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Phan Thi Thu HienGroup: 7Members: Mai Quang Anh – 2113550004 Ngo Hoang Minh - 2113150045 Bui Phu Quang – 2113150058 Nguyen Thanh Nam – 2112550035 Pham Anh Vu – 2112150187Course: TMAE302G
FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS REPORT ON IMPORT BUSINESS PROCESS CASE OF VIETNAM’S PHARMATICAL PRODUCTS IMPORTATION Instructor Group Members : Dr Phan Thi Thu Hien :7 : Mai Quang Anh – 2113550004 Ngo Hoang Minh - 2113150045 Bui Phu Quang – 2113150058 Nguyen Thanh Nam – 2112550035 Course Pham Anh Vu – 2112150187 : TMAE302(GD2-HK2-2223).1 Hanoi, June 2023 Table of Contents A Introduction B Main Content I/ Overview of Import of Pharmaceutical industry in Vietnam .5 II/ Sales Contract of First-aid boxes and kits with primary terms and conditions: Commodity, quality, quantity, price, delivery and payment III/ Pharmaceutical products importing process .11 1) Process information 11 2) Pharmaceutical products importing process and core activities 13 IV/ Analyze import process by BPA: descriptive bottlenecks and reasons 18 1) Import Process by BPA 18 2) Bottlenecks in the Process 21 3) Reasons for Bottlenecks 21 4) Improving the Import Process through BPA 22 V/ Solution to improve export/import performance of Vietnamese businesses with The United State of America .23 1) Challenges in Import Procedures 23 2) Solutions to Improve Import Performance 24 C Conclusion 25 D References 27 A Introduction The import of pharmaceutical products plays a critical role in meeting the healthcare needs of a nation In Vietnam, the demand for pharmaceutical imports has been steadily increasing to support the growing population and address various health concerns However, the import business process in Vietnam's pharmaceutical sector is subject to various challenges that impact efficiency, transparency, and overall import performance This report aims to provide an in-depth analysis of the import business process for pharmaceutical products in Vietnam It will examine the key stages, stakeholders, and challenges involved in the import process and propose potential solutions to enhance import performance By identifying areas of improvement, this analysis seeks to contribute to the overall growth and development of Vietnam's pharmaceutical industry The report will begin by outlining the current regulatory framework governing pharmaceutical imports in Vietnam This will include an examination of the registration requirements, import documentation procedures, and labeling regulations that pharmaceutical businesses must adhere to By understanding the regulatory landscape, we can identify potential bottlenecks and areas for streamlining and simplification The next section will delve into the various stages of the import business process, including customs clearance, quality assurance, and logistics It will explore the challenges faced by pharmaceutical businesses at each stage and analyze the impact of these challenges on import performance By examining these challenges, we can pinpoint specific areas that require attention and propose strategies to overcome them Moreover, the report will assess the role of stakeholders involved in the import process, such as regulatory authorities, importers, customs officials, and logistics providers Understanding the roles, responsibilities, and interactions of these stakeholders is crucial for identifying opportunities for collaboration and streamlining processes Lastly, the report will propose potential solutions and strategies to enhance the import business process in Vietnam's pharmaceutical industry These solutions may include regulatory harmonization, automation of customs procedures, capacity-building initiatives, and improved communication and collaboration among stakeholders By implementing these solutions, the aim is to enhance import efficiency, reduce costs, and ensure the timely availability of high-quality pharmaceutical products in Vietnam In conclusion, this report will provide a comprehensive analysis of Vietnam's pharmaceutical products import business process By identifying the challenges faced by stakeholders and proposing effective solutions, it aims to contribute to the growth and development of Vietnam's pharmaceutical industry, ultimately improving the accessibility and quality of healthcare in the country B Main Content I/ Overview of Import of Pharmaceutical industry in Vietnam Vietnam is among 17 countries with the most rapidly growing pharmaceutical industry in the world, according to IQVIA Institute In the group of Pharmerging Markets, divided into subgroups, Vietnam is ranked in the third group of 12 countries With a growth rate of 14%, Vietnam is only behind Argentina and Pakistan Vietnam’s average drug spending is currently only about 75 USD (2019), much lower than the world average With a large population and an economy with great potential for growth, higher levels of health awareness and increased access to pharmaceuticals, creates a strong base for market growth, assuming the required resources are put into the healthcare sector development However, there is a huge bias of people against domestic products, and foreign products have a chance to thrive Vietnam recorded that Medicinal and Pharmaceutical Product import value has gradually increased since 2017 However, in the year of 2021, due to the Covid outbreak, the demand for medicament products and vaccines increased rapidly, causing the total value rising up to 4,237,724 USD Ran Country Import value ( thousands USD) Number of