficient application for approval for contractor selection result of the appraising unit specified in Clause 3 Article 34 of this Circular, the head of the health facility shall consider approving the result.

2. When the contractor selection result is approved, the procuring entity shall send a written notification of the contractor selection result to contractors in accordance with regulations of law on bidding.

3. The notifications sent to unsuccessful contractors shall provide explanation for their failure.

4. If the contract package is divided into smaller parts and the time for bid evaluation might affect the drug supply schedule of the health facility, the head of the health facility may consider approving the contractor selection result of one or some parts in several stages to keep the drug supply schedule unchanged.

5. If any drug in a contract package does not receive any bids or no bidders for which are successful or none of the options specified in Clause 1 of this Article is viable, the head of the health facility or the procuring entity shall cancel the procurement and submit an adjusted contractor selection plan to a competent authority for approval. The time for appraisal and approval for adjusted plan shall comply with Article 16 and Article 17 of this Circular. If drug information of the contract package including name of the active ingredient; contents/concentrations; route of administration, dosage form; category; measuring unit; quantity; unit price and total value of those drugs are unchanged comparing to the approved plan, the competent authority shall select the qualified contractor without reappraisal of the contractor selection plan.

Article 36. Successful bids

The successful bid for each drug shall not exceed its price in the contractor selection plan approved by the competent person and shall not exceed the effective wholesale price of such drug, except for the cases specified in Clause 3 Article 32 of this Circular.

Article 37. Contract conclusion and guarantee for contract execution and use of drugs

1. Before signing the contract, the procuring entity may increase or decrease the maximum quantity of drugs by less than 10% comparing to the quantity of drugs in the bidding plan under the condition that there is no change on unit price or other provisions of bids and bidding documents.

2. The selected contractor shall provide guarantee for contract execution before the effective time of the contract. The bid security value shall equal 2% - 10% of the contract value in the bidding documents and request for proposals. For smaller contract package, the bid security value shall equal 2% - 3% of the contract value in the bidding documents and request for proposals.

3. The head of the health facility and the successful contractor shall implement the drug supply contract in accordance with law on business contracts and ensure that at least 80% of the value of each part in the concluded contract shall be implemented. For emergency treatment, antidotes, and rare drugs, specially controlled drugs, fluids for intravenous infusion and other cases after reporting to the competent authority, the health facility shall ensure that at least 50% of the value of each part in the concluded contract shall be implemented.

If the health facility does not complete at least 80% of the value of each part in the concluded contract, the head of the health facility shall explain to the competent person.

4. The health facility must not buy more drug in a category than the quantity specified in the contractor selection result if the quantity of drugs in other categories of the same selected active ingredient is not completely bought under concluded contracts.

5. In the following cases, it is allowed to buy in excess to the limit by up to 20% of the quantity of drug in such category specified in the concluded contract without having to submit the additional contractor selection plan:

a) Drugs of other categories with the same active ingredient or concentration or content are depleted and only drugs of a contract package of proprietary drugs or equivalent drugs remain;

b) Other drug categories with the same selected active ingredient or concentration or content has to be suspended from supply or suspended from sale or removed from the list of drugs having evidence of bioequivalence after they are selected;

c) The contractor is unable to supply a sufficient quantity of drugs in a category as specified in the concluded contract due to force majeure events. In this case, a written notification and relevant documents shall be presented.

6. If an offered drug is changed during the contractor selection process, or the drug is supplied but the substitute drug is not offered in the bid, the investor may consider allowing the contractor to supply the substitute drug, to be specific:

a) The name of the drug or the factory or package content is changed during its sale but the number of marketing authorization certificate or number of import license remains unchanged;

b) The number of marketing authorization certificate is changed or new import license is issued but other information remains unchanged (name of drug, manufacturer, quality standards, shelf life, category); quality standards can be changed but the standard level and quality criteria shall not be lower than that of the selected drug (or offered in the bid or updated on Pharmacopoeia);

When using the substitute drug, the contractor must provide every information necessary for the procuring entity to evaluate the replacement, including: copies (certified by the contractor) of the marketing authorization or certificate of pharmaceutical product, written permissions from regulatory authorities (if any) and explanation for the unchanged quality standards of the offered drug and substitute drug.

c) The selected proprietary drug or reference bioequivalence (or offered in the bid) whose the number of marketing authorization certificate or other information and the alternative drug on the list of orginal branded drugs or the list of reference bioequivalence published by Ministry of Health;

d) Changes in name specification of herbal ingredients do not change components of the drug and allowed by the competent authority.

Chapter IV

CENTRALIZED DRUG PROCUREMENT

Article 38. General provisions on centralized drug procurement

1. Centralized drug procurement units shall:

a) Survey demand for drugs, prepare and submit a contractor selection plan, organize the contractor selection, complete and conclude contracts or framework agreements with selected contractors, publish contractor selection results and framework agreements on the websites of the Ministry of Health and Provincial Departments of Health as the basis for them to complete and sign contracts with selected contractors.

b) Supervise the progress of execution of framework agreements and contracts with selected contractors.

2. Local centralized drug procurement units shall not carry out contractor selection for supply of drugs on the national list of drugs for centralized bidding procurement or the list of drugs for procurement by price negotiation if the contractor selection result is available on the date of issuance of the bidding documents and a framework agreement has been posted on the website of Ministry of Health.

3. When surveying demand for drugs on the national list of drugs for centralized bidding procurement list or the price negotiation list, the health facility shall exclude the remaining quantity of drugs under contracts with selected contractors according to previous contractor selection results.

