Vietnam’s Covid-19 Testing Scandal Goes Viral

Vietnam’s Covid-19 Testing Scandal Goes Viral
Photo Credit: Reuters / TPG Images

What you need to know

Overpriced testing kits are an extremely sensitive issue that feeds into the long-standing problem of cronyism and backdoor politics in the medical equipment trade.

By Thiem Bui

Since early 2020, the Vietnamese Communist Party has been portraying their efforts to fight Covid-19 as a war against an “invisible enemy,” mobilizing healthcare workers, police, and the military on an unprecedented level. But in late December, the Ministry of Public Security arrested the CEO of medical company Viet A, Phan Quoc Viet, and conducted an investigation into Vietnam’s largest Covid-19 related corruption case.

The company collected US$175 million in revenue from selling overpriced Covid-19 testing kits across Vietnam. Its sales reached US$6.6 million in Hai Duong province alone, exposing a number of serious governance problems resulting from policy manipulation by a network of powerful vested interest groups. The case raises questions about the accountability of Vietnamese governance structures and officials.

There were signs that Vietnam’s national Covid-19 policy had been manipulated for private gain after the central government, the Ministry of Health, and local governments repeatedly urged mass and, in some cases, mandatory testing. By December 2021, Vietnam had carried out more than 73 million Covid-19 tests at the estimated expense of US$1.26 billion — four times higher than the amount spent on vaccines.

In February 2020, the Ministry of Science and Technology approved a special national-level research grant worth over US$830,000 for a pilot project to produce Covid-19 testing kits. Jointly produced by the Military Academy of Medicine and Viet A, the project was praised as a great success after being completed within one month.

The Ministry of Health approved its commercialization for nationwide use and introduced a price at US$20.57 per testing kit. The Ministry of Science and Technology went further by making a public announcement in April 2020 that Viet A’s testing kit had been accepted by the World Health Organization (WHO) after meeting the standard for emergency use listing. Major newspapers and media outlets in Vietnam covered the news with pride, and Viet A was awarded a Third-Class Labor Medal by then state president Nguyen Phu Trong in March 2021.

But the Ministry of Science and Technology’s official statement about the WHO’s acceptance of Viet A’s testing kits was false — the WHO had never recognized Viet A’s testing kit. Suspicions about the statement circulated on social media as early as May 2020, with many condemning it as fake news to boost public confidence and sales.

Questions about the ownership and operation of Viet A still loom large. While the CEO and his named associates only own 20% of the company, 80% of its share ownership remains publicly unknown. Viet A owns 30% of Vinbiocare, a subsidiary business in health products that was recently established by Vietnam’s largest private conglomerate Vingroup. The CEO of Viet A was once the CEO of Vinbiocare, and Vingroup bought out Viet A’s share of Vinbiocare just four months before the Viet A testing kit scandal was publicly exposed.

The case also poses serious questions about the role and integrity of the press in truth telling and protecting public health. Even the WHO has been questioned after doing nothing to correct the fake news about the tests in the Vietnamese press in April. It was only after the Ministry of Public Security went public in December 2021 that dozens of major media outlets exposed further details surrounding the scandal and the WHO’s Vietnam representative that the WHO had rejected Viet A’s testing kit.

Vietnamese Prime Minister Pham Minh Chinh recently urged the Ministry of Public Security to expand the investigation to expose the wider scale of the corruption network, while Communist Party General Secretary Nguyen Phu Trong ordered the case to be placed under the supervision of the Anti-Corruption Central Steering Committee, requiring the Communist Party Central Control Committee to investigate the party organizations and cadres involved. 

The mounting pressure on government accountability was evidenced at the Vietnam Fatherland Front’s Presidium meeting in late December 2021 and the special meeting session of the National Assembly in early January 2022. As such, the Pandora box has now been opened. The following arrest and prosecution of three senior officials from the Ministry of Health and Ministry of Science and Technology, and a series of local officials in Nghe An, Binh Duong, Ho Chi Minh city is only the beginning. The unfolding inspections into relevant authorities have also publicly become top priorities for the Government Inspector-General and the State Auditor-General. 

Overpriced testing kits are an extremely sensitive issue that feeds into the long-standing problem of cronyism and backdoor politics in the medical equipment trade. But this case differs from other cases of corruption in that it has profoundly undermined public confidence in efforts to combat the pandemic.

The overpriced Viet A testing kits are only the tip of the corruption iceberg in the health sector and other state funded projects, signifying changes around the corner for senior officials in charge.

Thiem Bui is a Fulbright Visiting Scholar at the Duke Center for International Development, Duke University.

The News Lens has been authorized to republish this article from East Asia Forum.  East Asia Forum is a platform for analysis and research on politics,  economics, business, law, security, international relations and society  relevant to public policy, centered on the Asia Pacific region.

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