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The EU-Vietnam FTA: a triumph in putting patients first

Jan Rask Christensen PG

The recently published text of the FTA between Vietnam and the EU brings a number of benefits to Vietnamese patients and to the innovative pharmaceutical industry. This positive outcome for the pharmaceutical industry has to a large extent been enabled through close cooperation between EFPIA and the local trade association in Vietnam, Pharma Group.

The EU-Vietnam FTA text is now published and has the potential to propel Vietnam forward on a number of fronts. Whilst the details of the agreement are still being analysed, it would seem that a number of commitments from the Vietnamese Government go a long way towards improving patients’ access to innovative medicines, whilst providing international companies with a stronger legal framework for their operations.

In particular, it should be noted that Vietnamese patients would enjoy faster and more sustainable access to new, innovative medicines because the local clinical trial requirement will be lifted and administrative procedures shortened. At the same time, gradual access for foreign companies to government procurement – which represents roughly 50% of the Vietnamese market – through competitive bidding, will enable Vietnamese patients to have greater access to high-quality, life-saving medicines.

Furthermore, the reiteration of Vietnam’s WTO commitment to provide foreign pharmaceutical companies with the right to establish Foreign Invested Enterprises – a commitment which was supposed to have been implemented since 2009 (!) – will be of great importance in providing companies with the legal clarity needed to establish themselves in the Vietnamese market.

The EU-Vietnam FTA seems to have gone even further by securing additional rights (including the right to provide medical information and build their own warehouses) for pharmaceutical companies, which will help ensure the viability of the innovative pharma industry’s exports to Vietnam. Today, pharmaceutical exports represent almost 10% of the total value of European exports to Vietnam.

However, the real challenge now lies in the implementation – as we saw with Vietnam’s WTO commitments – and it will be very interesting to see to what extent Vietnam will include the agreed provisions in the current revisions to the Pharmaceutical Law and the Tender Circular (which governs public procurement), both of which should be finalised this year. Additional work between the Government authorities and Pharma Group will also be required to move forward in those areas not addressed in the EU-Vietnam FTA. This includes further improvement of the distribution rights and additional access to Government Procurement.

These points will be important for Vietnam in order to fully benefit from the opportunities created by the EU-Vietnam FTA. The recent conclusion of both the TPP and EU-Vietnam FTA enables Vietnam to distinguish itself from other ASEAN countries, which is particularly important as the regional quest to attract FDI continues and intensifies with the recent entry into force of the ASEAN Economic Community.

In conclusion, the successful outcomes of the EU-Vietnam FTA is first and foremost due to the Vietnamese Government’s willingness to put patients first, which has been realized through the hard work and dedication of the EU FTA negotiators. Another important factor is the fruitful cooperation between EFPIA and Pharma Group Vietnam and their coordinated advocacy efforts and continuous dialogue and sharing of relevant information to the authorities on both sides. In this regard, the synergy between the two sister associations has been tremendously helpful in achieving a positive outcome of the FTA bringing improved conditions for pharmaceutical companies and benefits for patients, and should be considered a best in class example to be applied in future trade negotiations.

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