4. Contractor selection method: nationwide competitive bidding;

5. Contractor selection procedure: single-stage two-envelop;

6. Bid evaluation shall be carried out according to the method that evaluates both quality and price of each drug, which is one part of the contract package (combined method).

7. The centralized drug procurement shall be carried out by signing a framework agreement, except for the following cases in which a contract shall be signed directly:

a) Procurement of medicines and vaccines serving open vaccination programs/projects funded by state budget under decisions of the Minister of Health or Presidents of the People’s Committees of provinces;

b) Procurement of drugs of programs and projects funded by ODA, aid, sponsorship from domestic and overseas sponsors who require direct contract conclusion;

8. Organizing appraisal of contractor selection plan:

a) Planning – Finance Department shall organize appraisal of national centralized drug procurement plans.

b) Provincial Provincial Departments of Health shall organize appraisal of local centralized drug procurement plans.

c) Centralized drug procurement plans shall be appraised in accordance with Clause 1 Article 37 of Law on Bidding and Article 16 of this Circular.

9. Contract negotiation:

Contract negotiation shall be in accordance with Clause 1 Article 32 of this Circular, During centralized contractor selection, contract negotiation shall comply with the provisions of Clause 3 Article 19 of Decree 63/2014/ND-CP and these following cases shall be considered:

a) If a large quantity of a drug is divided into smaller contract packages specified in point a Clause 4 Article 40 of this Circular and has the same item proposed for contract awarding in several contract packages with the price difference, the contractor may be requested to analyse components of the bid price and explain about the price difference of the same item supplied at different places. These analyses shall be used as a basis for contract negotiation towards the price of the drug under the contract package whose the proposed successful bid is low in order to bring economic efficiency of the contract package.

b) If a drug in a category only has 01 certificate of marketing authorization, 01 contractor and the proposed successful bid in this drug category is higher than that of the drug having the same active ingredient, content/concentration, route of administration and dosage form in another category with more advanced technical standards and competitive price thanks to the participation of many contractors, the contract negotiation on the proposed successful bid shall follow these principles:

- The successful bid of Category 1 shall not be higher than the successful bid of proprietary drugs or reference bioequivalence;

- The successful bid of Category 2 or Category 3 shall not be higher than the successful bid of proprietary drugs or reference bioequivalence and Category 1;

- The successful bid of Category 4 shall not be higher than the successful bid of proprietary drugs or reference bioequivalence; Category 1 and Category 2 manufactured in Vietnam and Category 3;

- The successful bid of Category 5 shall not be higher than the successful bid of proprietary drugs or reference bioequivalence; Category 1; Category 2; Category 3 and Category 4.

10. If an offered drug is changed during the contractor selection process, or the drug is supplied but the substitute drug is not offered in the bid, the drug substitution shall comply with the provisions of Clause 6 Article 37 of this Circular.

11. Duties, functions, organization and operation of the national centralized drug procurement center shall be decided by Minister of Health. Duties, functions, organization and operation of the local centralized drug procurement units shall be decided by Presidents of the People’s Committees of provinces at the request of Ministry of Health.

Article 39. Responsibilities of relevant parties and effect of framework agreement

1. A health facility wishing to purchase drugs on the list of drugs for centralized drug procurement shall prepare and sign a contract with the selected contractor according to the contractor selection result and the contractual unit price does not exceed the framework agreement published. The contractor shall provide guarantee for contract execution in accordance with Article 66 of Law on Bidding and Clause 2 Article 37 of this Circular with the health facility before the effective time of the contract.

2. The unit specified in Clause 1 Article 40 and Clause 2 Article 41 of this Circular shall survey demand for drugs on the lists of each health facility under its management and regulate the plan procedures to ensure that at least 80% of the quantity of drugs reported are used. For emergency treatment, antidotes, and rare drugs, specially controlled drugs, fluids for intravenous infusion and drugs used in other emergency cases after reporting to the competent authority, the health facility shall ensure that at least 50% of the value of each part in the concluded contract shall be implemented.

3. The contractor selected by centralized procurement shall supply drugs with the quantity and schedule agreed in the contract with each health facility. During the contract implementation, the health facility and the contractor may negotiate changes to the quantity according to stipulations of the bidding documents issued by the unit in charge of centralized drug procurement. The centralized drug procurement unit shall cooperate with units in charge and selected contractors in regulating plan implementation to ensure adequate supply of drugs for the health facility.

4. Time limit for the centralized drug procurement contract (national and local) shall comply with provisions of the contractor selection plan approved by the competent authority but shall not exceed 36 months from the effective date of the centralized drug procurement results and framework agreements.

Article 40. Organizing national-level centralized drug procurement

1. The survey on demand for drug use shall follow these principles:

a) The health facilities affiliated to Ministry of Health shall survey the demand for drugs with specified names, detailed quantities, categories, supply schedules and submit the result enclosed with the documents specified in Clause 2 of this Article to the national centralized drug procurement center.

a) The health facilities under the management of ministries and regulatory authorities shall survey the demand for drugs with specified names, detailed quantities, categories, supply schedules and submit the results to the local centralized drug procurement units.

d) The local centralized drug procurement units surveys demand for drug use, reports to Provincial Departments of Health and send the drug use plan enclosed with the documents specified in Clause 2 of this Article to the national centralized drug procurement center.

c) The survey shall be annually sent to the national centralized drug procurement center before June 15^th or another deadline specified by this center.

