(Tiểu luận) report on import business processcase of vietnam’s pharmatical productsimportation

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

Ngo Hoang Minh - 2113150045 Bui Phu Quang – 2113150058 Nguyen Thanh Nam – 2112550035 Pham Anh Vu – 2112150187

Hanoi, June 2023

Table of Contents

A Introduction 3

B Main Content 5

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 7

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

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 challengesinvolved 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, includingcustoms 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

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

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 3 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

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

However, local drug production is still weak and incapable of meeting domestic demand, 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

Represented by: Mr Deepika Menon - Position: Country Brand Manager

Hereinafter referred to as “Seller”

AND/

FPT LONG CHAU PHARMA JOINT STOCK COMPANY

BÀI TẬP PHẦN XÁC SUẤT – AAA Class…

Giao dịch TMQT 100% (4)

12

Tel: (028)73023456 Telex: 180-069-28 Fax: 180-069-28

Mobile: 02873023456 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,

product name, model number, manufacturer's name and address, lot number, and any necessary warning labels The packaging should be robust, protective, and clearly displaythe 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 shallprovide 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

Port of loading: Las Vegas Port

Port of unloading: Cat Lai Port

Notice of shipment: within 24 hours after finishing the shipment, the Seller must inform the Buyer the details of shipment including: date of shipment, expected time of arrival, which is sent by fax firstly and confirmed in written document

Transshipment: Not allowed

Partial shipment: Not allowed

Amendment charge (if any) will be borne by the faulty party

Payment shall be made in USD by an Irrevocable L/C at sight opened within 15 days after signing of this contract at Vietcombank, Ho Chi Minh City Branch, payable from B/L date for the full amount of the contract value in favor of the seller through Capital One bank upon presentation of the following document

Bank: Joint Stock Commercial Bank for Foreign Trade of Vietnam

Address: No 5 Me Linh Street, Ben Nghe, First District, Ho Chi Minh City

Swift code: NAXMUS23M

Beneficiary: FPT LONG CHAU PHARMA JOINT STOCK COMPANY

Account Number: 091689799999

:Payment shall be made upon presentation to bank of the following documents:

3/3 sets original clean “shipped on board” ocean Bill of Lading

Signed commercial invoice

Signed detailed packing list The detailed packing list must clearly indicate the quantity

Certificate of Origin in duplicate issued by the Seller

Certificate of Insurance

DHL receipt

The minutes of delivery to the buyer, with the signature and seal of the buyer; and confirmed without any claim to the goods

All the above documents must be made in each of the three versions (triplicate).

III/ Pharmaceutical products importing process

1.1 Main product: First-aid boxes and kits

1.2 Custom duties on importing Pharmaceutical products into Vietnam:

VAT: 5%

Import duty: none

1.3 Governmental management on Pharmaceutical products imported to Vietnam:

The import of Pharmaceutical products requires Import license from the Drug

Administration of Vietnam, Ministry of Health…

1.4 Custom procedure of importing Pharmaceutical products into Vietnam:

Customs procedure of importing Pharmaceutical products into Vietnam is the same as othercommon commodities (which includes certain required documents)

1.5 Regulatory requirements

Circular No 38/2015/TT-BTC: regulations on customs procedures; customs inspection and supervision; export tax, import tax and tax administration for imported and exported goods

direct contact with drugs

Products with circulation numbers:

Commercial invoice

Foreign trade contracts

Bill of lading

Certificate of Origin

List of imported drugs

Product circulation license or Decision on issuance of circulation registration number (original or valid notarized copy)

License to operate drugs and medicinal ingredients in Vietnam for foreign companies supplying drugs

Products without circulation numbers:

An application for registration of a free-sale certificate and medicinal ingredients

A certified true copy of a valid representative office establishment license, for drug trading establishments, or an unexpired Certificate of eligibility for pharmacy business

The original or a certified true copy of the pharmaceutical product certificate, for imported drugs, is still valid

Sample labels, raw materials, drug information and other documents

satisfy all requirements in Clause 4, Article 54 of the Law on Pharmacy 2016.

For new drugs, reference biological products, vaccines, etc., which are indicated in the diseases on the list promulgated by the Minister of Health,enterprises must have additional clinical records proving their safety and effectiveness

The same biological product must have additional quality records compared to a reference biological product

In addition, drugs that require bioequivalence testing must have additional bioequivalence study data reports of the drug

→ Having registered circulation number, the import of the product shall contain the documents same as products with circulation numbers

1.7 Expected import process time: Import shipments typically take around one to three days to complete

2.1 Import procedure:

Acquiring for import permission:

If a business wants to engage in import and export activity, as well as domestic distribution (such as retail and wholesale) in Vietnam, the most common set up method is setting up a trading company Once a trading company is set up, they must register with the Department of Planning and Investment (DPI)

Notes on Procedures for Importing Medicines:

Commitment to comply with the law

Perform customs procedures carefully and thoroughly

Buy insurance (if available)

Procedures for importing pharmaceutical products must be precise and meticulous in every small detail in order to avoid damage to enterprises.Safely storing pharmaceutical products in order to provide users with

Accordingly, the two parties will agree on the relevant conditions, including somekey terms as follows:

In addition, there are some other important terms such as:

Conditions of delivery (in this case is CIF)

Delivery time

Payment: term, payment method (in the form of money transfer or credit, )

Merchant documents must be sent to the buyer

By this step, the two parties will arrange to ship according to agreed conditions Inaddition, the contract will specify the specific responsibilities of each partySome details in the Contract:

Handling payment process: The two parties carefully discussed and agreed

on Payment terms as mentioned in the Contract above

Fill in the L/C Application Pay the fee and the L/C deposit The buyer is responsible for the L/C fee

Contracting carriage: The import company has to contract at its own cost for the carriage of the goods from the named port of shipment The seller has

to deliver the goods to the carrier nominated by the buyer

Pre-shipment inspection: The importer requires inspections when production is at least 80% complete

Acquiring for cargo premium

The buyer buys a cargo premium to cover goods against damage orloss while in transit

The insurance for the goods should be done before they are handed