Vietnam study finds bribes dominate medicine prices

By Ben Hirschler
LONDON | Tue Feb 28, 2012

LONDON (Reuters) - How to measure medical corruption? Tuan Anh Nguyen, a researcher at Hanoi University of Pharmacy, believes informal payments to doctors are "a dominant factor" in high prices of the older off-patent drugs that make up the lion's share of prescriptions in many emerging markets.

After interviewing doctors, pharmaceutical companies, government officials and pharmacists in both the private and state hospital sectors, he concluded in a study published last year that around 40 percent of the drugs' price in Vietnam is typically spent on offering financial inducements to doctors.

"When I talk to colleagues in some other Asian countries they say the situation is the same," he told Reuters.

His investigation broke down the different legal and illegal components that contribute to the cost of drugs in Vietnam, and found 40 to 60 percent of the final price could be spent to induce prescribers to use particular medicines, and to persuade procurement officers inside hospitals to buy them. The biggest share went to doctors.

Nguyen said the problem was worse with generic medicines sold by Asian companies, although his study did not name any firms. In Vietnam the price of these is sometimes even higher than that of the original branded product, in order to recoup payments made to doctors by drug companies trading these medicines.

But Western drug firms are not immune: pharmaceutical company representatives who spoke to Nguyen reported that doctors typically expect a commission of about 15 percent from European drug makers; the figure they look for from Asian producers is nearer 40 percent.

The study, which was presented at the International Conference for Improving Medicines in Antalya, Turkey, last October, found multinational companies tend to prohibit bribes, officially at least, although pressure to achieve sales targets often means representatives ignore this and give money to prescribers.

At other times, multinationals pay for one-off benefits like luxury holidays that would be prohibited under anti-kickback rules adopted by the drug industry in the United States.

Doctors surveyed said they took the cash and non-cash offers to make up for low salaries, and it was common for commissions from the pharmaceutical industry to become the main source of income for some physicians, leaving those reputable doctors who are determined to stay "clean" out in the cold.

It's a situation one foreign drug salesman says has turned the system upside down: "Now, the worse the doctors, the more money they have. It's ridiculous."