In the context where the public healthcare system frequently faces challenges in drug supply, perfecting the legal framework is an urgent requirement to ensure the quality of medical examination and treatment. The Ministry of Health has officially issued Circular No. 40/2025/TT-BYT regulating drug bidding at public health facilities. This document is effective from October 25, 2025, completely replacing Circular No. 07/2024/TT-BYT.

This is a crucial legal document directly impacting the procurement and pharmaceutical management processes in hospitals. Below are 5 key updates in the new Circular that medical staff and hospital administrators need to be aware of.

1. Decentralization of Decision-Making Authority to Heads of Facilities

One of the most significant reforms of Circular No. 40/2025/TT-BYT is the strong decentralization in procurement approval authority. Previously, the procurement process for brand-name drugs or reference biologics often had to go through multiple levels of approval, causing prolonged waiting times. Currently, this authority has been directly assigned to the head of the medical facility.

Specifically, the Hospital Director (Head of the public health facility) has the authority to decide on the procurement of brand-name drugs and reference biologics. This decision is made based on the professional advice of the Pharmacy and Therapeutics Council (for hospitals) or the Professional Council (for other facilities). This regulation allows hospitals to be more proactive in selecting high-quality drugs to meet treatment needs, minimizing intermediate administrative procedures.

2. Flexible Mechanism in Grouping Generic Drug Bids

To increase competitiveness and minimize bid cancellations due to a lack of suppliers, has restructured the bidding regulations for Generic drugs. The new mechanism allows for flexibility between drug groups based on quality standards:

• Drugs meeting the highest standards (Group 1) are allowed to bid in lower groups (including Group 1, Group 2, and Group 5).
• Drugs meeting Group 2 standards are allowed to bid in Group 2 and Group 5.
• Similar principles apply to Group 3 and Group 4 drugs when bidding in Group 5.

This adjustment brings dual benefits: ensuring fair competition while helping hospitals diversify options within the same bid package. In cases where the supply of drugs in a lower standard group is interrupted, drugs from higher standard groups can immediately serve as substitutes, contributing to drug security.

3. Adjustments for Traditional Medicine and Herbal Ingredients

For Traditional Medicine, due to the specific nature of raw materials that depend heavily on natural factors and seasonality, bidding often encounters many obstacles. Circular No. 40/2025/TT-BYT has supplemented detailed guidelines, synchronized with the Pharmacy Law 2024, to resolve issues arising when there are changes in the supply of herbal ingredients during contract implementation.

Furthermore, the grouping regulations for traditional medicaments (in the form of extracts, granules, powders, etc.) have also been relaxed. Medicaments meeting Group 1 standards are allowed to bid in Group 2 and Group 3; Group 2 drugs can bid in Group 3. This adjustment helps remove technical barriers, supporting Traditional Medicine hospitals in accessing drug sources more easily.

4. Perfecting the Legal Framework and Special Investment Procedures

Circular No. 40/2025/TT-BYT was issued to overcome the limitations of Circular No.07/2024/TT-BYT after more than a year of implementation. Although the previous document made certain progress, practical application still revealed some legal gaps, especially in urgent situations or supply chain disruptions.

The new Circular adds regulations on special investment procedures and optional procurement. This serves as an important legal basis for hospitals to handle arising situations flexibly, ensuring that professional activities are not interrupted due to drug shortages.

5. Practical Impact on the Quality of Medical Care

The core objective of reforming the bidding mechanism is to serve the patient’s best interest. Shortening the approval process for contractor selection plans significantly reduces drug waiting times at medical facilities.

Instead of waiting 3 to 5 months to re-bid when drugs run out, Heads of facilities now have legal tools to conduct rapid supplementary procurement. This is significant in ensuring the rights of health insurance patients, minimizing the risk of patients having to purchase drugs out-of-pocket or transferring to other hospitals due to local drug shortages.

BSc. Ho Ngoc Ha – Center for Support & Continuing Education