Korean Economy News
Korea’s drug exports to Vietnam face hurdle

By Shin Chan-ok and Cho Jeehyun

South Korea’s pharmaceutical industry is facing fresh challenges in exporting medicines and vaccines to Vietnam due to the introduction of new bidding regulations that would cut the grade of Korean products and give disadvantages in public bidding.

According to the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) on Monday, the Vietnamese government recently changed its bidding rules for imported pharmaceutical products, based on which only GMP-certified drugs recognized in Europe, America and Japan are awarded Grade 1 or 2. The new rules that will go into effect in July would no longer accept GMP certification from PIC/S member countries that include Korea. The change could lower the status of Korean bidders to the Grade 6 group from the current Grade 2.

GMP is short for good manufacturing practices and the PIC/S for Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme. The Vietnamese government uses a bidding grade system for imported drugs with both certifications applied as evaluation criteria for grading foreign drug suppliers. The higher the grade, the more advantages the vendors will have in public bidding.

As of the end of last year, Korean pharmaceutical companies exported nearly 200 billion won ($186.7 million) worth of drugs to the Southeast Asian country. But under the new rules, Korea could lose as much as 80 percent of its annual drug exports to Vietnam, said a pharmaceutical industry official.

The Korean government and the KPBMA are coming up with countermeasures while sending a letter of opinion to the Vietnamese government. The letter argues that Korea’s direct investment into Vietnam is significant and Korean pharmaceutical products are manufactured under a high-quality assurance system, which is enough to justify Korea’s current bidding grade.

Korea joined the PIC/S in 2014 and the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) in 2016 that brings together regulatory authorities and pharma industry experts from advanced countries to frame and regulate the technical and scientific aspects of pharmaceutical product registration.

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