2. Documents enclosed with the application for centralized drug procurement demand:

a) Summary of the result of contractor selection and drug use of the preceding year, the drug inventory and the quantity of drugs that are planned but have not been used at the time of making summary of the health facilities;

b) A brief explanation for the proposed drug procurement plan shall be given, and a detailed explanation shall also be given in case of fluctuations in 30% of the quantity of the used drugs of the preceding year.

b) Documents as the basis for making the drug procurement plan specified in Article 13 of this Circular;

d) The minutes of the meeting with Drug and Treatment Council of the health facility affiliated to Ministry of Health or the minutes of review of Provincial Departments of Health and its comments on the list, quantity of drugs and demand for drugs of the health facilities under the management of ministries and regulatory authorities and local health authorities.

3. The national centralized drug procurement center shall review the demand for list and quantity of drugs of each health facility under the management of Ministry of Health and survey the demand for list, quantity, supply schedule of each drug in order to develop contractor selection plan.

4. Contractor selection plan shall be developed as follows:

a) If the demand for the drug is high and a single supplier is unable to supply an adequate quantity for the whole contract package, it may be divided into smaller packages by regions or socio-economic areas or package values;

Example: Drug A is on the national list of drugs for centralized bidding procurement and the demand for drug A is 100 million tablets per year. No supplier is able to supply this drug with such quantity so it may be divided into smaller contract packages:

- + It may be divided into 03 smaller contract packages for 03 regions: contract package 1 for health facilities in the North with 40 million tablets; contract package 2 for health facilities in the Central Coast with 20 million tablets; contract package 3 for health facilities in the South with 40 million tablets;

- + It may be divided into several smaller contract packages for 07 socio-economic areas: Red River Delta, the Northeast, the Northwest; the North Central Coast, the South Central Coast, the Southeast and Mekong Delta.

b) Drug category division in contract packages and contents of contractor selection plans shall comply with Article 7 through Article 14 of this Circular. Time limit for contract execution shall comply with Clause 4 Article 39 of this Circular.

5. Organizing appraisal of contractor selection plan:

a) The national centralized drug procurement center shall submit the proposal of the contractor selection plan to Department of Planning - Finance, Ministry of Health.

b) The appraisal of contractor selection plan under the national list of drugs for centralized bidding procurement shall comply with Clause 2 Article 16 of this Circular. Planning – Finance Department shall organize the appraisal of lists, quantity of contract packages, estimated unit prices and quantity of drugs as well as contractor selection plans. In case of necessity, Planning – Finance Department shall ask for advice from Drug Procurement Consultancy Council before submitting the contractor selection plan to Minister of Health for approval.

6. Approving contractor selection plan:

Minister of Health shall consider approving contractor selection plans at the request of Planning – Finance Department.

7. Preparation for contractor selection:

According to the contractor selection plan approved by Minister of Health, the national centralized drug procurement center shall prepare the bidding documents and organize bid evaluation in accordance with Article 27 through 29 of this Circular.

8. Organizing contractor selection:

The national centralized drug procurement center shall organize the contractor selection, bid evaluation, negotiation of contracts, propose successful contractors; and report the contractor selection result in accordance with Article 30 through 33 of this Circular.

9. Appraising, approving and publishing contractor selection result:

The national centralized drug procurement center shall organize the contractor selection, bid evaluation, negotiation of contracts, propose successful contractors and report the contractor selection result in accordance with Article 30 through 33 of this Circular. It may be necessary to consult with Drug Procurement Consultancy Council before approving the contractor selection result;

b) The national centralized drug procurement center shall announce and publish contractor selection result according to Law on bidding.

10. Completing and concluding contracts or framework agreements:

a) The national centralized drug procurement center shall complete and conclude contracts or framework agreements with selected contractors in accordance with Law on bidding; publish framework agreements on the Ministry of Health's website and send written notifications to health facilities under the management of the Ministry of Health, other regulatory authorities, and Provincial Provincial Departments of Health;

b) The units surveying and proposing demand for drugs specified in Clause 1 of this Article shall notify the contractor selection result and the framework agreement to the health facilities regulated by the framework agreement.

11. Completing and concluding drug supply contracts:

In consideration of the contractor selection result, the framework agreement, the demand for drug and drug use plans of health facilities, the national centralized drug procurement center (for direct contract conclusion) and health facilities shall complete and conclude contracts with contractors ensuring:

a) Conformity with the framework agreement;

b) The price of each drug in the contract does not exceed the successful bid announced by the national centralized drug procurement center.

c) Time limit for contract execution shall be specified in the contractor selection plan approved by competent authority but may not exceed 36 months from the effective date of the centralized procurement results and framework agreements until the date parties fulfill obligations in accordance with the provisions of the contract.

12. Report on contractor selection results of national centralized drug procurement:

a) Before 10th of each month and the first 10th of each quarter or on request, contractors shall submit reports on supply of drugs on the national list of drugs for centralized drug procurement to the national centralized drug procurement center in accordance with Appendix 9 and Appendix 10 enclosed herewith.

b) Before the first 10th of each quarter or on request, the health facilities under the management of local governments and the health facilities under the management of ministries and branches shall submit reports on supply of drugs to the local centralized drug procurement units in accordance with Appendix 11 enclosed herewith.

c) Before the first 15th of each quarter or on request, the local centralized drug procurement units and the health facilities affiliated to Ministry of Health shall submit reports on supply of drugs on the national list of drugs for centralized drug procurement to the national centralized drug procurement center in accordance with Appendix 11 enclosed herewith.

13. Supervising the progress of execution of framework agreements:

The national centralized drug procurement center and the local centralized drug procurement units shall supervise and regulate drug supply for the health facilities regulated by the framework agreement in accordance with the instructions of the national centralized drug procurement center on the basis of these principles:

a) If the demand for drugs of a health facility under the management of local governments or a health facility under the management of ministries and branches exceeds the quantity of drugs specified in the framework agreement by 20%, the local centralized drug procurement unit shall be notified to regulate drug quantities between local health facilities.

