Luận văn The challenges for implementation of good manufacturing practices by local pharmaceutical manufactures in vietnam

tation. However, the mentioned GMP is only guideline but not regulation. Vietnam GMP is basically built followed ASEAN GMP, however, it is only true for the general guidelines, while the practical and specific procedural guidelines are established for the appropriateness of the local circumstances. For detailed and specific requirements of Vietnam GMP, two key persons in Vietnam Ministry of Health can be contacted via the addresses given in the appendix G. 3.4 Major challenges faced by firms towards implementing GMP standards Up to the end of the first quarter of the year 2000, Vietnam has only 15 pharmaceutical factories that are recognized as meeting the ASEAN GMP standards, accounting 13.4% of total pharmaceutical manufacturers in Vietnam. (Ministry of Health at a Friday meeting in HCMC to review the implementation of GMP standards by drug factories nationwide on April 10th, 2000). These include eight all-local producers, and seven foreign-owned companies. In reaching the target of 100% GMP compliance in the year 2003, there must be some dramatic changes happened, both in companies’ efforts and government’s supports to overcome the existing challenges. Thus, before mentioning how to overcome those challenges, they must be addressed specifically. Hence, what are the challenges faced by firms in implementing GMP standards? The challenges faced by pharmaceutical manufacturers in Vietnam in attaining GMP compliance are divided into two groups of internal factors and external factors. 3.4.1 Internal factors Internal factors consist of three major sources mentioned hereunder, which are the financial shortage, the qualified-personnel shortage in terms of both GMP-relating as well as technical manpower, and finally the inconvenience or incapability of firms in accessing the needed information. Financial challenges According to the Dr. Quang, Vice Director of the Institute of Drug Quality Control, Ho Chi Minh city, Vietnam, approximately two million of U.S dollars per production line is needed for firm to spend on GMP implementation. That amount is a considering large amount for local pharmaceutical manufacturers, especially the small enterprises. Local pharmaceutical manufacturers’ revenues in 1999 are summarized in the graph hereunder. Figure 3.1: Local pharmaceutical manufacturers’ revenues in 1999 Note: Data collected from Vietnam’s Ministry of Commerce A list of firms and their relevant data can be referred in the appendix E From the above graph, there are only eight firms having the revenues exceeding two million of U.S.$, accounting less than 30% of total mentioned There are more smaller local pharmaceutical firms which are not included in the list due to two main reasons: Not directly produce drugs Too small compared to others local pharmaceutical manufacturers. There is only one firm having revenue exceeding ten million of U.S.$, that is the National Pharmaceutical Co. No.1. With revenues exceeding eight million of U.S.$, there is an additional company qualified. In general, assume that a company wanting to implement GMP (investment of two million U.S.$ per production line) needs to have revenue doubling the initiative investment on GMP, thus, there are only 4 companies qualified, accounting less than 20% of total considered local firms. Lack of qualified personnel Lack of GMP-trained personnel: In Vietnam, the number of persons who was properly trained of GMP is insufficient. Foreign-owned firms usually send their personnel abroad for GMP training while it is hard for state-owned companies to do so due to the limited financial budgets. According to the statistics of the Ministry of Health, up to the second quarter of the year 2000, there are only twenty local pharmacists trained formally by Australian trainers on GMP (Saigon Times, August 22nd, 2000). Besides, there are few officers of the Ministry of Health are trained on GMP and attended meetings relating to ASEAN GMP topics. Aside form those, many persons are trained locally and informally of general information about GMP for a short period. Thus, they are not qualified as key persons in promoting GMP implementation process. Lack of highly technical-skilled personnel: In GMP guidelines, there are many well-defined and rather strict requirements that need to be executed properly by qualified technical staffs, who are usually qualified pharmacists. As common actualities for firms around the world, it is quite difficult to be able to recruit the well-qualified personnel, and it is much harder to retain them. That reality is especially true for state-owned firms wherein the improper organizational rules or bureaucracy procedures still exist. Difficulties in Information Accessing: It is a common circumstance in Vietnam that firms, especially state-owned and small enterprises, face many obstacles and challenges in finding the necessary information for doing their