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Exchange rate fluctuation influences pharmaceutical companies

In Uncategorized on December 16, 2010 at 9:59 am

Due to the big fluctuations in exchange rates, many domestic pharmaceutical enterprises are in despairs because they cannot import materials and an adjuvant, a pharmacological or immunological agent that modifies the effect of other agents.

Employees are packaging drugs at the Pharmaceuticals and Medicinal Laboratories (Photo: SGGP)

Some production contracts might be cancelled or some pharmaceutical companies have to pay fines for the delays in production. Furthermore, Vietnam would face the risk of a shortage of medications.


Being one of the biggest pharmaceutical companies in the country, Vietnam Medical Products Import-Export Joint Stock Company (VIMEDIMEX) in Ho Chi Minh City, were extremely concerned about the high exchange rates and the soaring prices of imported materials.


The company’s general manager, Nguyen Tien Hung, said the company has stopped production of rutin-extraction, from Vietnamese flower bud of Sophora Japomica L (Hoe buds). This is because it takes US$50 to make one kilogram of the rutin ingredient, but sells at only US$12 in the marketplace.


Mr. Hung said one kilogram of the flower sold at VND25, 000 last year, but now it has soared by over VND200, 000 per kilogram and crocus has increased from VND9, 000 to VND100, 000 a kilogram this year. For years, VIMEDIMEX has focused on growing herbs, but has failed to satisfy home demand.


Due to high prices of saffron, these companies use the curcumin extract from the herb. This is causing distress to the medical companies, as they may force to pay a compensation fee, if they did not complete the contract on time.


According to the Ministry of Health, Vietnam has three factories to make antibiotic materials, but only Mekophar Chemical Pharmaceutical Joint Stock Company is still in production. Furthermore, the company directors are considering fewer contracts and are negotiating with its partners about the prices.


Moreover, imported materials from China, India and some countries in Europe, have quadrupled during the year.


Truong Duc Vong, director of the OPC Pharmaceutical JSC has, said he has just sent a petition to the city’s Department of Health (DOH) to raise some prices of the medications. While other pharmaceutical companies have now followed suit.


In addition, certain medical enterprises now face difficulties buying foreign currencies. They purchase at even higher prices or sometimes purchase imported materials from the ‘black market’.


The Boston Pharma JSC’s general manager said it needs to encourage consumption of local-made medications in the aid to reduce pressures for local enterprises.


Boston Pharma management said at a meeting, DOH should resolve registration formalities and other bureaucratic red tape as well as lead medical staffs to pharmaceutical factories to see technologies to make drugs in order to make them believe in home methodologies.


Many companies have filed a petition for preferential policies to special goods, to cease the drugs protective policies and to enforce strictly the anti-dumping law.

Source: SGGP

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