return icon

Multinational drug traders cracking heads over stringent local regulations

Although having import licenses in hands, the road for multi-national corporations to trade drugs in Vietnam remains tough because of legal limitations.



Foreign drug distributors hope for laxer regulations to increase foothold


Over two years since Decree No.54/2017/ND-CP came into effect to guide the implementation of the Law on Pharmacy, there remain great concerns among multinational corporations (MNCs) over distribution rules, with Zuellig Pharma Vietnam (ZPV), DKSH, and Sanofi being prominent names.

ZPV is said to face obstacles in renewing its license for its preservation storage every three years.

Under Article 91(10) of the decree, foreign-invested enterprises (FIE) holding import rights but no distribution rights are prohibited from conducting “activities directly related to the distribution of drugs or drug materials in Vietnam.”

Distribution is defined by Article 91(10) to include “transporting or providing storage services for drugs and medicinal materials.”

“This regulation makes MNCs feel unsafe, causing them time and financial losses. They spend a lot of money on this kind of facility. The management agency can have regular inspections into whether they meet the preservation standards. If they fail to meet them, they should have their licensed revoked,” said Nguyen Thi Quynh Anh, founder and chairwoman of InvestPro, which provides end-to-end services in business consulting, legal advice, and intellectual property. “Not only Zuellig Pharma but other MNCs are alo getting a headache over this.”

ZPV is even suspected of the “disguised” distribution of drugs among some FIEs in Vietnam.

The Drug Administration of Vietnam (DAV) under the Ministry of Health (MoH) said in a recent document, “Some FIEs investing in storage facilities and drug preserving services in Vietnam took advantage of the warehousing and logistics systems to distribute pharmaceuticals and benefit from it. ZPV is a prime example. The firm registered to do business in drug preserving services, but now holds a major market share in the distribution of imported drugs in Vietnam.”

Similarly, France-based pharmaceutical giant Sanofi Vietnam, which is the first MNC to get the direct drug import license in Vietnam, is facing pressure in ensuring drug quality standards in line with Vietnam’s drug distribution restrictions.

The reason for the restrictions is related to the roadmaps and regulations pertaining to Vietnam’s commitments to the World Trade Organization (WTO) on goods trading and FIEs’ directly related activities in Vietnam.

The right to distribute pharmaceutical products is one of the rights not granted for FIEs in Vietnam. Therefore, in order to distribute the drugs, companies such as Sanofi Vietnam are required to work with local wholesalers that distribute drugs or medicinal ingredients in the local market.

Switzerland-based Novartis, which has announced receiving a certificate of eligibility for the pharmacy business from the MoH to directly import drugs to Vietnam, making it the second group to do so after Sanofi, is not an exception. This firm’s major products are prescription drugs.

Distribution rules in Decree 54 have been a controversial issue among MNCs in Vietnam. In spite of the concerns, the MoH still keeps them unchanged as they are in line with the country’s World Trade Organization (WTO) commitments.

Nguyen Thu Trang, director of the WTO Centre and Economic Integration under the Vietnam Chamber of Commerce and Industry, said that according to the service commitments form of the WTO, Vietnam did not commit to allow FIEs to conduct drug distribution services.

“In Vietnam’s WTO commitments, distribution services include transportation and storage. Therefore, if Vietnam does not allow FIEs to conduct distribution services, Vietnam cannot allow transportation and storage services under distribution services,” she said. VIR

Tung Anh

Local pharma dives into ethical drugs

Local pharma dives into ethical drugs

Facing much tougher competition ahead, Vietnamese big pharmaceutical firms are seeking new solutions in order to delve deeper into the ethical drugs channel to shore up growth.

Vietnam emerges as a global pharmaceutical hub

Vietnam emerges as a global pharmaceutical hub

According to experts, the boost in attractiveness of the Vietnamese market comes at a time when the business environment for drugmakers in neighboring countries has not been favorable.

Drug administration launches pharmaceuticals databank

Drug administration launches pharmaceuticals databank

Information of medicines as well as their producers and distributers is now available on the website - the first drug and medicine databank in Vietnam, which was launched on August 12.


Central bank not tighten real estate credit: Deputy Governor

The State Bank of Vietnam (SBV) has never issued any documents or statements ordering credit for real estate be tightened, Deputy Governor Dao Minh Tu said on February 8.

Vietnamese Prime Minister starts official visit to Singapore

Prime Minister Pham Minh Chinh, his spouse, and a high-ranking Vietnamese delegation arrived in Changi Airport on February 8 afternoon, starting a three-day official visit to Singapore.

Businesses discuss ways to overcome challenges in 2023

Warned that uncertainties will still exist in 2023, businesses need to prepare well to weather the storm.

Vietnam's bond market remains quiet this year

The scale of debt in the corporate bond market is less than 15 per cent of GDP.

Organ trafficking in Vietnam driven by high demand, low rate of donation: experts

A conference on organ donation registration and the prevention of human organ and tissue trafficking was held on Monday.

VCCI proposes allowing businesses to set fuel retail prices

The Vietnam Chamber of Commerce and Industry (VCCI) has written to the Government suggesting fuel retail prices be decided by businesses based on supply and demand to prevent fuel shortages.


Vietnam puts children at centre of development policies, strategies: Ambassador

Gov’t issues action plan to realize Hanoi’s development vision until 2045

The Government has issued an action plan to realize Politburo’s resolution on the objectives for Hanoi’s development until 2030, with a vision to 2045.

Commercial sidewalk use may be charged by HCMC authorities

HCMC is planning to allow the paid use of sidewalks for commercial purposes such as vending goods or parking if these business activities leave a space of at least 1.5 meters wide for pedestrians.

CAAV advises caution when buying air tickets

The Civil Aviation Authority of Viet Nam (CAAV) has received feedback on the fact that passengers have to buy air tickets higher than the specified prices on domestic routes, especially during the peak of the Lunar New Year (Tet).

Prime Minister leaves Hanoi for official visits to Singapore, Brunei

Prime Minister Pham Minh Chinh, his spouse and a high-ranking delegation of Vietnam left Hanoi at noon on February 8 for official visits to Singapore and Brunei from February 8-11.

US war veteran wishing to return wartime diary to Vietnamese family

Pater Mathews, a US war veteran, has emailed relevant agencies of Ha Tinh province, central Vietnam, expressing his desire to fly to Vietnam and return a Vietnamese martyr’s diary he came across decades ago to the martyr’s family.


January payment transactions via national public service portal valued at 11.8 mln USD

Vietnam needs new products, services to reach tourism targets

To realise the targets of attracting 110 million tourists and earning some 650 trillion VND (27.5 billion USD) in revenue this year, Vietnam is recommended to develop more products and services to offer new experiences to visitors.

PM Chinh’s Singapore visit expected to advance bilateral trade ties

Prime Minister Pham Minh Chinh’s Singapore visit from February 8-10 aims to affirm the determination to elevate the bilateral economic ties to a new height in the context of many free trade agreement (FTAs) coming into force.