Within 10 days from the receipt of the written request for regulation of the health facility, the local centralized drug procurement unit shall send a written reply to the health facility.

b) If the demand for drugs of the health facility affiliated to Ministry of Health exceeds the quantity of drugs specified in the framework agreement; or the demand for drugs of health facilities under the management of local governments or ministries and branches exceeds the capacity of the local centralized drug procurement unit; or the health facility's unexpected demand for a drug has not been mentioned in the contractor selection plan, the national centralized drug procurement center shall be notified to regulate drug quantities between health facilities. Within 05 days from the receipt of the request for regulation of the local health facility, the local centralized drug procurement unit shall submit a report to the national centralized drug procurement center in accordance with Appendix 12 enclosed herewith.

Within 10 days from the receipt of the written request for regulation of the health facility, the national centralized drug procurement center shall send a written reply to the health facility.

The regulated drug quantities of the national centralized drug procurement center shall not exceed the quantity of drugs approved in the contractor selection plan and on the national list of drugs for centralized bidding procurement. The regulation shall comply with the regulation process of drugs on the national list of drugs for centralized bidding procurement published by the national centralized drug procurement center.

14. Payments for drug supply contracts:

The national centralized drug procurement center (for direct contract conclusion); health facilities (for framework agreement conclusion) shall pay the contractors in accordance with regulations of law and terms of the concluded contracts.

The written approval for drug regulation between centralized drug procurement units is a part of Drug Purchase Contract and also a basis for the health facility and the contractor to sign appendix of contract (for regulated items in the framework agreement) or sign contract (for regulated items not in the framework agreement).

Article 41. Organizing local centralized drug procurement

1. Surveying demands for drug use:

a) The local lists of drugs for centralized bidding procurement apply to the health facilities located in localities including local health facilities, central health facilities, health facilities under the management of ministries and branches and health authorities in localities. Central health facilities, health facilities under the management of ministries and branches and internal health departments shall have the same responsibility as health facilities under the management of local authorities for preparing drug use plans in accordance with regulations on the local centralized contractor selection in their provinces.

Local centralized drug procurement units shall have the same responsibility as health facilities under the management of local authorities for surveying demand for drugs and selecting contractors for local health facilities, central health facilities, health facilities under the management of ministries and branches and internal health departments in their provinces.

b) According to the local lists of drugs for centralized bidding procurement, health facilities of provincial governments (including local health facilities, central health facilities, health facilities under the management of ministries and branches and internal health departments) shall survey demand for drugs and submit it to the local centralized drug procurement units.

c) The lists and quantities of drugs shall be sent to the local centralized drug procurement units before July 15^th or another deadline specified by the local centralized drug procurement units;

2. The local centralized drug procurement center shall review the demand for list and quantity of drugs of local health facilities and survey the demand for list, quantity, supply schedule of each drug in order to develop contractor selection plan.

3. Making contractor selection plan: Local centralized drug procurement units shall be responsible for division of drug categories in contract packages and contents of contractor selection plans shall comply with Article 7 through Article 14 of this Circular. Time limit for contract execution shall comply with Clause 4 Article 39 of this Circular.

4. Organizing appraisal of contractor selection plan:

a) Local centralized drug procurement units shall submit proposals of contractor selection plans to Provincial Departments of Health.

b) The appraisal of contractor selection plan for drugs on the local lists of drugs for centralized bidding procurement shall comply with Clause 2 Article 16 of this Circular. Provincial Departments of Health shall organize the appraisal of contractor selection plans and submit them to Chairpersons of the People’s Committees of provinces for approval;

5. Approving contractor selection plans:

Chairpersons of the People’s Committees of provinces shall consider approving the local contractor selection plans at the request of Provincial Departments of Health.

6. Preparation for contractor selection:

According to the contractor selection plans approved by Minister of Health, the local centralized drug procurement units shall prepare the bidding documents and submit them to Provincial Departments of Health for approval in accordance with Article 27 through 29 of this Circular.

7. Organizing contractor selection:

The local centralized drug procurement units shall implement the contractor selection, bid evaluation, negotiation of contracts; propose successful contractors and report on appraisal submission in accordance with Article 30 through 33 of this Circular.

8. Appraising, approving and publishing contractor selection results:

a) The local centralized drug procurement units shall prepare and submit the contractor selection results to Provincial Departments of Health for appraisal and approval;

b) Provincial Departments of Health shall appraise and approve the contractor selection results in accordance with Article 34 and Article 35 of this Circular;

c) The local centralized drug procurement units shall announce and publish the contractor selection results in accordance with Law on bidding.

9. Completing and concluding contracts or framework agreements:

a) According to the approved contractor selection results, the local centralized drug procurement units shall complete and conclude framework agreements with contractors in accordance with Law on Bidding;

b) The local centralized drug procurement units shall publish the concluded framework agreements in accordance with Law on bidding on the websites of People's Committee of provinces and Provincial Departments of Health and send written notifications to health facilities regulated by such framework agreements;

10. Completing and concluding drug supply contracts:

According to the contractor selection results, the framework agreement, the demand for drug and drug use plans of health facilities, the local centralized drug procurement units (for direct contract conclusion) and health facilities shall complete and conclude contracts with contractors ensuring:

a) Conformity with conditions in framework agreements;

b) The price of each drug in the contract does not exceed the successful bid announced by the local centralized drug procurement units.

c) Time limit for contract execution shall be specified in the contractor selection plans approved by competent authorities but may not exceed 36 months from the effective date of the centralized procurement results and framework agreements until the parties fulfill obligations in accordance with the provisions of the contract.