imported product k Germany 509,411 22 USA 496,427 22 China 434,440 25 France 393,411 22 Belgium 345,384 14 Top Imported partners of Pharmaceutical product in Vietnam 2021 Years Import value (thousands USD) 2017 3,038,306 2018 3,027,099 2019 3,315,232 2020 3,553,982 2021 4,237,724 Vietnam's regulators on import and export of pharmaceuticals faced their greatest challenge with the country’s entrance to the World Trade Organization (WTO) at the start of 2007 Foreign enterprises have been given the right to open branches in Vietnam but were prevented from distributing their products in the market Doubts regarding drug quality and counterfeit drugs are two reasons why trust plays a major role in developing markets like Vietnam Consequently, careful branding and marketing is a vital method by which firms can capture market share in Vietnam and other developing countries Companies that are able to engage physically, initiate differential pricing policies and launch various corporate social responsibility programs are likely to succeed in Vietnam However, regulators aim at strengthening domestic production in the long term More specifically, the government has outlined investment plans of up to US$1.5bn in the pharmaceutical manufacturing sector over the next 10 years to reduce reliance on imports The plan foresees a variety of programs including the upgrade of technologies, the development and expansion of the pharmaceutical supply network, the establishment of joint ventures with foreign players thereby resulting in a greater market share for domestic pharmaceuticals The country may opt to subsidize more locally made drugs under the scheme, which would introduce risks to foreign drug makers Document continues below Discover more from:dịch TMQT Giao TMA302 Trường Đại học… 818 documents Go to course Phân tích hợp đồng 64 giao dịch thương m… Giao dịch TMQT 100% (10) Đề thi cuối kỳ giao dịch thương mại… Giao dịch TMQT 100% (10) Incoterms-2020 127 tiếng việt Giao dịch TMQT 100% (9) VỞ GHI GIAO DỊCH 69 Giao dịch TMQT 100% (5) tiểu luận GDTMQT 91 Giao dịch TMQT 100% (5) BÀI TẬP PHẦN XÁC 12 SUẤT – AAA Class… Giao dịch 100% (4) However, local drug production is still weak and incapable of meeting domestic demand, TMQT although local regulation reforms on a considerable scale are expected to attract foreign investment So reliance on imported pharmaceutical products is expected to continue in the near future II/ Sales Contract of First-aid boxes and kits with primary terms and conditions: Commodity, quality, quantity, price, delivery and payment SALES CONTRACT BETWEEN PFIZER INCORPORATION Address: No 235 East 42nd Street, New York Tel: 1-800-879-3477 Fax: 212-733-2323 Email: info@pfizer.com Represented by: Mr Deepika Menon - Position: Country Brand Manager Hereinafter referred to as “Seller” AND/ FPT LONG CHAU PHARMA JOINT STOCK COMPANY Company License No 0315275368 Address: No 379 - 381 Hai Ba Trung Street, Third District, Ho Chi Minh City Tel: (028)73023456 Telex: 180-069-28 Mobile: 02873023456 Fax: 180-069-28 Email: sale@nhathuoclongchau.com.vn Represented by: Mrs Nguyen Bach Diep - Position: Director Hereinafter referred to as “Buyer” It has been agreed that the Buyer buys and the Seller sells on the terms and conditions as follows: First-aid boxes and kits (HS Code: 30065000) Compliance with Applicable Standards: The First-aid boxes and kits must comply with ISO 13485:2016 (Medical devices - Quality management systems) or any other relevant local or international standards applicable to medical devices Material Quality: The boxes and kits should be made of durable, non-toxic, and safe materials suitable for medical use, such as high-quality plastic or metal The materials used should be resistant to impact, moisture, and corrosion Workmanship and Manufacturing Quality: The products must exhibit high-quality workmanship, with well-constructed seams, strong stitching, and secure closures The boxes and kits should be able to withstand reasonable handling and usage without any structural failures Sterility and Hygiene: If the first-aid kits contain sterile components or items, they must be individually packaged in sterile packaging The packaging should maintain the sterility of the contents until opened, and include clear indicators of sterilization methods, expiration dates, and lot numbers Labeling and Packaging: Each first-aid box or kit should be clearly labeled with the product name, model number, manufacturer's name and address, lot number, and any necessary warning labels The packaging should be robust, protective, and clearly display the quantity of boxes or kits contained inside Testing and Certifications: Prior to delivery, the supplier must perform quality control inspections to ensure that the products meet the specified requirements The supplier shall provide test reports, certificates of conformity, and any relevant safety or performance certifications from accredited laboratories or certification bodies Quantity and Packaging Size: The first-aid boxes shall be packed in sets of 10 units per carton Each carton must be properly labeled with the product details and include appropriate padding or protection to prevent damage during transportation : 1000 Cartons (20 packages per carton) at Seller's option Unit price: USD780/Carton, CIF Cat Lai Port, Viet Nam, Incoterms 2020 Total price: 780,000 In words: Seven hundred and eighty thousand dollars Invoicing: based on actual net weight of the shipment upon the inspection at loading port The above prices include the cost of packaging and