Circular No. 11/2016/TT-BYT dated May 11, 2016 of the Ministry of Health on bidding for drugs supply for public health facilities

THE MINISTRY OF HEALTH

Circular No. 11/2016/TT-BYT dated May 11, 2016 of the Ministry of Health on bidding for drugs supply for public health facilities

Pursuant to the Law on Bidding No. 43/2013/QH13 dated November 26, 2013;

Pursuant to the Law on Pharmacy No. 105/2016/QH13 dated April 06, 2016;

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

Pursuant to the Government s Decree No. the Government s Decree No. 63/2012/ND-CP dated August 31, 2012 defining the functions, tasks, powers and organizational structure of the Ministry of Health;

Pursuant to the Prime Minister’s Decision No. 08/2016/QD-TTg dated February 26, 2016 on concentrated procurement of state-owned property;

In consideration of opinions of the Ministry of Finance in Official Dispatch No. 441/BTC-HCSN dated January 12, 2016 and the Ministry of Planning and Investment in Official Dispatch No. 10485/BKHDT-QLDT dated November 26, 2015;

At the request of Director of Planning – Finance Department,

The Minister of Health promulgates a Circular on bidding for supply of drugs for public health facilities.

Chapter I

GENERAL PROVISIONS

Article 1. Scope andsubject of application

1. This Circular provides for bidding for supply of drugs funded by state capital, health insurance fund, proceeds from medical examination and treatment services, and other lawful sources of income of public health facilities.

2. This Circular does not apply to:

a) Drugs ordered by the State: Comply with the Government s Decree No. 130/2013/ND-CP dated October 16, 2013 on the production and provision of public-utility products and services;

b) Medical oxygen, nitrite oxide, in vitro diagnostic reagents: Comply with regulations of law on bidding for procurement of goods serving regular operation of state agencies, the People’s armed force units, public service agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations;

c) Whole blood, qualified blood preparations: Comply with Circular No. 33/2014/TT-BYT dated October 27, 2014 of the Minister of Health on maximum prices and cost of pricing a unit of whole blood or blood qualified preparation.

3. This Circular applies to agencies, organizations and individuals participating or involved in bidding for supply of drugs prescribed in Clause 1 of this Article.

4. Private health facilities participating in provision of medical examination and treatment services covered by health insurance may apply this Circular.

Article 2. Definitions

For the purpose of this Circular, the terms below are construed as follows:

1. Original brand name drug means the first drug granted the certificate of free sale based on sufficient data about its quality, safety and efficacy.

2. Generic drug means a drug having the same active ingredient, concentration, dosage form as those of the original brand name drug and is used as a substitute for the original brand name drug.

3. Bioavailability means an indicator of degree and rate at which an active ingredient or substance in a drug is absorbed into the body for it to be available at the site of physiological activity inside the body.

4. Bioequivalence means the equivalence of bioavailability between two drugs under the same conditions.

5. Herbal ingredient means a medicinal ingredient derived from plants, animals, minerals and is qualified for medicinal use.

6. Traditional ingredient means an herbal ingredient that is processed according to traditional drug principles and methods and is used for production of traditional drugs, prevention or treatment of diseases.

7. Herbal drug means a drug whose ingredients are derived from herbal ingredients and its effects are supported by scientific evidence, except for traditional drugs.

8. Traditional drug (including traditional ingredients) means a drug that composed herbal ingredients that are processed, prepared, or combined according to traditional drug principles or methods; it may have a traditional or modern dosage form.

9. Equivalent drugs are drugs having equivalent content and bioequivalence and have the same efficacy and safety if used with the same dose.

10. A drug manufacturer fulfilling EU-GMP or PIC/s-GMP requirements means a drug manufacturer granted a Certificate of EU-GMP or PIC/s-GMP or equivalent standards by a competent authority of a country that is a member state of European Medicines Agency or participant in International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) or Pharmaceutical Inspection Co-operation Scheme (PIC/s).

11. ICH stands for International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use.

12. PIC/S stands for Pharmaceutical Inspection Co-operation Scheme.

Article 3. Responsibility for preparing the drug use plan and organize selection of drug supplier (hereinafter referred to as “contractor”)

1. In consideration of the need for drugs and comments of the Drug and Treatment Council, the head of the health facility shall make decision and develop the drug use plan which consists of the information specified in Article 6 of this Circular and the following provisions:

a) For drugs on the List of Drugs for procurement by national-level concentrated procurement, List of drugs for procurement by price negotiation: the plan shall be made according to the notice of the unit in charge of national-level concentrated drug procurement for a period of up to 36 months, separated by drug category and supply interval (quarterly, annually);

b) For drugs on the List of Drugs for local-level concentrated procurement, the plan shall be made according to the notice of the unit in charge of local-level concentrated drug procurement for a period of up to 36 months, separated by drug category and supply interval (quarterly, annually);

c) The drug use plan of a health facility that carries out contractor selection itself shall be made for a period of up to 12 months or on request, separated by drug category.

2. Regarding drugs that are not on the List of Drugs for national-level concentrated procurement, List of drugs for procurement by price negotiation and List of Drugs for local-level concentrated procurement, health facilities shall carry out contractor selection in accordance with Chapter II of this Circular to maintain their continuous operation.

3. The List of drugs for local procurement shall apply to local health facilities and central health facilities located in the same area.Centralhealth facilitiesshallformulate drug use plans in accordance with regulations on concentrated procurement of drugs applied to health facilities under the management of local governments. Provincial Departments of Health and local procuring units shall organize bidding for supply of drugs for central health facilities located in their provinces the same as local health facilities.

Chapter II

SELECTION OF DRUG SUPPLIER

Section 1. MAKING CONTRACTOR SELECTION PLAN

Article 4. Basis for making contractor selection plan

1.Thecontractor selection plan shall be made by the health facility and submitted to a competent person for approval. The plan shall be made annually or whenever necessary on the following bases:

a) 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 of the previous year and the anticipated demand for drugs in the current year;

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

- Contract for medical examination and treatment covered by health insurance in the planning year 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 current year of the health facility according to its level.

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 current year of the health facility according to its level.

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.