11. Reporting local centralized contractor selection results:

c) Before the first 10th of each quarter or on request, contractors shall submit reports on supply contract of drugs on the local lists of drugs for centralized bidding procurement to the local centralized drug procurement units in accordance with Appendix 10 enclosed herewith.

b) Before the first 10th of each quarter or on request, health facilities under the management of Ministry of Health, local governments, ministries and branches shall submit reports on drug supply results to the local centralized drug procurement units in accordance with Appendix 11 enclosed herewith.

12. Supervising progress of execution of framework agreements:

The local centralized drug procurement units shall supervise and regulate drug supply for the health facilities regulated by the framework agreement on the basis of these principles:

a) If the demand for drugs of a health facility exceeds the quantity of drugs specified in the framework agreement by 20%; or the health facility's unexpected demand for a drug has not been mentioned in the contractor selection plan, the local centralized drug procurement unit shall be notified in accordance with Appendix 12 enclosed herewith to regulate drug quantities between local health facilities. Within 10 days from the receipt of the written request for regulation of the health facility, the local centralized drug procurement unit shall send a written reply to the health facility.

The regulated drug quantities of the local centralized drug procurement units shall not exceed the quantity of drugs approved in the contractor selection plan for supply of drugs on the local lists of drugs for centralized bidding procurement by 30%. The regulation shall comply with the regulation process of drugs on the local lists of drugs for centralized bidding procurement published by the local centralized drug procurement units.

13. Payment: Health facilities shall pay contractors in accordance with regulations of law and terms of the concluded contracts. The written approval for drug regulation between centralized drug procurement units is a part of Drug Purchase Contract and also a basis for health facilities and contractors to sign appendix of contract (for regulated items in framework agreements) or sign contract (for regulated items not in framework agreements).

Chapter V

PRICE NEGOTIATION

Article 42. General provisions on price negotiation

1. Drug Price Negotiation Council (hereinafter referred to as Council):

a) Council formed by Minister of Health. Minister of Health shall provide guidance on duties and entitlements, organizational structure and operation of Council. Council shall be funded by state budget from the national centralized drug procurement center and other legal fundings.

b) Council shall include:

- A Chairperson is Minister of Health;

- 02 Deputy Chairpersons is Head of Social Insurance of Vietnam and Director of National Centralized Drug Procurement Center.

- Members who are representatives of relevant agencies affiliated to Ministry of Health, Ministry of Finance, Social Insurance Office, and independent experts in relevant fields.

c) Council shall:

- Consider price negotiation plans developed by the national centralized drug procurement center.

- Implement drug price negotiation under the approved plans;

2. The national centralized drug procurement center, a standing unit of Council, shall:

a) Develop detailed price negotiation plans;

b) Develop, appraise and approve proposals;

c) Evaluate proposals;

d) Develop estimated price negotiation plans;

dd) Publish price negotiation results;

e) Supervise and regulate the supply and use of drugs selected by price negotiation;

g) Participate in all stages of drug price negotiation process; aggregate and provide relevant information during price negotiation process;

h) Carry out other tasks at the request of Chairperson of Council.

3. Drug Procurement Consultancy Council shall advise the Minister of Health in all stages of the drug price negotiation process on request.

4. If an offered drug is changed during the contractor selection process, or the drug is supplied but the substitute drug is not offered in the bid, the unit in charge specified in Clause 1 Article 37 of this Circular shall consider approving for drug substitution specified in Clause 6 Article 37 of this Circular.

Article 43. Prepare, appraise and approve price negotiation plans

1. Aggregating demand for using drugs on the list of drugs for procurement through price negotiation:

The national centralized drug procurement center shall aggregate demand for drug use specified in Clause 1 Article 40 of this Circular.

2. Making drug price negotiation plan:

The national centralized drug procurement center shall prepare drug price negotiation plans. Contents of drug price negotiation plan shall be specified in Article 14 of this Circular with the following information:

a) Names and prices of contract packages, total value of contract packages and value of each part of contract packages in contractor selection plans;

b) The estimated price of each drug through price negotiation shall be specified in Clause 4 Article 14 of this Circular;

c) Requirements in terms of quality standards and delivery time, specific purchase conditions of each drug under price negotiation;

d) The expected time for price negotiation for each drug on the list of drugs under price negotiation;

dd) In case of necessity, the national centralized drug procurement center shall consult with Council on the price negotiation plan before submitting to the appraising unit.

3. Appraising drug price negotiation plan:

a) The national centralized drug procurement center shall submit the proposal of contractor selection plan to Planning – Finance Department for appraisal organization;

Planning – Finance Department shall appraise the lists, contract package quantities, estimated unit prices and drug quantities. The appraisal of price negotiation plan shall comply with Clause 2 and Article 16 of this Circular.

4. The Minister of Health shall consider approving the price negotiation plan on the basis of the report submitted by Planning – Finance Department. In case of necessity, Minister of Health shall consult with Drug Procurement Consultancy Council on drug bidding before approving.

Article 44. Prepare, appraise and approve proposals

According to the contractor selection through price negotiation plan approved by Minister of Health, the national centralized drug procurement center shall prepare the bidding documents, appraise and approve the proposals.