the cost of loading and unloading at the port of departure Time of shipment: July 4th 2023 Not later than Within 15 days since opening L/C Within 15 days after obtaining L/C ASAP, shipment by 1st available vessel Payment of L/C value After receiving the L/C, the seller will deliver the goods in accordance with the Contract and send to the issuing bank a set of documents to prove that the sale obligation has been fulfilled The issuing bank proceeds to disclose all documents with the buyer and with the approval of all documents brought in order as per the buyer’s information Then, the buyer makes the payment to the issuing bank, which in turn forwards the payment to the negotiating bank Custom Clearance: To implement the customs clearance step to import goods, you need to have a set of documents to make customs documentation (mentioned previously) Currently, you can carry out customs declaration through electronic customs software After that, you print the declaration with the paper voucher to bring to the customs office In the case, customs documentation will include: Ministry of customs declaration and appendix: copies Commercial invoice: copy Bill of lading: copy Sea freight bill (on CIF terms): copy Certificate of Insurance Other documents: CO, quality inspection (if any) Then, take the file to the customs office to process and pay taxes to get customs clearance Next, you go to the port to change orders and sign customs procedures at ports and yards Taking delivery of import An Arrival Notice detailing the shipment specifics and the time and location of the items' arrival in Vietnam will be provided prior to their arrival Delivering the required paperwork to the carrier so they may pick up the delivery order (Delivery Order, or D/O) When you have the D/O in your possession, you bring it alongside other papers like the contract, invoice, C/O, etc After opening the Customs Declaration, Customs will conduct an inspection of your goods If true, you can release the goods and transport them to your warehouse Inspection The owner of the products must submit an inspection registration dossier to the inspection agency or the border crossing gate before or when the commodities arrive at the border gate The inspector conducts a cargo examination after unloading, according to the National Single Window website Randomly examine the quality of 5% of the shipments During the implementation of import contracts, companies cannot avoid errors such as late payment, non-payment, or failure to perform or perform improperly or fully an obligation specified in the contract When such a case occurs, the companies should promptly resolve and adjust, mediate, negotiate, and settle, without any dispute Otherwise, legal proceedings stated in the contract will be applied 2.2 Pharmaceutical importing process Participants: Exporter: PFIZER INCORPORATED Importer: FPT LONG CHAU PHARMA JOINT STOCK COMPANY Issuing Bank: JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - VIETCOMBANK Advising Bank: CAPITAL ONE FINANCIAL CORPORATION Port: CatLai Port FPT Long Chau Pharma Joint Stock Company and Pfizer Incorporated have agreed the delivery term is CIF CatLai Port, Incoterms 2020, so the delivering of pharmaceutical products to the specific port of departure, bearing settlement charges for carriage and insurance till the designated port is the responsibility of the exporter - Pfizer Incorporated IV/ Analyze import process by BPA: descriptive bottlenecks and reasons 1.1 Pre-Import Documentation: The import process begins with pre-import documentation, where accurate and complete paperwork is essential BPA can automate the creation and submission of documentation, reducing errors and saving time For example, importers can use BPA tools to generate invoices, certificates of origin, licenses, and other regulatory documents automatically This ensures that the required documentation is prepared efficiently, minimizing delays and potential bottlenecks 1.2 Customs Clearance: Customs clearance is a critical stage in the import process that involves complying with customs regulations and obtaining necessary approvals BPA can significantly streamline customs clearance procedures Some key applications of BPA in customs clearance include: a) Electronic Data Interchange: BPA enables electronic data interchange between importers and customs authorities Automated systems can validate and process import data, reducing manual data entry and minimizing errors This ensures faster and more accurate customs clearance b) Automated Classification and Valuation: BPA tools can automate the classification and valuation of imported pharmaceutical products based on predefined rules and regulations This reduces the need for manual intervention, ensures consistency in product classification, and speeds up the customs clearance process c) Integration with Customs Systems: BPA systems can be integrated with customs systems, allowing importers to submit documentation electronically and track the progress of clearance Real-time updates and notifications can be generated, keeping all stakeholders informed and minimizing communication gaps 1.3 Transportation and Logistics: Efficient transportation and logistics management are essential for timely import of pharmaceutical products BPA can be utilized to optimize the transportation process by: a) Tracking and Visibility: BPA enables real-time tracking of shipments, allowing importers to monitor the movement of pharmaceutical products from the point of origin to the destination This provides better