Article 5. Categorization of procurements and drugs

The head of the health facility shall decide the categorization of procurements, such as:

1. Generic drug procurement:

A generic drug procurement 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 procurement. The categorization of drugs is based on technical criteria and licensed technologies as follows:

a) Drug categorization:

- Category 1:

+ Drugs manufactured by a manufacturing line that fulfill EU-GMP or PIC/s-GMP requirements at a plant in Australia or a country that is a member state of ICH;

+ Drugs manufactured by a manufacturing line that fulfill WHO-GMP requirements granted certificates by the Ministry of Health of Vietnam and granted certificates of free sales in Australia or a country that is a member state of ICH by the national drug authority of such country;

- Category 2: Drugs manufactured by a manufacturing line that fulfill EU-GMP or PIC/s-GMP requirements but not in Australia or a country that is a member state of ICH;

- Category 3: Drugs manufactured by a manufacturing line that fulfill WHO-GMP requirements granted certificates by the Ministry of Health of Vietnam;

- Category 4: Drugs having evidence of bioequivalence announced by the Ministry of Health;

- Category 5: Drugs other than those specified in Category 1 through 4 and Point a Clause 1 of this Article.

b) Bidders shall be sorted according to technical criteria their drugs satisfy.Ifadrugsatisfies criteria of more than one category, its supplier shall be sorted into one or some categories corresponding to the technical criteria their drug satisfies, provided the bid price for the same drugs in all categories participated by the bidder are consistent. To be specific:

- A bidder whose drug satisfies criteria of Category 1 shall be sorted into Category 1, Category 2, Category 5;

- A bidder whose drug satisfies criteria of Category 2 shall be sorted into Category 2, Category 5;

- A bidder whose drug satisfies criteria of Category 3 shall be sorted into Category 3, Category 5;

- A bidder whose drug satisfies criteria of Category 4 shall be sorted into Category 4, or another Category whose criteria are satisfied;

- A bidder whose drug does not satisfy criteria of Category 1, Category 2, Category 3, and Category 4 shall be sorted into Category 5.

c) If an offered drug is manufactured by more than one facility, all of them have to satisfy criteria of the Category into which they are sorted.

2. Procurement of original brand name drug or equivalent drug:

a) The head of the health facility shall decide the procurement of original brand name drug or equivalent drug at the request of the Drug and Treatment Council:

b) Drugs included in the procurement are original brand name drugs, drugs whose therapeutic effects Article equivalent to those of the original brand name drug on the List published by the Ministry of Health.

3. Traditional drug procurement (except for traditional ingredients specified in Clause 5 of this Article), herbal drugs: Divided into categories according to technical criteria and licensed technologies:

a) Category 1: Traditional drugs and herbal drugs manufactured by a manufacturing line satisfying WHO-GMP requirements applied to traditional drugs and herbal drugs and granted a certificate by the Ministry of Health of Vietnam;

b) Category 2: Traditional drugs and herbal drugs manufactured by a manufacturing line that has not granted a certificate of WHO-GMP by the Ministry of Health of Vietnam;

A supplier of a traditional drug or herbal drug that satisfies criteria of Category 1 shall be sorted into Category 1 or Category 2; If such bidder participates in both categories, the bids submitted in both categories must be consistent.

4. Herbal ingredient procurement:

a) Category 1: Herbal ingredients farmed and harvest in accordance with GACP-WHO requirements;

b) Category 2: Herbal ingredients other than those specified in Point a Clause 4 of this Article.

A supplier of an herbal ingredient that satisfies criteria of Category 1 shall be sorted into Category 1 or Category 2; If such bidder participates into both Categories, the bids submitted in both categories must be consistent.

5. Traditional ingredient procurement:

a) Category 1: Traditional ingredients processed by facilities eligible to process herbal ingredients as published on the website of Traditional Medicine Administration of Vietnam;

b) Category 2: Traditional ingredients other than those specified in Point a Clause 5 of this Article.

A supplier of a traditional ingredient that satisfies criteria of Category 1 shall be sorted into Category 1 and/or Category 2, provided the bids submitted in both categories must be consistent.

6. Foreign drugs processed in Vietnam shall be categorized according to the fulfillment corresponding technical criteria and licensed technologies of the hirer and the processor by applying the less demanding technical criteria. If the drugs of both the hirer and the processor satisfy WHO-GMP requirements, they shall be sorted into Category 5. If the overseas drug-manufacturing facilities are inspected and certified by the Ministry of Health of Vietnam, they shall be sorted into Category 3.

If a foreign drug that satisfies EU-GMP or PIC/s-GMP requirements at a manufacturing facility in Australia or a member state of ICH is processed in Vietnam, it shall be sorted into the Category corresponding to the technical criteria and licensed technologies certified by the competent authority of the hirer’s home country when the following conditions are satisfied:

a) The processing must include all or some stages of the drug manufacture process. The processing contract must contain a schedule for the hirer to fully transfer technology to the processor with an aim to manufacture of 100% Vietnam-made drugs. The time limit for technology transfer is 05 years;

b) For drugs undergoing the last packaging stage (packaging, labeling) for sale in Vietnam, the time limit for going through this stage is 03 years; the processing contract must have a schedule for the hirer to fully transfer technology within the time limit specified in Point a Clause 6 of this Article.

Article 6. Content of contractor selection plan

1. The procurement name must reflect its nature and content, appropriate for the need and level of the health facility. The division of procurements and drugs shall comply with Article 5 of this Circular. If a procurement is divided into smaller parts, each of them must have a suitable name. Specific information in the appendix to the contractor selection plan:

a) The name of each part of procurement of generic drugs shall contain: Name of active ingredient, category (or technical category); content/concentration; route of administration, dosage form; measuring unit, quantity; unit price and total value;

b) The name of each part of procurement of brand name drugs or equivalent drugs shall contain: Name of the drug and the phrase “hoặc tương đương điều trị” (or equivalent drugs); names of active ingredients, category (or technical category); contents/concentrations; route of administration, dosage form; measuring unit, quantity; unit price and total value. If a single active ingredient has more than one proprietary name on the List of brand name drugs published by the Ministry of Health, all of the proprietary names must be specified;

c) The name of each part of a procurement of traditional drugs or herbal drugs shall contain: Name of drug; route of administration, dosage form; measuring unit, quantity; category; unit price and total value;

Names of traditional drugs and herbal drugs shall be written as follows:

- Only specify the drug ingredients; do not write trade names;

- 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 the drug according to opinions of Drug and Treatment Council.

d) The name of each part of a procurement herbal ingredients or traditional ingredients: Name of herbal ingredient/traditional ingredient; scientific name; origin, quality standards; raw form/processing method; package contents; category; measuring unit, quantity; unit price and total value.