1. Preparing the request for proposals:

a) The request for proposals for drugs through price negotiation shall comply with Law on bidding, detailed documents on Law on bidding and the national centralized drug procurement center;

b) A proposal shall contain sufficient information about the contract package; instructions on preparation and submission of approvals; required capacity and experience of contractors; criteria for technical and financial evaluation. Capacity, experience and technical criteria shall be marked by “pass” or “fail”;

c) A proposal for instructions shall contain information about prices, specific economic-technical criteria to be applied during the price negotiation process that has to be provided by contractors in their quotations, such as:

- EX works, CIF, selling prices for health facilities in manufacturing countries and ASEAN countries provided by contractors;

- EX works, CIF, selling prices for health facilities in Vietnamese market.

- Indications and clinical effectiveness evaluation of drugs in treatment; The report on clinical effectiveness evaluation in treatment in comparison with other standard drugs (if any);

- Data for pharmaceutical economic analysis of drugs including: cost – efficacy, cost – benefits and cost – effects provided by the contractor.

- The contractor’s commitments to quantity and quality of drugs supplied as well as supply schedule if awarded the contract;

2. Appraising request for proposals:

a) The request for proposals under price negotiation shall be appraised before submitting to Director of the National Centralized Drug Procurement Center for approval.

b) The appraising unit shall be decided by the Director of the National Centralized Drug Procurement Center.

3. Approving request for proposals:

The Director of the National Centralized Drug Procurement Center shall approve the request for proposals according to the appraising unit’s report.

Article 45. Organizing drug price negotiation

1. Notification of bidding for drug supply under price negotiation and request for proposals shall be publicly issued.

2. Contractors prepare and submit proposals according to request for proposals.

a) Bid security and submission of proposals shall be specified in Article 30 of this Circular;

b) According to the notification of bidding for drug supply and request for proposals under price negotiation in order to prepare and submit the proposal by post or directly to the national centralized drug procurement center.

3. Evaluating proposals and preparing price negotiation plans

a) The national centralized drug procurement center shall evaluate proposals in accordance with regulations of request for proposals. Proposals shall be publicly opened. In the process of evaluation, the procuring entity may invite the contractor to negotiation and amendments to some necessary information of proposals in order to prove the contractor's qualification in terms of capacity, experience, schedule, quantity, quality, technical solutions and measures of implementing the contract package.

b) According to the contractor’s proposal and the experts’ proposal evaluation report, the national centralized drug procurement center shall prepare price negotiation plans. In case of necessity, the center shall invite clinical and pharmaceutical economic experts to participate in developing price negotiation plan for each drug.

The price negotiation plan shall summarize the information on pharmacological effect, the estimated price and successful bid of the drug under price negotiation; drugs having the same active ingredient, content/concentration, dosage form but not in the same group of offered drugs; drugs in the same group of replaceable pharmacological effect (if any), the factors relating to the price negotiation plan and terms of the framework agreement that will be negotiated.

c) Chairperson of Council shall approve the price negotiation plan before price negotiation.

4. Price negotiation and decision:

a) The national centralized drug procurement center shall invite qualified contractors to price negotiation. In case of necessity, the national centralized drug procurement center may invite representative of the drug manufacturing facility or representative of the license holder in Vietnam (including representative office) to make clear the contents relating to the drug under price nogotiation;

b) A contractor shall be invited to price negotiation if having lawful qualification, satisfying requirements of capacity, experience and technical proposal of the request for proposals and providing the estimated price that does not exceed the estimate for the approved contract package;

c) The Council shall decide whether to choose carry out the negotiations directly or by correspondence. The Council's contents shall be based on the contractor’ proposal, the proposal evaluation report, relevant information and the approved price negotiation plan;

d) If more than one contractors participate in the price negotiation of the drugs having the same active ingredient, content/concentration, dosage form, the Council shall request them to submit new quotations which specify the time and location for receiving such quotations and time for opening them, and invite them to attend the opening session. The prices in the new quotations must not exceed the negotiated prices. The contractor whose new bid is lowest shall be awarded the contract.

dd) If the first price negotiation is unsuccessful, the Council shall decide to invite or not to invite the contractor to the second negotiation. The national centralized drug procurement center shall notify the Council's official conclusion to each contractor after the first negotiation;

e) If the contractor is invited to the second price negotiation, the contractor shall submit the new proposal and quotation in accordance with the negotiation letter of the national centralized drug procurement center.

g) Successful bids through price negotiation shall be decided by the Council and contractors. The Council and the contractor shall conclude a framework agreement and other conditions after reaching agreement on price;

h) After the Council and the contractor’s representative conclude price nogotiation contracts, the national centralized drug procurement center shall send a written request for concluded price confirmation within 7 days to the contractor.

Article 46. Appraising, approving and implementing drug price negotiation results

1. Appraising and approving drug price negotiation results:

The national centralized drug procurement center shall aggregate price negotiation results and submit to Planning – Finance Department for appraisal. Time for appraisal is up to 20 days from the receipt of sufficient documents. Minister of Health shall consider approving price negotiation results on the basis of Planning – Finance Department.

- If the Council and the contractor are unable to reach agreement on price after negotiation sessions, the national centralized drug procurement center shall submit a report to Planning – Finance Department and notify the result to the contractor and health facilities nationwide.

2. Publish price negotiation results:

a) The national centralized drug procurement center shall publish contractor selection results through price negotiation and provide guidance on implementation of price negotiation results to health facilities in accordance with law.

b) For drugs on the unsuccessful list of drugs for procurement by price negotiation, according to the Council's opinions, the national centralized drug procurement center shall propose alternative procurement plans and submit them to Minister of Health for consideration and approval. For the proprietary drugs granted many certificates of marketing authorization of Category 1 specified in Article 7 of this Circular promulgated by Ministry of Health, health facilities may carry out contractor selection by themselves through competitive bidding of generic contract packages according to the Ministry of Health’s notice.

