After a
month of exhaustive coverage of the vaccine scandal in China, the facts of the
story have crystallized as have theories about how nearly $90 million worth of
expired or improperly stored doses could have reached consumers. But little
attention has been paid to Vietnam where a similar scandal is unfolding, albeit
on a smaller scale.
In China,
blame has been placed on the country's fragmented vaccine supply chain. In
particular, criticism has been leveled at the lack of regulation of cold chain
distribution, leading to vaccines routinely being stored below or above the
optimal temperature range of 2-8 C. Some commentators add that the Chinese
Communist Party leadership deserves criticism for choosing to invest in an
increasingly draconian security and censorship infrastructure but neglecting
regulatory agencies such as the woefully understaffed China Food and Drug
Administration.
In
Vietnam, parents have been putting off vaccinations for infants following the
deaths of 20 babies over the last four years linked by the media to the 5-in-1
Quinvaaxem vaccine, manufactured in South Korea and distributed in Vietnam by
Berna Biotech Korea as part of Vietnam's National Immunization Program.
Hong Kong’s Zuellig
Pharma provides cold-chain storage in Vietnam
but a
thermometreprovided to a HCMC pharmacy shows the temperature inside reaching a
steamy 30C.
Like
other vaccines distributed through the program, Quinvaaxem is free to patients,
but parents across the country have either decided to let their children go
without it, potentially exposing them to diphtheria, tetanus, pertussis,
hepatitis B and Haemophilus influenzae type b, or pay $24 per dose for
Pentaxim, an alternative manufactured by France's Sanofi Pasteur.
As in
China, a lack of cold chain facilities has been cited as a key reason for
spoilage of the Quinvaaxem vaccine. The World Health Organization has tested
Quinvaaxem and proclaimed it safe, implying that whatever dangers arise from
its use occur between its South Korean production site and the administration
of the vaccine.
Moreover,
as noted by Vincent Goulard, managing director of IPS Vietnam, a pharmaceutical
consultancy, cold chain storage is almost nonexistent except for facilities run
by international companies such as DKSH Vietnam and Zuellig Pharma. However,
these foreign companies do not handle government vaccines, which are controlled
by the Ministry of Health and public hospitals. It is not unusual, in domestic
supply chain practice, to see drugs sitting on the pavement, negating the
benefits of cold storage in public hospitals and clinics.
As in
China, Vietnam's vaccine troubles are taking place against a background of
systemic healthcare problems. The country's healthcare system is characterized
by overburdened hospitals, a lack of public trust in domestically made drugs
and a fragmented pharmaceutical supply chain that shields irresponsible
suppliers from supervision.
Some see
this neglect of the healthcare system by the Vietnamese Communist Party as a
political choice, similar to the one that has held back the development of
China's healthcare system; in both countries, economic growth and the
protection of party interests have taken precedence over healthcare system
development. In this context, the problems will get worse before they get
better.
Similar situation
It is
easy enough to draw a public health analogy between China and Vietnam. Both
have focused policymaking on economic development at the expense of social
services and have allowed political cronyism and corruption to dominate the government
apparatus, leading to eerily similar results in the healthcare industry.
Both
countries' leaders are facing politically damaging vaccine scandals and a
further erosion of public trust in domestic drug manufacturers and suppliers.
The public cannot be faulted for questioning the safety of vaccines in
countries that have 21st century economic ambitions but have neglected to
upgrade their mid-20th century healthcare infrastructure.
For
foreign pharmaceutical companies, Vietnam's ability to prioritize the
strengthening of its healthcare delivery system and its drug and vaccine supply
chains will be critical to their long-term success. Vietnam is one of the last
places where pharmaceutical market growth is projected to remain in double-digits
over the medium term, a prospect that will be solidified once the Trans-Pacific
Partnership, the wide-ranging trade agreement between Vietnam, the U.S. and 10
other countries, has been ratified.
With a
young population and with operating rights for foreign pharmaceutical companies
still newly granted, Vietnam's pharmaceutical market is only beginning to take
off. Virtually all its problems mirror those of China 15 years ago, when
foreign companies enjoyed preferential treatment in the tendering process, the
population was still relatively young and the middle class was quickly
expanding.
Foreign
pharmaceutical companies went wrong in China by chasing profits rather than
pursuing global-standard sales practices. Companies and Chinese hospitals
focused on increasing profits from drug sales while the government turned a
blind eye to the failing healthcare system. Against this backdrop, all the
problems of the healthcare system were projected onto foreign companies, making
them easy political targets.
A series
of hardline government inquiries into pharmaceutical companies began in the
summer of 2013 when several executives of U.K. group GlaxoSmithKline were
arrested on charges of bribing doctors to prescribe certain drugs. The move was
widely praised by the Chinese public, but condemned by the foreign business
community and foreign press. Several GSK executives were convicted in 2014.
By 2015,
growth projections for foreign pharmaceutical companies operating in China had
been significantly revised amid swelling fines doled out by local regulators
and the risk of anti-corruption penalties in jurisdictions such as the U.S. and
the U.K.
Whether
the future of foreign companies in Vietnam will mirror the fate of those in
China may depend not on the two markets' similarities, but on one key
difference: Unlike China, Vietnam is heavily dependent on imported raw
materials to manufacture drugs and vaccines.
This
dependence makes it more accountable to foreign healthcare organizations than
China is. Consequently, the international community may be able to put pressure
on Vietnam to prioritize its cold chain vaccine practices and to invest in its
broken healthcare system. If foreign companies feel unable to do this, the job
should be given to diplomats who have access to Vietnam's decision-makers.
The need
for healthcare diplomacy must be taken seriously. The international community
must use a combination of pressure and aid to assist Vietnam in speeding up the
development of cold chain capacity and healthcare system reform. Otherwise,
foreign pharmaceutical companies, lumped in with other corrupting influences
that have made healthcare inaccessible to most, will acquire an insurmountable
reputation as corruptors in the minds of Vietnam's citizens.
In the
wake of TPP, there is a real risk that concessions won by foreign
pharmaceutical companies -- the elimination of import taxes and a more level
playing field in bidding against domestic drug manufacturers for public tenders
-- will become politically toxic.
That
might make the concessions ineffective in practice, even if they remain in
force on paper. Companies from the U.S., U.K. and Japan are providing good,
safe products, but rising foreign pharmaceutical profits in the face of
ever-worsening drug and vaccine access for Vietnamese citizens would leave a
sour taste in the mouths of many.
Such an
outcome could potentially derail the sales operations of pharmaceutical
companies in Vietnam more quickly than was recently witnessed in China. On the
other hand, the government's susceptibility to foreign lobbying creates the
potential to save foreign companies from the fate that befell them in China.
Which of
these outcomes occurs depends on the willingness of Vietnam's international
allies to push for immediate reforms in the healthcare system and the
pharmaceutical supply chain.
Damjan
DeNoble