2. Procurement price:

a) The procurement price is the total value of the procurement, including all expenses;

b) If a procurement is divided into smaller parts, the unit price and value of each part must be specified in accordance with Clause 1 of this Article in addition to the procurement value. The unit price in the contractor selection plan shall be proposed by the planning health facility;

c) When making the contractor selection plan, the procuring entity shall check successful bids over the previous 12 months of health facilities published by the Ministry of Health (Drug Administration of Vietnam, Traditional Medicine Administration of Vietnam) or Social Insurance Office on their website. To be specific:

- The proposed price of each drug bases onthe bid price published on Drug Administration of Vietnam, Traditional Medicine Administrationof Vietnam’s website and must not exceed the highest successful bid for that drug in each Category;

- For drugs whose price are higher than the bid price that been published over the previous 12 months by the Ministry of Health (Drug Administration of Vietnam, Traditional Medicine Administration of Vietnam) or Social Insurance Office or don’t have bid price, the head of the health facility shall refer quotations or invoices of at least 03 suppliers; make sure the planning price must not exceed the price in quotations or invoices. If there are 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 proposed price when the contractor selection plan is made.

3. 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).

4. Contractor selection methods and procedures:

a) Depending on the scale and nature of each procurement, the health facility shall select one of the methods specified in Article 20 through 25 of the Law on Bidding and guidance in this Circular.

b) Contractor selection procedures: Depending on the contractor selection method and scale of the procurement, the health facility shall propose contractor selection procedures as prescribed in Article 28 and Article 29 of the Law on Bidding and Government s Decree No. 63/2014/ND-CP detailing a number of articles of the Bidding Law regarding contractor selection and guidance in this Circular. For a small procurement that requires both quality and good prices, the single-stage two-envelop bidding procedures shall be applied.

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

6. The type of contract shall depends on the scale and nature of the procurement and supply method as prescribed in Article 62 of the Law on Bidding.

7. 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 7. Submission of contractor selection plan for approval

1. The head of 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) The basis for making the contractor selection plan as prescribed in Article 4 of this Circular;

b) Contents of the contractor selection plan specified in Article 6 of this Circular, to be specific:

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

- The contractor selection method and procedures applied to each procurement shall be one of those specified in Articles 10, 12, 13, 14, 15, 16, 17 of this Circular. If open tender is not applied, the proposal must explain the reason for choosing other methods.

- The list and quantities of drugs of each part of the contractor selection plan shall comply with Article 3 of this Circular and there has to be a roadmap for increase of ratio of Vietnam-made drugs.

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 prescribed in Article 4 of this Circular;

c) Minutes of the meeting with Drug and Treatment Council and its comments on the list, quantity of drugs, the need for brand name drugs or equivalent drugs, the expression of names and concentrations of traditional drugs or herbal drugs, or expression of origin of herbal ingredients or traditional ingredients.

4. The proposal of the contractor selection plan shall be sent by post or directly to the authority to approve contractor selection plans as prescribed by law.

Article 8. Appraisal of contractor selection plan

The contractor selection plan shall be appraised before it is submitted to the competent person for approval.

1. Appraisal:

a) For public health facilities under the management of Ministries, ministerial agencies, Governmental agencies: Ministers, Heads of ministerial agencies and Governmental agencies 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, Provincial Departments of Health shall cooperate with relevant local agencies in organizing the appraisal of contractor selection plans;

2. Duties of the appraising unit:

a) Appraise the contents specified in Articles 4, 5, 6, 7 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. 2 enclosed with Circular No. 10/2015/TT-BKHDT on plan for contractor selection; 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 Article 9 of this Circular for approval.

Article 9. Approving contractor selection plans

1. The power to approve contractor selection plans:

a) Ministers, Heads of ministerial agencies and Governmental agencies have the power to approve contractor selection plans of public health facilities under their management;

b) Presidents of the People’s Committees of provinces and central-affiliated cities take responsibility for approving contractor selection plans of public health facilities under their management;

c) Ministers, Heads of ministerial agencies and Governmental agencies, and Presidents of the People’s Committees of provinces and central-affiliated cities may decentralize the power to approve contractor selection plans in accordance with regulations of law on regular procurement.

2. A person mentioned in Clause 1 of this Article shall consider approving the contractor selection plan within 05 working days from the receipt of the appraisal report and the proposal.

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

Section 2. CONTRACTOR SELECTION METHODS

Article 10.Open tender

Open tender shall be applied to every procurement regulated by this Circular, except for the cases in Article 11 through 15 hereof.

Article 11. Selective bidding

1. Selective bidding shall be applied to any procurement having demanding technical requirements 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 12. Direct contracting

1. Direct contracting shall be applied to:

a) Procurements specified in Point a Clause 1 Article 22 of the Law on Bidding;

b) Procurements specified in Article 79 of Decree No. 63/2014/ND-CP.

In case of direct contracting specified in Point a Clause 1 Article 22 of the Law on Bidding (except for procurements that are state secrets), after the investor or supervisory body of the procurement selects a capable contractor, the investor shall complete procedures for submitting the contractor selection plan to a competent person for approval within 07 days from the day on which the contract is awarded. In this case, the contractor selection plan shall be exempt from appraisal.

2. The direct contracting procedures are specified in Article 55 and Article 56 of Decree No. 63/2014/ND-CP.

Article 13. Competitive offering

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

a) The procurement value does not exceed 05 billion VND;

b) The drug to be procured is 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 procurement is funded by state budget, it is required to have an approved cost estimate. If the procurement is funded by another funding source, it must be sufficient to pay for the procurement on schedule.

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

Article 14. 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 scale 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 scale 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 contract negotiation;

d) The period of time from the conclusion date of the earlier contract to the day 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 with 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 9 of this Circular for consideration.

2. If the previous contractor is no longer capable of executing the direct procurement contract, another contractor who capacity, experience, technology, and prices satisfy the requirements 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 15. Self-supply

1. Self-supply shall be apply to the procurements specified in Article 25 of the Law on Bidding after all conditions 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 16. Single-stage one-envelop procedures

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

1. Small drug procurements (procurement value not exceeding 10 billion VND) through open tender or selective bidding as prescribed in Article 63 of Decree No. 63/2014/ND-CP.

2. Drug procurement through competitive offering.

3. Drug procurement through direct procurement.

4. Drug procurement through usual direct contracting.

Article 17. Single-stage two-envelop procedures

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

1. Drug procurements through open tender or selective bidding whose value exceed 10 billion VND.

2. Drug procurements whose value does not exceeding 10 billion VND through open tender or selective bidding but both quality and prices have to be taken into account.

Section 4. Bidding documents, request for proposals

Article 18. Preparing bidding documents, request for proposals

1. The bidding documents or request for proposals shall be prepared in accordance with the Law on Bidding, instructional documents, and the model bidding documents applying single-stage one-envelop procedures in Appendix 03 or model bidding documents applying single-stage two-envelop procedures in Appendix 04 enclosed herewith.

