due to the potential direct impacts on long-term supply security.

Trade and various services will see setbacks as exit and entry controls remain tight

Last week, Hapulico – one of the largest wholesale medicine markets in Vietnam – continued all operations as normal, even after the EU decided to close external borders for a month. At Hapulico, many kinds of pharmaceuticals and medical equipment are imported from Europe as well as elsewhere.

A wholesaler at the market said, “For the time being, the pharmaceutical market is stable and witnessing no disorder. We have worked with international partners to ensure the stable supply of drugs and medical devices.”

Like Hapulico, many wholesale drug markets across Vietnam are reported to be proceeding with business as usual thanks to sufficient storage, imports, and contingency plans from domestic and international pharma businesses.

Risk management readiness

In the wake of the serious developments of COVID-19 and possible impacts on trade from the EU, international pharma firms such as Sanofi and Zuellig Pharma Vietnam (ZPV) have built risk management plans to ensure business continuity. ZPV chief executive Marc Franck told VIR, “For the time being the lockdown of several European countries has not impacted the supply of medicine to Vietnam and we are monitoring the situation carefully.”

Franck said that ZPV is taking every possible step to be able to continue to operate even in the most challenging situation. “As such, ZPV Vietnam has a strong business continuity plan in place to ensure imported stock is well preserved and sold to declared Vietnamese wholesalers.”

In a similar vein, in order to ensure the supply of innovative medicines, Sanofi, Adamed Pharma, and Novartis have taken actions too.

Haissam Chraiteh, general manager of Sanofi Indochina, said, “We formed an internal crisis team in February to put in place a comprehensive business continuity plan, to plan in advance and prepare shipments accordingly, so that we can avoid a shortage of drugs.”

As well as importing drugs to Vietnam, Sanofi has two manufacturing sites here and 80% of its production is for the local market. At present, taskforces at these sites are still working while strictly complying with Vietnam’s Ministry of Health’s recommendations.

Novartis has also built a risk management framework, which is regularly reviewed and updated, and ensures adequate business continuity and recovery planning.

This planning includes the availability of safety stock, pandemic preparedness plans, and the implementation of dual sourcing strategies as applicable.

Short-term impacts

Businesses in many sectors recently expressed concerns at the news that the US and EU member states were shutting their borders. While the closures are intended to control the spread of the virus by curbing individual travel, not trade activities, the restrictions may have a negative impact on the supply chains of many companies around the world.

According to the European Chamber of Commerce in Vietnam, its members face difficulties in a range of sectors and industries, from tourism and transport to logistics and healthcare.

For instance, Adamed Pharma has a dual presence in the Southeast Asian nation via its representative office and portfolio of EU-produced imported medicines and through its local manufacturing company Davipharm, providing generic locally-made drugs.

Magdalena Krakowiak, head of Public Affairs and CSR at Adamed Vietnam, told VIR, “Neither our imported drugs supply nor local medicine production have been impacted by the virus outbreak for the time being.”

She continued, “Of course, it impacts daily operations by delaying, postponing, or cancelling some meetings which cannot be organised via teleconferences, implementing travel restrictions, and other safety measures, as well as delaying some processes. Procuring face masks for all of our employees – almost 300 people – is also becoming a real challenge.”

As COVID-19 strengthens its grip, businesses are becoming increasingly concerned about the trade situation as countries take stricter measures.

Ta Hoang Linh, head of the European-American Markets Department under Vietnam’s Ministry of Industry and Trade said that border closures do not mean a lockdown of all trade activities, but tightened exit and entry controls mean trade and services will experience delays.

Krakowiak of Adamed added, “The situation also requires from us permanent monitoring of suppliers of active ingredients and other raw materials, and addressing and managing any potential risks related to it. We actively search for alternative supply sources and we have increased inventories.”

She said that as long as most business operations continue to run in Vietnam, they are able to maintain production stability. “However, the situation in the EU is worrying, since the lockdown of many countries has a direct impact on long-term supply security.”

Elsewhere, Novartis, despite having risk management systems in place, is still worried over the dynamic situation, with many factors that are beyond any one manufacturer’s control.

“We continue to monitor the situation closely and will adapt measures as the situation evolves,” emphasised Roeland Roelofs, country president of Novartis Vietnam.

Industry insiders have said the pharmaceutical and healthcare industry is among the rare beneficiaries of the pandemic. If it is adversely affected, this will threaten the fight against COVID-19. Therefore, countries worldwide will do their utmost to ensure that does not happen. VIR

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