businesses. It is even truer for searching the information relating to GMP as GMP is rather new in Vietnam for about four or five years. Usually firms are eager to implement GMP, however, they do not know what to do, where to commence, to what extent, and alike. In the guidelines, regulations, circulars All of the guidelines, regulations, circulars and the like can be found at the Vietnam Ministry of Health at the following address: 138A Giang Vo Street Hanoi, Vietnam Tel: (844) 8461525 Fax: (844) 8234758 alike, there is no specific detail guiding firms on a step-by-step basis towards implementing GMP. Though, this might be considered as an external factor. Nevertheless, it is included in internal factors for accentuating firm’s insufficient investment on maintaining and improving their intangible assets. Normally, at this moment, email is popular for firms. However, Internet and its robust information resources are still beyond major firms’ reach mainly due to the two reasons: there is no needed information available on the Internet, and the high Internet accessing fee. (Currently, the Internet accessing fee through phone line is approximately U.S.$ 1.5 per hour). 3.4.2 External factors Three main causes are believed to be factors that obstruct firms’ GMP-implementation capabilities. They are the lack of updated as well as the proper governmental policies towards encouraging firms’ GMP compliance, consumers’ behaviors and attitudes such as self-directing habits in buying medicines, plus their lacking of awareness of quality standards such as GMP standards, and finally the rivals’ effects such as unbalanced and unsound competition, price competition and the like. Governmental policies: Regulations as well as guidelines are issued laggardly, inconsistently and non-synchronously, bringing firms many obstacles and confusions in deciding what to do in implementing GMP standards. Referring to all of the issued guidelines, regulations, circulars and the like, which are relating to GMP, there is no specific guidance on how to successfully implement GMP standards or the listed pitfalls, key points in GMP implementation. Moreover, referring to session 3.2, it can be seen that there is nearly one and a half year lagged after the issuing of the requirement of GMP compliance in all pharmaceutical manufacturers, the privileges for GMP-complied firms was mentioned formally. Thus, firms have not many motives for implementing GMP that costs them significantly at the initial period. Lacking of clear favorable conditions reserved for GMP-complied firms as well as of a proper and effective mechanism for supplying the essential and necessary information for firms in order to encourage GMP compliance. As mentioned in session 3.2, the followings are the granted privileges for GMP-complied firms: Be allowed to print an additional sentence of “GMP-approved Company” in the label. Be granted some favors in manufacturing the exports. Be allowed to cooperate and to be franchised with major well-known pharmaceutical manufacturers in the world for some kinds of products. Be prioritized in participating in bidding both at national and international level, to supply pharmaceuticals for national health programs. Be favored in supplying the essential pharmaceuticals for hospitals as well as health programs, which funded by governmental funds or international aids. Be privileged in approving the production registration, including the pharmaceuticals belonging to the list of limited-granting products. (Note: the above favors for GMP-complied firms are entirely quoted from the letter No. 284/QLD issued on January 14th, 1998 by the Ministry of Health on favorable conditions for GMP-approved pharmaceutical factories). The ambiguousness of these favors are analyzed hereunder: Be allowed to print an additional sentence of “GMP-approved Company” in the label. What does it benefit the company while the local consumers are not aware of GMP quality standards? What does it benefit the local producers while doctors and pharmacists keep on recommending the premium-price or imported medicines to end-consumers for gaining higher commission? Be granted some favors in manufacturing the exports. Which favors are granted specifically? Tax-reduction? Prioritized in bidding? Allowed to franchise? However, the ultimate issue is that how to find markets for their exports? Does the government help GMP-complied firms find foreign markets for their products? Does this encourage firms to implement GMP if their focused market is local market? Be allowed to cooperate and to be franchised with major well-known pharmaceutical manufacturers in the world for some kinds of products. Actually, this mentioned favor is unnecessary, as the franchisers themselves always require their franchisees to have GMP-complied certificates. Be prioritized in participating in bidding both at national and international level, to supply pharmaceuticals for national health programs. Be prioritized to what extent? In this