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

3. The bidding documents or request for proposals must specify that bidders must 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.

Article 19. Appraising bidding documents, request for proposals

1. The bidding documents or request for proposals must be appraised before it is submitted to the head of the health facility for approval.

2. The appraising unit shall be decided by the head of the health facility.

3. Duties of the appraising unit:

a) Inspect the content of the bidding documents or request for proposals in accordance with the Law on Bidding and 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 20. Approving bidding documents, request for proposals

The head of the health facility shall consider approving the bidding documents or request for proposals within 10 days from the day on which the appraisal report and sufficient documents are received from the appraising unit.

Section 5. ORGANIZIGN CONTRACTOR SELECTION

Article 21. 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. The bid security value shall equal 1% - 3% of the procurement value (1% - 1.5% for small procurements).

Iftheprocurementisdividedintosmallerparts, the bid security value for each part shall equal 1% - 3% of the value of such part (1% - 1.5% for small procurements).

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

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

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

b) Deposit with checks.

4. The procuring entity shall specify the validity period of the bid in the request for proposals/bidding documents 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 bidder shall submit 02 sets of the bid/proposal (01 original and 01 copy) to the procuring entity before the bid closing time.

Article 22. Evaluating bids/proposals

1. Depending on the nature and scale of the procurement, 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 the Law on Bidding. The evaluation method must be specified in the bidding documents/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.

3. The standards for evaluating bids/proposals shall comply with provisions in the model bidding documents in Appendix 03 or Appendix 04 enclosed herewith and be specified in the bidding documents/request for proposals. Regulations on incentives in Article 3 through 6 of Decree No. 63/2014/ND-CP shall be applied.

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

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

b) Single-stage two-envelop procedure: Article 27 through 30 of Decree No. 63/2014/ND-CP shall apply.

5. Time limit for evaluating proposals is 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 open tender 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 23. Contract negotiation and proposing successful bidder

1. Contract negotiation shall be carried out before the procuring entity proposes the successful bidder. The procuring entity shall propose the successful bidder for each part of the approved contractor selection plan in accordance with the Law on Bidding and its instructional documents regarding management drug quality and drug prices.

Each drug or drug category in the procurement (which is a part of the procurement), the bidder 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 mark is highest (if combined method is applied) shall be ranked first and invited to contract negotiation.

2. For procurements of generic drugs, traditional drugs, herbal drugs, herbal ingredients or traditional ingredients: Only one drug in a category (which is a part of the procurement) that meets technical requirements 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 mark is highest (if combined method is applied) shall be proposed.

3. Conditions for being proposed for contract awarding are specified in Article 43 of the Law on Bidding and the model bidding documents in Appendix 03 or Appendix 04 enclosed herewith.

Article 24. Reporting contractor selection result

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

a) 01 original copy of the report on evaluation of bids/proposals;

b) 01 set of bidding documents/request for proposals (copies) evaluated and approved in accordance with Article 18 through 20 of this Circular and other regulations of law on bidding.

2. An application for approval for contractor selection result consists of:

a) 01 original copy of the contractor selection result verification report;

b) 1 application for approval for contractor selection result (original copy) of the procuring entity.

3. Procedures for reporting, verifying, approving, and publishing contractor selection result shall comply with Decree No. 63/2014/ND-CP. To be specific:

a) Single-stage one-envelop procedure: Article 20 of Decree No. 63/2014/ND-CP shall apply;

b) Single-stage two-envelop procedure: Article 31 of Decree No. 63/2014/ND-CP shall apply.

Article 25. Verifying and submitting contractor selection result

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

2. Duties of the verifying unit:

a) Inspect and appraise the contractor selection process within 20 days (10 days for small procurements) from the day on which sufficient documents are received.

b) Prepare a verification report and submit it to the head of the health facility in accordance with provisions of this Circular and regulations of law on bidding.

Article 26. Approving and notifying contractor selection result

1. The head of the health facility shall consider approving the contractor selection result within 10 days (5 working days for small procurements) from the day on which sufficient documents are received from the verifying unit as prescribed in Point b Clause 2 Article 25 of this Circular.

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

3. The notifications sent to unsuccessful bidders must provide explanation for their failure.

Article 27. Successful bidprice

The successful bid price for each drug must not exceed its price in the contractor selection plan approved by the competent person and must not exceed the effective wholesale price of such drug, except for the case in Clause 1 Article 35 of this Circular.

Article 28. Contract conclusion and execution

1. The health facility and successful bidder shall execute the drug supply contract in accordance with regulations of law on business contracts.

2. The health facility must not buy drug in a category more 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.

3. 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 are depleted and only drugs belonging to a procurement of brand name drugs or equivalent drugs remain;

b) The supply of drugs in other categories of the same selected active ingredient has to be suspended or their registration numbers has expired and not been renewed, or they have been suspended from sale or removed from the list of drugs having evidence of bioequivalence after they are selected;

c) The contractor is not able to supply a sufficient quantity of drug in the category as specified in the concluded contract because of a force majeure event. In this case, a written notification and supporting documents must be presented.

Chapter III

CONCENTRATED DRUG PROCUREMENT AND PRICE NEGOTIATION

Article 29. Concentrated drug procurement

1. The unit in charge of concentrated drug procurement shall 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 conclude contracts with selected contractors.

2. Theunit in charge of concentrated drug procurement shall supervise the progress of execution of framework agreements and contracts with selected contractors. Duties, functions, organization and operation of units in charge of national-level concentrated drug procurement shall be decided by the Minister of Health; Duties, functions, organization and operation of units in charge of local-level concentrated drug procurement shall be decided by Presidents of the People’s Committees of provinces.

3. National and local-level concentrated drug procurement:

a) Contractor selection method: nationwide competitive bidding;

b) Contractor selection procedure: single-stage two-envelop procedure;

c) 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 procurement (combined method).

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

- 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;

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

4. The Minister of Health shall appoint an affiliated unit to appraise the national-level concentrated drug procurement plan and the drug price negotiation plan.

5. Provincial Departments of Health shall organize the appraisal of the local-level concentrated drug procurement plans.

6. Concentrated drug procurement plans shall be appraised in accordance with Clause 1 Article 37 of the Law on Bidding.

Article 30. Price negotiation

1. Drug Price Negotiation Council consists of:

a) A Chairperson and Deputy Chairperson appointed by the Minister of Health;

b) Members who are representatives of relevant agencies affiliated to the Ministry of Health, the Ministry of Finance, Social Insurance Office, and independent experts in relevant fields decided by the Minister of Health.

