On the afternoon of 27/1, the Hanoi People's Court questioned Pham Van Cach, former chairman of the Board of Directors of Son Lam Pharmaceutical Joint Stock Company, regarding the giving and receiving of bribes involving 18 former leaders from 13 traditional medicine hospitals and medical centers nationwide.

Cach stated that Son Lam Pharmaceutical trades medicinal ingredients across the country. When a medical facility or hospital needed to purchase or was tendering for drug suppliers, the company would submit documents through the provincial Department of Health's online portal.

After winning large-value bids, for example, a 200 billion VND contract, the company would sign a master agreement with the Department of Health. However, to sell specific products, the company had to directly visit district medical centers or hospitals to sign individual drug supply contracts.

It was during this process that the 71 billion VND in "grease money" emerged.

Pham Van Cach, former chairman of the Board of Directors of Son Lam Pharmaceutical Joint Stock Company. Photo: Danh Lam

"Not just giving money away for no reason"

When asked about the reason for spending 71 billion VND, Cach stated that "this money was to ensure quick payment progress and smooth drug delivery." A greater reason was to prevent drugs from being returned for minor reasons.

Explaining this, he said Son Lam's drugs were good, meeting both domestic and international standards, but sometimes some hospitals would nitpick about the preparation methods. To avoid difficulties, he used money to encourage hospital executives to be "flexible," preventing goods from being returned repeatedly, which was "very arduous."

Additionally, according to Cach's deputy, defendant Le Van Tinh, the commission also helped expedite the signing of negotiation minutes and contracts.

Tinh gave an example: when signing a contract with Tay Ninh Traditional Medicine Hospital, deputy director Dinh Thi Mong Thanh proactively "asked about the commission" before signing. "Transfer 20% directly to her first, and another 17% to the hospital," Tinh recounted Thanh's words. Thanh is accused of receiving 4.1 billion VND from the company, keeping 2.3 billion VND for herself.

However, these commission percentages were not fixed and were not determined by Son Lam Company; rather, the hospitals proactively proposed them.

Huynh Nguyen Loc, former director of Ho Chi Minh City Institute of Traditional Medicine, accused of receiving the most bribes in the case, over 47 billion VND. Photo: Danh Lam

Aside from Thanh directly mentioning "commission," Cach stated that many hospital leaders often referred to it differently, such as needing money to buy equipment, for general agency expenses, to organize staff retreats, or for charity.

"Generally, these officials all said they took the money for general purposes; whether they spent it generally or personally, the defendant does not know," the former chairman of Son Lam Company said.

"So, they requested it, and you complied to be facilitated, to avoid difficulties...?" the presiding judge asked. Cach replied, "That's right. Otherwise, no one would just give money away for no reason."

After receiving information about the desired commission rate from a hospital, Cach would consider it based on the company's profit situation to make the payment. For instance, if the company performed well with high profits, he would give more to the hospital; "if business was tougher, and medicinal ingredient prices increased, the defendant would reduce the commission."

For some drugs nearing expiry that needed to be sold quickly, he also had to pay a higher commission. As cited by the Trial Panel, the commission rates paid by the company ranged widely, from 5% to 25%.

Among the 18 individuals accused of receiving bribes, the person who received the most money from Son Lam Company was Huynh Nguyen Loc, former director of Ho Chi Minh City Institute of Traditional Medicine, totaling over 47 billion VND – accounting for two-thirds of the total bribery amount in the case.

Despite paying 71 billion VND in bribes, director Cach affirmed that the money was taken from the company's actual profits. The two sides did not negotiate to increase the contract value, therefore, paying commissions did not increase drug prices or affect citizens' pockets.

Nguyen Manh Quyen, former chairman of the Board of Directors, General Director of LanQ Pharmaceutical Joint Stock Company. Photo: Danh Lam

In this case, in addition to bribery, Cach is also accused of fraudulent appropriation of assets, by colluding with LanQ Pharmaceutical Joint Stock Company to bid and inflate input drug prices for hospitals.

The hospital was subsequently paid 40 billion VND by the former Bac Giang Social Insurance, which included co-payments from citizens.

18 billion VND of this amount is attributed to inflated and fraudulent payments, constituting part of the wrongdoing by Cach and LanQ Pharmaceutical chairman Nguyen Manh Quyen.

The Trial Panel is currently questioning to clarify this group of fraudulent acts.

The trial opened today and is expected to last for several days. Among the 23 defendants, Pham Van Cach (former chairman of the Board of Directors of Son Lam Pharmaceutical Joint Stock Company), Le Van Tinh (former deputy director of Son Lam Pharmaceutical Joint Stock Company), and Nguyen Manh Quyen (former chairman of the Board of Directors, General Director of LanQ Pharmaceutical Joint Stock Company) are prosecuted for two crimes: fraudulent appropriation of assets and bribery.

Than Duc Lai, former director of Bac Giang Social Insurance, is prosecuted for receiving bribes. Among the former hospital directors prosecuted for the same crime are Huynh Nguyen Loc, former director of Ho Chi Minh City Institute of Traditional Medicine; Truong Thi Thu Huong (former director of Thai Nguyen Traditional Medicine Hospital); Nguyen Van Trung (former director of Bao Loc Traditional Medicine Hospital, Lam Dong province); Le Phuoc Nin (former director of Binh Dinh Traditional Medicine and Rehabilitation Hospital); Vo Thi Kim Loan (former director of Ben Tre Traditional Medicine Hospital); Dinh Thi Mong Thanh (former deputy director of Tay Ninh Traditional Medicine Hospital), among others.

Thanh Lam