case, does price affect the final decision? It should be noticed that it is supplying medicines to funded national health programs, and there are much red tape and bureaucracies in funded national programs that may consider the price as the first priority in selecting the suppliers. Moreover, it is normal that GMP-complied firms may have higher production costs than non GMP-complied manufacturers at the first several years. Thus, GMP-complied firms surely loose their advantages in bidding for price-sensitive cases. Be favored in supplying the essential pharmaceuticals for hospitals as well as health programs, which funded by governmental funds or international aids. As in the previous analysis, to what extent and in which categories GMP-complied firms are favored? Be privileged in approving the production registration, including the pharmaceuticals belonging to the list of limited-granting products. Does it encourage all pharmaceutical manufacturers to implement GMP if their major and targeted products are just the general medicines? However, the Ministry of Health is on the process of banning non GMP- complied pharmaceutical manufacturers from producing any kinds of medicines. It means that GMP is going to be regulation in 2003. Moreover, with regards to the lack of a proper and effective mechanism for supplying the essential and necessary information for firms, there is no GMP-focused web-site now in Vietnam. In this IT era, Vietnam is surely capable to build database and web sites for GMP-related contents. However, it has not been done yet as the importance and usefulness of IT is not properly appreciated in governmental organizations. Consumers’ behaviors and attitudes: Consumers can be classified into two groups: end-users (patients) and influencers (doctors, pharmacists). End users: Consumers are usually influenced by the media advertisements due to lacking of professional knowledge in medicines. Therefore, the real quality is not as important as the advertised-quality in theirs buying decisions. This habit hinders pharmaceutical manufacturers to invest significantly on improving product quality by implementing GMP standards, as GMP-implementing execution requires huge financial and manpower investment. Moreover, the price sensitiveness is still most of Vietnamese’s character due to the low-income level and most of the individual consumer does not aware of GMP quality standards. Thus, it contributes to the indifferences of GMP-approved firms and non GMP-approved pharmaceutical manufacturers. Last but not least, up till now, fondness of imported goods is still the character of Vietnamese’s majority that hinders local firms’ potentials. Doctors and pharmacists: While the patients are the ultimate end-users, pharmacists and private or public doctors are usually key buyers and decision-makers. And normally their profit is directed related to the price, thus, premium-priced foreign products tend to be recommended to patients regardless of their quality. Rivals’ Influences Price competition from sub-standard generics, parallel imports, smuggled drugs and copycat products obstruct firms from investing capital on implementing GMP. Moreover, at the very first stage of GMP implementation, the production costs will be increased significantly. Unsound and unequal competitions among immature local pharmaceutical manufacturers and joint-ventures with giant worldwide corporations or financial-strong as well as technical-strong FDI companies in the conditions of lacking proper governmental ruling or guiding regulations. Without a proper support from the government, local firms may be kicked out of the market. 3.5 Government's responsibilities in supporting firms’ GMP compliance As written before, the Vietnamese government realized the importance of GMP compliance for pharmaceutical manufacturers, especially local firms in terms of: Supplying consumers with consistent and good quality medicinal products, as human’s health is greatly critical. Penetrating local firms’ markets into other countries to promote exports and reduce the import quota for drugs. Thus, with certain approaches, the government is on the process of encouraging firm’s GMP compliance, such as: Issued some decisions and regulations concerning the promotion of GMP implementation of pharmaceutical manufacturers throughout the country. Granted some privileges for GMP-approved firms in their production registration and cooperation with foreign pharmaceutical manufacturer corporations as well as participation in bidding. However, there is no specific guidance is built to help firms step-by-step successfully implement GMP standards and those granted privileges are vague and too general in meanings. Thus, further government’s efforts are obviously needed to improve the existing circumstances to meet the defined target of 100% pharmaceutical manufacturers meeting the ASEAN GMP standards in the year of 2003. The role of government is significantly important in Vietnam’s business environment, as