2. Drug Price Negotiation Council has the responsibility to:

a) Formulate price negotiation plan and send it to a unit appointed by the Minister of Health which will asses and submit the plan to the Minister of Health for approval;

b) Organize the drug price negotiation under the approved plan;

3. The unit in charge of national-level concentrated drug procurement has the responsibility to:

a) Participate in all stages of the drug price negotiation process;

b) Publish the drug price negotiation result and the framework agreement.

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

5. The Chairperson of Drug Price Negotiation Council shall make decisions and take responsibility for such decisions in consideration of opinions of other members. Members of Drug Price Negotiation Council shall work part-time. Participants in Procurement Consultancy Council shall not participate in Drug Price Negotiation Council. The operating cost of Drug Price Negotiation Council shall be covered by state budget as prescribed by law.

6. The Minister of Health shall provide for duties and entitlements, organizational structure, and operation of Drug Price Negotiation Council.

Article 31. Responsibilities of relevant parties and effect of the framework agreement

1. A health facility wishing to purchase drugs on the List of drugs for concentrated procurement or List of drugs for procurement through price negotiation shall prepare and sign a contract with the selected contractor according to the contractor selection result or price negotiation result, provided the contractual unit price does not exceed the framework agreement published.

2. The unit specified in Clause 1 Article 32 shall survey demand for drugs on the lists of each health facility under its management and regulate plan procedures to ensure that 80% of the quantity of drugs reported are used (except for drugs for emergency treatment, antidotes, and rare drugs).

3. The contractor selected through concentrated procurement and price negotiation 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 concentrated drug procurement. The unit in charge of concentrated drug procurement shall cooperate with focal units and selected contractors in regulating plan implementation to ensure adequate supply of drugs for health facilities.

4. Health facilities shall comply with provisions in Article 28 of this Circular regarding the use of selected drugs and sign contracts through concentrated procurement and price negotiation.

a) If the demand for drugs of a health facility exceeds the quantity specified in the framework agreement by more than 20%, the unit in charge of concentrated drug procurement shall be notified to regulate drug quantities between local health facilities.

b) If the demand for drugs of provinces and central health facilities (except for health facilities participating in local-level concentrated drug procurement) exceeds the quantity specified in the framework agreement by more than 20%, the unit in charge of national-level concentrated drug procurement shall be notified to regulate drug quantities between provinces and central health facilities, provided the quantity specified in the national concentrated contractor selection plan or price negotiation plan approved is not exceeded by more than 20%.

The validity period of the result of national or local-level concentrated drug procurement and price negotiation shall be specified in the approved contractor selection plan and shall not exceed 36 months from the day on which such result comes into force.

Article 32. Organizing national-level concentrated drug procurement

1. Surveying demand for drugs: According to the drug use plans formulated in accordance with Point a Clause 1 Article 3 of this Circular, the health facility shall prepare and submit the application for concentrated drug procurement its superior regulatory authority as follows:

a) Health facilities under the management of the Ministry of Health shall survey demand for drugs with specified names, categories, and supply schedule, and submit the result to the unit in charge of national-level concentrated drug procurement;

b) Health facilities under the management of Ministries and regulatory bodies, (except for those participating in local-level concentrated drug procurement): Ministries, ministerial agencies, Governmental agencies shall survey demand for drugs with specified names, categories, and supply schedule of each health facility under their management, and submit the results to the unit in charge of national-level concentrated drug procurement;

c) Health facilities under the management of local governments, (including central health facilities participating in local-level concentrated drug procurement as prescribed in Clause 3 Article 3 of this Circular): the units in charge of local-level concentrated drug procurement shall survey demand for each drug and each drug category of each health facility under their management, and submit the results to Provincial Departments of Health, which will send them to the unit in charge of national-level concentrated drug procurement;

d) The List of names and quantities of drugs shall be sent to unit in charge of national-level concentrated drug procurement before the 15^thof August or another deadline specified by unit in charge of national-level concentrated drug procurement;

dd) Unit in charge of national-level concentrated drug procurement has the responsibility to:

- Survey the necessary quantity and supply schedule of each drug to formulate the contractor selection plan;

- Propose a ratio (%) of additional purchase not exceeding 30% in the contractor selection plan. The ratio shall be specified in the bidding documents for each drug. In this case, the unit in charge of national-level concentrated drug procurement shall make an announcement and specify the ratio in the framework agreement. Health facilities may purchase more if the registered quantity of drugs are used up, but the additional purchase must not exceed the ratio specified in the contractor selection plan.

2. Making, appraising, and approving contractor selection plan:

a) Making contractor selection plan:

In consideration of the demand for drugs, theunit in charge of national-level concentrated drug procurementshallset up procurements and prepare the contractor selection plan as follows:

- Each drug on the List of drugs for national-level concentrated procurement is a procurement or part of a procurement. If the demand for the drug is high and a single supplier is not able to supply an adequate quantity for the whole procurement, it may be divided into smaller procurements by regions or socio-economic areas;

Example: Drug A is on the List of drugs for national-level concentrated procurement and the demand for drug A is 100 million tablets per year. No supplier is able to supply this drug with such quantity. Thus is may be divided into smaller procurements:

+ It may be divided into 03 smaller procurements for 03 regions: Procurement 1 for health facilities in the North: 40 million tablets; Procurement 2 for health facilities in the Central Coast: 20 million tablets; Procurement 3 for health facilities in the South: 40 million tablets;

+ It may be divided into 06 smaller procurements for 06 socio-economic areas: Red River Delta, the Northern Highlands, the North Central Coast, the Central Highlands, the Southeast, and Mekong Delta.

-The unit in charge of national-level concentrated drug procurement is responsible for dividing the procurement.The division drug categories in the procurements and contents of contractor selection plans shall comply with Article 5 and Article 6 of this Circular.

b) Appraising contractor selection plan:

- The unit in charge of national-level concentrated drug procurement shall submit the contractor selection plan to the unit appointed by the Minister of Health to appraise contractor selection plans;

- The appraising unit shall appraise the list, quantity of procurements, unit prices, and drug quantities; consult with Drug Procurement Consultancy Council (if necessary) before submitting the contractor selection plan to the Minister of Health for approval.

c) Approving the contractor selection plan: the Minister of Health shall consider approving the contractor selection plan at the request of the appraising unit.

3. Preparation for contractor selection:

According to the contractor selection plan approved by the Minister of Health, the unit in charge of national-level concentrated drug procurement shall prepare the bidding documents and organize bid evaluation in accordance with Article 18 through 20 of this Circular.

