A pharmaceutical company has been selling two kinds of its imported nutritional supplements at exorbitant prices and granting high commissions to hospitals, doctors, and drug stores to increase the products’ presence in prescriptions.
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Many doctors have prescribed their patients to use the Alipas and Angela ginseng, which are supplements imported by Hanoi-based Eco Pharmaceutical JSC, although nutritional supplements are banned from being included in prescriptions by the Ministry of Health.
According to files obtained by Tuoi Tre, on November 8, 2011, and May 18, 2012, Eco imported a total of 55,000 boxes of Angela (60 pills each) at US$9.60 a box.
The two shipments were worth VND10.99 billion, or $528,000, and VND13.9 billion ($667,200) with VAT included.
However, the market price of the product is VND570,000 a box, or $27.30. This means the company pocketed an enormous VND17.44 billion, or more than $837,000, profit from the disparity between the import and sale prices.
Similarly, Eco imported 80,000 bottles of Alipas at $9.50 per item and sold them at $26.88, raking in VND44.8 billion from the price difference.
Besides running ads in the media, Eco also implemented its ‘lobby policy,’ to spread the products to a number of hospitals and drug stores by promising huge commissions.
The policy has proven to be effective as its sales of Angela and Alipas products in the first half of this year were some VND20 – 40 billion a month.
If a hospital accepts to buy the Alipas nutritional supplement, Eco will pay the buyer 5 percent of the contract value, and any doctor who includes either product in their prescription will receive VND100,000 for each bottle.
Drug stores will also receive VND15,000 for each prescription including Eco’s products, and doctors at private clinics will receive commission worth VND100,000 for each bottle of Alipas they give patients.
Tuoi Tre also obtained a document from Eco mentioning a proposal to pay VND5 million to a hospital in the Mekong Delta city of Can Tho after the company won a tender contract to supply the said nutritional supplements for the hospital.
In talking with Tuoi Tre, Eco CEO Ngo Chi Dung said the 25 percent VAT and import duties, plus the costly selling and administrative costs, have forced the company to sell Angela and Alipas at exorbitant prices.
Dung said the products are imported from the US, and such sale prices are not too expensive as they are of good quality.
The products are sold without a doctor prescription required, and most customers choose them thanks to advertisement, he added.
“Only a small proportion of the products are sold at health facilities, and our company doesn’t have any policy to grant commissions to doctors,” he said.
“We only sponsor conferences, scientific seminars, and documents for doctors.”
Asked about the document to approve the ‘lobby spending,’ Dung said he had not signed any document.
When asked if he wanted to see the documents obtained by Tuoi Tre that have his signature, Dung refused.
Meanwhile, many doctors who included the supplements in their prescriptions said they did not do so because of the money granted by Eco.
Dr. Truong Van Can, who works at the Hue Central Hospital, said he did prescribe Alipas to patients, but not on a regular basis.
He said, “[Alipas] is a necessary drug and I just have to prescribe it.”
“The health ministry has allowed the nutritional supplement to be imported and advertised on TV, so it is not harmful, and is useful for patients,” he added.
Can asserted that he does not receive any money from Eco, but added, “it would be good if I did.”
Similarly, Dr. Do Minh Tien from Military Hospital 121 said Alipas is popular, and he prescribes the products to around 15 patients on a monthly basis.
“I know of the products thanks to a conference and think it’s good for patients,” said Tien.
“They are also included in the hospital’s drug list.”