3. Payments for drug supply contracts:

a) The national centralized drug procurement center shall complete and conclude framework agreements with successful contractors; publish price negotiation results and framework agreements on the Ministry of Health's website. Responsibility of relevant parties and effect of framework agreements shall comply with Article 39 of this Circular. Selected contractors shall provide guarantee for contract execution specified in Clause 1 Article 39 of this Circular;

b) According to price negotiation results, framework agreements, distributed drug quantities and plan of drug use budget approved by the competent authority, health facilities shall conclude contracts with contractors under the condition that prices in contracts do not exceed successful bids and framework agreements published by the national centralized drug procurement center;

For effective drug supply contracts, health facilities shall regulate drug prices to ensure that they do not exceed published negotiation prices or the effective time of framework agreements.

c) The contractor selected through price negotiation shall supply drugs with the quantity, schedule and other conditions agreed in the framework agreement and the concluded contract with each health facility;

d) Time limit for contract execution shall be specified in the price negotiation plan approved by the competent authority but may not exceed 36 months from the effective date of the price negotiation result and framework agreement until the parties fulfill obligations in accordance with the provisions of the contract.

e) The health insurance authority shall make unanimous payment for all public health facilities according to price negotiation results published by the national centralized drug procurement center.

4. Report on drug price negotiation results:

Contractors through price negotiation and health facilities shall submit reports on drug supply results through price negotiation to the national centralized drug procurement center specified in Clause 12 Article 40 of this Circular.

5. Supervising progress of execution of framework agreements:

The national centralized drug procurement center shall supervise and regulate the supply and use of drugs selected by price negotiation in the concluded framework agreement specified in Clause 13 Article 40 of this Circular.

Chapter VI

IMPLEMENTATION

Article 47. Effect

1. This Circular comes into force from October 1, 2019.

2. Circular No. 11/2016/TT-BYT dated May 11, 2016 of Minister of Health providing guidance on bidding for supply of drugs for public health facilities shall be annulled from the effective date of this Circular.

Article 48. Transitional provisions

1. The contract packages whose contractor selection plans are approved before the effective date of this Circular shall comply with the provisions of Circular No. 11/2016/TT-BYT dated May 11, 2016 of Minister of Health providing guidance on bidding for supply of drugs for public health facilities, unless the facilities specified in Article 2 of this Circular volunteer to follow this Circular's provisions from the issuance date.

2. For drug manufacturing facilities satisfying EU-GMP requirements or equivalent requirements and manufacturing facilities satisfying PIC/s-GMP requirements of the national drug authority of the country considered a member of PIC/s and ICH published by Drug Administration of Vietnam on its website before the effective date of this Circular; these manufacturing facilities shall not need to undergo evaluation of satisfying EU-GMP requirements or equivalent requirements or PIC/s-GMP requirements organized by the drug authority of Vietnam within months from the effective date of this Circular.

Article 49. Reference clause

In case any of the documents referred to in this Circular is replaced or amended, the newest document shall be applied.

Article 50. Organization and implementation

1. Heads of central authorities shall instruct affiliated health facilities to select contractors in accordance with this Circular and regulations of law on contractor selection.

2. Ministers, Heads of ministrial authorities shall assign tasks and inspect the assignment applied to some contract packages of health facilities under their management.

3. Chairperson of People’s Committee of each province shall:

a) Appoint a local centralized drug procurement unit to procure drugs on the local lists of drugs for centralized bidding procurement for health facilities participating in centralized procurement locally in accordance with this Circular;

a) Instruct health facilities to organize selection of suppliers of drugs on such list in accordance with this Circular;

c) Decide addition of other drugs to the local lists of drugs for centralized drug procurement (except for drugs on the list of drugs for price negotiation and for national centralized bidding) for use at local health facilities at the request of the Director of the Provincial Department of Health. Time limit for contract execution shall comply with Clause 4 Article 39 of this Circular.

If central health facilities, internal health departments and health facilities under the management of ministries and branches use the local lists of additional drugs (except for the local lists of drugs for centralized bidding procurement issued by Ministry of Health), health authorities of other sectors and internal health departments and supervisory authorities of health facilities under the management of ministries and branches shall sign agreement with Provincial Departments of Health to submit reports to People's Committees of provinces for contractor selection organization.

d) Decide and inspect task assignments to some contract packages of health facilities under their management at the request of the Director of the Provincial Department of Health.

4. Drug administration of Vietnam, Traditional Medicine Administration of Vietnam shall update the following information on their websites:

a) Lists serving contractor selection, including:

- The list of reference authorities;

- The list of drug authorities of SRA countries;

- The list of drug authorities of countries that are state members of PIC/s and ICH;

- The list of drug manufacturing facilities in Vietnam satisfying WHO-GMP requirements granted certificates by drug authority of Vietnam;

- The list of drug manufacturing facilities satisfying EU-GMP requirements or equivalent requirements ;

- The list of drug manufacturing facilities satisfying PIC/s-GMP requirements in a country that is a member state of PIC/s and ICH and granted certificates by drug authority of Vietnam.