4. Organization of contractor selection:

The unit in charge of national-level concentrated drug procurement shall organize the contractor selection, bid evaluation, negotiation of contracts or framework agreement; propose successful bidders; and report the contractor selection result in accordance with Article 21 through 24 of this Circular.

5. Verifying, approving, and publishing contractor selection result:

a) In consideration of the result of bid evaluation and negotiation of contracts or framework agreement with contractors, the unit in charge of national-level concentrated drug procurement shall verify and approve and contractor selection result. It may be necessary to consult with Drug Procurement Consultancy Council before approving the contractor selection result;

b) The unit in charge of national-level concentrated drug procurement shall publish the contractor selection result in accordance with the Law on Bidding.

6. Completing, concluding contracts or framework agreement:

a) The unit in charge of national-level concentrated drug procurement shall complete and conclude contracts or framework agreement with selected contractors in accordance with the Law on Bidding; publish the framework agreement on the website of the Ministry of Health, and send written notifications to health facilities under the management of the Ministry of Health, other regulatory bodies, and 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 health facilities regulated by the framework agreement.

7. Completing, 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 unit in charge of concentrated procurement (for direct contract conclusion); 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 unit in charge of national-level concentrated drug procurement.

8. Payment: The unit in charge of concentrated procurement (for direct contract conclusion); health facilities shall pay the contractors in accordance with regulations of law and terms of the concluded contracts.

9. Supervising, regulating the implementation of the framework agreement:

The unit in charge of national-level concentrated drug procurement and units in charge of consolidating drug use plans shall supervise and regulate the supply of drugs for health facilities regulated by the framework agreement under the approved plan. To be specific:

a) Health facilities under the management of the Ministry of Health and units making drug use plans shall submit periodic (quarterly or annual) or irregular reports on the quantity of drugs supplied and yet to be supplied to the unit in charge of national-level concentrated drug procurement for update on the website of the Ministry of Health;

b) Health facilities under the management of local governments and central health facilities participating in local drug procurements shall submit periodic (quarterly or annual) or irregular reports on the quantity of drugs supplied and yet to be supplied to Provincial Departments of Health, which will send them to the unit in charge of national-level concentrated drug procurement for update on the website of the Ministry of Health;

Article 33. Organizing local-level concentrated drug procurement

1. Surveying demands for drugs:

a) According to the List of drugs for local-level concentrated procurement, health facilities under the management of provincial governments (including central health facilities participating in local-level concentrated drug procurements) shall survey demands for drugs in accordance with Article 3 of this Circular and send the results to units in charge of local-level concentrated drug procurement;

b) The Lists and quantities of drugs shall sent to units in charge of local-level concentrated drug procurement before the 15^thof August or another deadline specified by the units in charge of local-level concentrated drug procurement;

c) The unit in charge of local-level concentrated drug procurement shall aggregate the demands for drugs of local health facilities and submit a report to the Provincial Department of Health for verification and submission to President of the People’s Committee of the province for approval.

2. Making, verifying, and approving the contractor selection plan:

a) Making contractor selection plan:

- In consideration of the demand for drugs by quantities and categories, the unit in charge of local-level concentrated drug procurement shall set up procurements and prepare the contractor selection plan ensuring that each drug in each category is a part of the procurement, and the categorization of drugs in the procurements and the contractor selection plan content comply with Article 5 and Article 6 of this Circular.

- Propose a ratio (%) of additional purchase not exceeding 30% in the contractor selection plan. The ratio shall be specified in the bidding documents for each drug. In this case, the unit in charge of local-level concentrated drug procurement shall make an announcement and include the ratio in the framework agreement. Health facilities may purchase more if the registered quantity of drugs are used up, but the additional purchase must not exceed the ratio specified in the contractor selection plan.

b) Provincial Departments of Health shall organize the appraisal of contractor selection plans and submit them for Presidents of the People’s Committees of provinces for approval;

c) Approving the contractor selection plan: the President of the People’s Committee of the province shall consider approving the contractor selection plan at the request of the Provincial Department of Health.

3. Preparation for contractor selection:

According to the contractor selection plan approved by the Minister of Health, the unit in charge of local-level concentrated drug procurement shall prepare the bidding documents and submit them to the Provincial Department of Health for approval in accordance with Article 18 through 20 of this Circular.

4. Organization of contractor selection:

The unit in charge of local-level concentrated drug procurement shall organize the contractor selection, bid evaluation, negotiation of contracts, and propose successful bidders in accordance with Article 21 through 24 of this Circular.

5. Verifying, approving, and publishing contractor selection result:

a) The unit in charge of local-level concentrated drug procurement shall submit the contractor selection result to the Provincial Department of Health for verification and approval;

b) The Provincial Department of Health shall verify and approve the contractor selection result;

c) The unit in charge of local-level concentrated drug procurement shall publish the contractor selection result in accordance with the Law on Bidding.

6. Completing, concluding framework agreement:

a) According to the contractor selection result, the unit in charge of local-level concentrated drug procurement shall complete and conclude a framework agreement with contractors in accordance with the Law on Bidding;

b) The unit in charge of local-level concentrated drug procurement shall publish the concluded framework agreement in accordance with the Law on Bidding on the websites of the People’s Committee of the province and Provincial Department of Health, and send notifications to health facilities regulated by such framework agreement.

7. Drug supply contracts shall be completed and concluded in accordance with Clause 7 Article 32 of this Circular.

8. Payments for drug supply contracts shall be made in accordance with Clause 8 Article 32 of this Circular.

9. Supervising, regulating the implementation of the framework agreement:

a) The unit in charge of local-level concentrated drug procurement shall supervise and regulate the implementation of the framework agreement and drug supply contracts between health facilities and selected contractors; update the quantity of drugs supplied and yet to be supplied on the websites of the People’s Committee of the province and Provincial Department of Health;

b) Health facilities shall submit periodic (quarterly or annual) or irregular reports on the quantity of drugs supplied and yet to be supplied to the unit in charge of local-level concentrated drug procurement for supervision and update on the websites of the People’s Committee of the province and the Provincial Department of Health.

Article 34. Organizing price negotiation

1. Surveying demands for drugs:

The survey and appraisal of demands for drugs on the List of drugs for procurement through price negotiation are similar to those of the List of drugs for national-level concentrated procurement specified in Clause 1 Article 32 of this Circular.

2. Formulating drug price negotiation plan:

The unit in charge of national-level concentrated drug procurement shall formulate the price negotiation plan and send it to a unit appointed by the Minister of Health to appraise the price negotiation plan. Content of the price negotiation plan:

a) Demands for drugs with specific categories and quantities;

b) Requirements in terms of quality, packaging, storage, delivery time and location; estimated maximum price with certain quantities and conditions of each drug under price negotiation;

c) A list of contractors including manufacturers and suppliers having registration numbers of drugs on the list of drugs for price negotiation and their supplying capacity;

d) Plan and time for price negotiation with each bidder participating in the negotiation;

dd) Information about prices, economic-technical criteria to be applied during the negotiation process that has to be provided by bidders in their quotations, such as:

- Selling prices for health facilities in manufacturing countries and ASEAN countries provided by bidders;

- Selling prices for drugs with similar qualities and therapeutic effects in Vietnam;

- Bidders’ commitments to quantity and quality of drugs supplied, and supply schedule if awarded the contract;

- Data for economic analysis of new drugs on the List of drugs for procurement through price negotiation, including: cost – efficacy, cost – benefits, and cost – effects provided by bidders.

3. The Minister of Health shall consider approving the price negotiation plan in consideration of the report submitted by the appraising unit.Where necessary,the Minister of HealthshallconsultwithDrug Procurement Consultancy Councilbefore approving.

4. Organizing price negotiation:

a) According to the price negotiation plan approved by the Minister of Health, the unit in charge of national-level concentrated drug procurement shall assist the Drug Price Negotiation Council in organizing the plan implementation. To be specific:

- Preparing the request for proposals which contains sufficient information about the drug under negotiation; instructions on preparation and submission of approvals; required capacity and experience of bidders; criteria for technical and financial evaluation. The request for proposals shall be appraised and approved in accordance with Article 18 through 20 of this Circular;

- The invitation to negotiation shall be sent to bidders (manufacturers and suppliers) enclosed with the request for proposals. The invitation shall specify the location, time, and information about the drug under negotiation specified in Point b Clause 2 of this Article;

- Receive proposals from bidders by post or directly. Each bidder may submit only one proposal. The proposals shall not be publicly opened. The unit in charge of national-level concentrated drug procurement shall protect the confidentiality of information in the proposals;

- Proposal evaluation: the Drug Price Negotiation Council shall organize the evaluation of technical proposals according to the criteria specified in the request for proposals. Bidders having valid proposals, satisfying capacity and experience requirements, and receiving satisfactory technical mark as stipulated in the request for proposals shall be considered qualified; the Drug Price Negotiation Council shall evaluate financial proposals and rank the bidders.

b) The Drug Price Negotiation Council shall negotiate with each supplier. The Drug Price Negotiation Council shall decide whether to choose carry out the negotiations directly or by correspondence, and only negotiate with ranked bidders to find the bidder that satisfies requirements in terms of quality, quantity, storage conditions, delivery, and other requirements related to technology, quality, and bids.

The Drug Price Negotiation Council shall consider inviting the manufacturer to the negotiation.

c) The successful bid shall be agreed by the Council and the supplier based on the price specified in the negotiation plan approved by a competent authority. The following information may be taken into account where necessary:

- Selling prices for health facilities in the manufacturing country or some ASEAN countries provided by bidders;

- Selling prices for health facilities, drug traders, or successful bids applied in Vietnam.

d) Where more than one supplier participate in the price negotiation, 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 supplier whose new bid is lowest and which does not exceed the declared or re-declared wholesaling price shall be awarded the contract.

5. Verifying and approving the price negotiation result: the unit in charge of national-level concentrated drug procurement shall consolidate the price negotiation result and send it to a unit appointed by the Ministry of Health to verify the result. The Minister of Health shall consider approving the price negotiation result based on the report submitted by the verifying unit.

6. The unit in charge of national-level concentrated drug procurement shall publish the result of contractor selection through price negotiation as prescribed by law.

7. Completing, concluding framework agreement and drug purchase contract:

a) The unit in charge of national-level concentrated drug procurement shall complete and conclude the framework agreement with selected contractors and publish contractor selection result and the framework agreement on the website of the Ministry of Health, and send notifications to focal units to survey demands;

b) According to the price negotiation result and the framework agreement, the demand and drug use plans, a contract shall be signed with the contractor in which the price does not exceed the successful bid and the framework agreement published by the unit in charge of national-level concentrated drug procurement.

8. Health facilities shall pay for the contracts in accordance with law and provisions of the contracts concluded.

9. The unit in charge of national-level concentrated drug procurement shall supervise and regulate the provision of drugs selected through price negotiation similarly to drugs for concentrated procurement; the quantity of drugs supplied and yet to be supplied shall be periodically updated on the website of the Ministry of Health.

Chapter IV

IMPLEMENTATIONPROVISIONS

Article 35. Handling situations during contractor selection process

1. Wherethebidsaftercorrection oferrorsandadjustment of deviation minus discounts (if any) of all bidders who satisfy technical requirements and are on the list of ranked bidders exceed the price for the approved part in the procurement, there are the following options:

a) If the price in the approved contractor selection plan is considered reasonable, bidders shall be requested to submit offer new prices as prescribed 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 procurement value to the competent person.

c) If adequate supply of drugs is necessary to serve medical examination and treatment, the head of the health facility may select a drug according to bidders’ rankings when all of the following conditions are satisfied:

- The successful bid does not exceed the effective declared or re-declared wholesaling price of the drug;

- The total value of selected drugs of the parts for which bids are submitted for does not exceed the total value of those parts in the contractor selection plan approved by a competent authority.

2. If a procurement 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 to the drug supply schedule.

3. Where any drug in a procurement 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. In the new plan, drugs for which bids are not submitted or no bidders for which are successful shall moved into other procurements. The contractor selection for the parts participated by bidders who satisfy technical requirements shall be carried on in accordance with the approved plan.

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 investor may consider allowing the bidder to supply the substitute drug. To be specific

a) The name of the drug or the factory is changed during its sale but the registration number or import license number remains unchanged;

b) The registration number is changed because of renewal of registration or a new import license is issued but other information remains unchanged (name of drug, manufacturer, quality standards, shelf life, category).

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 bodies (if any), sample of the label or package insert bearing the seal of the licensing authority, and explanation for the unchanged quality standards of the offered drug and substitute drug.

5. Private health facilities may participate in concentrated 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 concentrated local bidding as if health facilities under the management of local governments. Provincial Departments of Health and units in charge of local-level concentrated drug procurement shall organize biddings for supply of drugs for private health facilities as if they are health facilities under the management of local governments.

Ifa private health facility does not organize contractor selection as prescribed in this Circular, the social insurance authority shall only pay according to the result of local or national contractor selection or price negotiation result if the trade name, registration number or import license number, content/concentration, route of administration, dosage form, 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.