- The list of drug manufacturing facilities that have herbal and traditional drugs satisfying GMP requirements granted certificates by Ministry of Health of Vietnam;

- The list of drug manufacturing facilities in Vietnam that have traditional ingredients satisfying GMP requirements granted certificates by Ministry of Health of Vietnam;

- The list of drug manufacturing facilities in Vietnam that have herbal ingredients satisfying GMP requirements granted certificates by Ministry of Health of Vietnam;

b) Lists of drugs serving contractor selection, including:

- List of drugs granted certificates of marketing authorization or import licences;

- List of proprietary drugs;

- List of reference bioequivalence;

- List of drugs whose therapeutic effects equivalent to those of proprietary drugs;

- List of drugs manufactured under a processing contract or technology transfer contract in Vietnam;

- List of proprietary drugs and reference bioequivalence manufactured under a processing contract or technology transfer contract in Vietnam;

- List of drugs having documents proving bioequivalence;

- List of drugs granted certificates of marketing authorization by one of reference authority;

- List of drugs granted certificates of marketing authorization by one of drug authority of SRA countries;

- List of drugs manufactured entirely in Vietnam satisfying criteria of Category 1 specified in point c Clause 1 Article 7 of this Circular;

- List of ingredients in dosage form of glue, granule, extract, essential oil, resin, gum, jelly in accordance with regulations of Ministry of Health on quality management of herbal ingredients and traditional drugs;

- List of semi-finished herbal ingredients: glue, granule, extract, essential oil, resin, gum, jelly in accordance with regulations of Ministry of Health on quality management of medicinal ingredients;

- List of drugs on the list of national products;

- List of drugs awarded the Ministry of Health's prize of “Star of Vietnamese medicines"

- List of herbal ingredients planted and collected or naturally farmed satisfying GACP requirements and granted certificates by Ministry of of Health of Vietnam;

- List of drugs manufactured in Vietnam satisfying requirements for treatment, price and supply capacity;

- List of herbal ingredients domestically planted and collected satisfying requirements for treatment, price and supply capacity;

- List of drugs manufactured from active ingredients in SRA countries or active ingredients granted CEP certificates;

- List of drugs and manufacturing facilities, suppliers failing to satisfy quality requirements or complying with regulations on bidding and drug supply;

c) Information on declared/re-declared drug price;

d) Information on drug price and successful bids of herbal ingredients for health facilities;

dd) List of capable, experienced and reputable drug manufacturers and suppliers to be invited to selective bidding.

5. When purchasing drugs funded by health insurance, the social insurance shall send officials to participate in:

a) Making, appraising the contractor selection plan;

b) Making, appraising the bidding documents;

c) Evaluating the bid and appraising the contractor selection result.

6. During the contractor selection process, the health facility or organizing unit shall send documents (except for confidential documents in accordance with Law on bidding) to members participating in the Council or Expert group specified in points a b c Clause 5 of this Article before meeting within 5 days (except for urgent drug procurement for treatment). After the above deadline, the health facility or organizing unit shall follow the steps in the process of contractor selection to hold meeting of Council or Expert Group. The members participating in the above-mentioned Councils or Expert Groups shall comply with regulations of these Councils or Expert Groups according to the Heads of Councils or Expert Groups.

Participants’ opinions shall be raised at the meeting. Any participant's opinion that is different from that of the others shall be specified in the report.

7. Procurement of health insurance drugs of private health facilities shall be based on the following principles:

a) Private health facilities may participate in centralized drug procurements (national procurements, local procurements, price negotiations) in their provinces. Such private health facilities shall formulate drug use plans and comply with regulations on local centralized bidding as if they are health facilities under the management of local authorities. Provincial Departments of Health and local centralized drug procurement units shall organize biddings for supply of drugs for private health facilities as if they are health facilities under the management of local authorities.

b) Private health facilities not participating in centralized drug procurements (national procurements, local procurements, price negotiations) may carry out contractor selection themselves in accordance with law on bidding, instructional documents and this Circular.

c) If a private health facility does not organize contractor selection as prescribed in points a and b of this Circular, the social insurance authority shall only pay according to the published result of local or national contractor selection or price negotiation result if the information such as trade name, number of marketing authorization certificate or number of import license, dosage form, content/concentration, route of administration, package contents, manufacturer, manufacturing country are correct.

If the drug is not included in the local or national-level concentrated procurement plan or price negotiation plan, it shall be paid for according to successful bids of public health facilities of the same districts which are published by Social Insurance Office in accordance with Point b Clause 3 Article 77 of Decree No. 63/2014/ND-CP .

8. Health facilities requesting for announcement of information specified in Clause 1 Article 7 of this Circular shall provide the following documents and be legally responsible for their precision:

a) Certificates of free sale granted by drug authority of SRA countries and consular legalization (original copies or certified true copies).

b) List of information proving drugs sold in Vietnam and drugs granted certificates of free sale by SRA countries having the same dosage form, manufacturing process, quality standard, verifying method; active ingredient and excipient having the same quality standard, manufacturing facility and manufacturing place specified in Appendix 13 enclosed herewith.

9. Health facilities requesting for evidence of proprietary drugs or reference bioequivalence sold for the first time in countries not on the SRA list specified in point b Clause 2 Article 8 of this Circular shall provide the following documents and be legally responsible for their precision:

a) Patents for modern medicines granted by one of competent intellectual property authority. A patent for the active ingredient (if the drug has only one active ingredient) or the mixture of active ingredients (if the drug has more than one active ingredients) enclosed with the request for protection of the corresponding drug (original copy or certified true copy).

b) International birth date of drugs shall be expressed in periodic safety update reports;

c) Other evidence (if any).

Article 51. Responsibility for implementation

Director of Drug administration of Vietnam, Director of Traditional Medicine Administration of Vietnam, Director of Planning – Finance Department, Chief of the Ministry Office, Ministrial Chief Inspector, Director of the National Centralized Drug Procurement Center, Heads of units affiliated to Ministry of Health, Director of Departments of Health of provinces, drug business facilities and other relevant organizations/individuals/authorities shall implement this Circular.

Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Health for consideration./.

 

PP. PRIME MINISTER DEPUTY MINISTER Truong Quoc Cuong