6. Where a health facility wishes to use a drug on the List of drugs for concentrated procurement or List of drugs for procurement through price negotiation but a framework agreement is yet to be concluded, or a supply contract has been concluded but the selected bidders is not able to supply drugs because of a force majeure event, such health facility may hold a bidding in accordance with this Circular, provided the drug quantity does not exceed the demand for 12 months and provisions of Clause 5 through 7 Article 38 of this Circular are complied with.

Article 36. Reporting bidding result

1. After the contractor selection result is approved, the head of the health facility shall report it to the agency that approved the contractor selection plan.

2. Hospitals and institutions providing inpatient treatment affiliated to the Ministry of Health, health facilities of other sector, and Provincial Departments of Health shall send contractor selection results using Form in Appendix 01 enclosed herewith to the Ministry of Health. The results shall be posted on the websites of the Ministry of Health, Drug Administration of Vietnam, Traditional Medicine Administration of Vietnam as the basis for pricing according to plan. To be specific:

- Finance – Planning Department: all procurements;

- Drug Administration of Vietnam: procurements of generic drugs, original brand name drugs or equivalent drugs, traditional drugs, herbal drugs;

- Traditional Medicine Administration of Vietnam: procurements of herbal ingredients, traditional ingredients.

Reports shall be sent by post and email (to [email protected] for all procurements; to [email protected] for procurements of generic drugs, original brand name drugs or equivalent drugs, traditional drugs, herbal drugs; to [email protected] for procurements of herbal ingredients, traditional ingredients).

3. Every year before the 31^stof October, health authorities, hospitals and institutions providing inpatient treatment affiliated to the Ministry of Health, and Provincial Departments of Health shall prepare and send reports on violations committed by bidders during bidding for procurement of drugs by local health facilities in the previous period (Appendix 02 enclosed herewith) to the Ministry of Health (Finance – Planning Department for all procurements; Drug Administration of Vietnam for procurements of generic drugs, original brand name drugs or equivalent drugs, traditional drugs, herbal drugs; Traditional Medicine Administration of Vietnam for  procurements of herbal ingredients, traditional ingredients). The reports shall be the basis for bidder evaluation in the next period.

Article 37. Expenses and document retention

1. Expenses incurred during the process of contractor selection shall comply with Article 9 of 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.

Article 38. Effect

1. This Circular takes effect on July 01, 2016.

2. The following documents are annulled from the effective date of this Circular:

a) Joint Circular No. 01/2012/TTLT-BYT-BTC dated January 19, 2012 of the Ministry of Health and the Ministry of Finance providing guidance on bidding for procurement of drugs by health facilities;

b) Joint Circular No. 36/2013/TTLT-BYT-BTC dated November 11, 2013 of the Ministry of Health and the Ministry of Finance on amendments to Joint Circular No. 01/2012/TTLT-BYT-BTC dated January 19, 2012 of the Ministry of Health and the Ministry of Finance providing guidance on bidding for procurement of drugs by health facilities;

c) Joint Circular No. 37/2013/TT-BYT dated November 11, 2013 of the Minister of Health providing guidance on preparing bidding documents for procurement of drugs by health facilities;

d) Joint Circular No. 31/2014/TT-BYT dated September 26, 2014 of the Minister of Health providing Criteria for technical evaluation in bidding documents for procurement of drugs.

3. Joint Circular No. 01/2012/TTLT-BYT-BTC, Joint Circular No. 36/2013/TTLT-BYT-BTC, Circular No. 37/2013/TT-BYT, and Circular No. 31/2014/TT-BYT shall apply to bidding documents and requests for proposals that are issued before the effective date of this Circular .

4. Regarding any contractor selection plan that is approved before the effective date of this Circular but is not conformable with this Circular and the bidding documents/request for proposals is yet to be issued, adjustments to such plan shall be submitted to a competent authority specified in Article 9 of this Circular for approval.

5. A health facility shall not carry out selection of contractor for supply of drugs on the national-level concentrated procurement list or local-level concentrated procurement list or price negotiation list if the contractor selection result is already available on the date of issuance of the bidding documents and a framework agreement has been published, except for the case in Clause 7 Article 35 of this Circular. If such health facility still carries out contractor selection and signs a contract with another contractor, the contract shall not be paid for.

6. A unit in charge of local-level concentrated drug procurement shall not carry out selection of contractor for supply of drugs on the national-level concentrated procurement list or price negotiation list if the contractor selection result is already available on the date of issuance of the bidding documents and a framework agreement has been published on the website of the Ministry of Health.

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

Article 39. Reference clause

Where any of the documents referred to in this Circular is replaced or amended, the newest document shall apply.

Article 40. Implementationprovisions

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

a) List of member states of EMA, ICH, PIC/s; list of drug manufacturers satisfying EU-GMP, PIC/s-GMP requirements; list of drug manufacturers satisfying WHO-GMP requirements and granted certificates by the Ministry of Health of Vietnam; list of facilities processing herbal ingredients inspected by the Ministry of Health of Vietnam;

b) List of original brand name drugs, equivalent drugs, drugs having documents proving bioequivalence; List of drugs manufactured by manufacturers satisfying WHO-GMP requirements granted certificates by the Ministry of Health of Vietnam and granted certificates of free sales by state members of ICH; List of drugs manufactured in Vietnam satisfying treatment, pricing, and supply requirements;

c) List of drugs granted registration numbers or import licenses; road map for technology transfer of drugs processed in Vietnam; List of drugs and manufacturers, suppliers violating regulations on quality, bidding, or drug supply; data about declared/re-declared drug prices; successful bids; List of drugs derived from ingredients (active ingredients) manufactured in Australia and member states of ICH, ingredients (active ingredients) granted CEP certificates; list of enterprises having drugstore chains adopting Good Pharmacy Practice (GPP), list of enterprises having drug distribution centers;

d) List of selected herbal ingredients and prices thereof;

dd) List of drugs for which bidding is mandatory; List of drugs for national and local-level concentrated procurement; list of drugs eligible for price negotiation;

e) Carry out annual prequalification to compile a list of capable, experienced, and reputable drug manufacturers and suppliers to be invited to selective bidding.

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

3. President of the People’s Committees of each province shall:

a) Appoint a unit in charge of local-level concentrated drug procurement for health facilities participated in concentrated procurement locally in accordance with this Circular;

b) 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 List of drugs for local-level concentrated procurement for use at local health facilities at the request of the Director of the Provincial Department of Health.

4. 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 bids and verifying contractor selection result.

Any participant s opinion that is different from that of the others shall be specified in the report.

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

The Deputy Minister

Pham Le Tuan