it is still a “market economics with the guidance and monitor of the government”. Therefore, to increase the GMP-compliance ratio (number of GMP-approved firms to total number of pharmaceutical manufacturers in the country, which is less than 15% in the year 2000) and reach the 100% ratio, Vietnam’s government has to do the best in enforcing firms’ GMP-compliance while still support local firms in fostering their capabilities in doing their businesses. Some recommendations concerning the policies are mentioned in the next chapter. CHAPTER 4 CONCLUSIONS AND RECOMMENDATIONS 4.1 Conclusions With the on-going market globalization and the increasingly severe competition over the world, quality becomes the first priority in manufacturing firms in sustaining and developing. Also quality plays more and more important role in consumer’s buying decision. These are reasons why firms are trying to meet particular international-recognized quality standards including GMP standards system for pharmaceutical products. In most developed countries, GMPs have become regulations and some mutual recognition agreements have been established among them such as United States of America and European Union, Canada and European Union, Australia and European Union and the like. However, in Asian region, although there was a unique GMP guidelines called ASEAN GMP, in each country there is a national GMP standards system that is generally based on ASEAN GMP, and there is no mutual recognition for GMP-approved certificates among ASEAN members. In Vietnam, the Vietnam’s GMP is basically followed ASEAN GMP but with some additional specific measures and requirements that are suited to the local actualities. However, pharmaceutical manufacturers, especially local firms are facing many challenges in struggling to achieve GMP conformity due to many sources of factors including the immature capabilities and lack of proper, on-time supports and guidance from the government. Some typical examples of those are: The lacking of financial budget for GMP implementation (estimated at U.S.$ two million per production line) The shortage of qualified personnel in GMP-relating fields as well as technical fields The unavailability of necessary information for deciding what to do, how to do, to what extends, and the like in implementing GMP standards. The regulations as well as guidelines that are laggardly, inconsistently and non-synchronously issued lead to the confusions and troubles in firm’s GMP implementation. The lack of clearly distinctions in government’s favorable treatments between GMP-approved firms and non-GMP-approved companies that lessen firms’ willingness to achieve GMP certificates In summary, to be able to meet the defined target of 100% GMP-qualified pharmaceutical manufacturers in Vietnam in the year of 2003, more significant efforts from Vietnam’s government (Ministry of Health) are needed. This is the main objective of this research paper, for examining the existing challenges and recommending some considering points for both firms and the government to take into account when thinking of GMP-implementation and GMP-compliance promotion. 4.2 Recommendations Recommendations are made to firms, government, and to further studies. Recommendations to firms Pharmaceutical manufacturers should comply with GMP standards because of the reasons hereunder: In this fiercely competitive market, quality is crucial to firms’ survival and development. GMP helps build quality into firms’ products. GMP is recognized and enforceable by governmental authorizations, thus, firms have to comply with GMP sooner or later. Moreover, only with GMP-complied certificate, firms can penetrate their markets beyond local saturated market. Thus, how to overcome the aforementioned challenges in implementing GMP standards? The followings are some recommendations to firms: To overcome financial shortage: Merging together: As currently, almost every province in Vietnam has its own pharmaceutical manufacturer. These provincial firms usually have revenues less than one million U.S. dollar (from appendix E, there are 14 firms having revenues less than one million U.S.$, accounting more than 50% of the total considered firms). Thus, they themselves should think of merging together to be stronger in both human and financial capitals. If facing conflicts in merging together, firms can propose that solution to the upper level management (the government). This issue is also mentioned in the recommendations for government hereafter. Advantages: Be stronger in both human and financial capitals. Disadvantages: How to make the decisions relating to the location, facilities, personnel and alike. However, these challenges can be solved based on clear macro and micro strategies set by the government (in state-owned firms) or based on a clear business vision and win-win solutions set by all parties. Privatization (for state-owned firms only): In case that the government looses control or is incapable to control the merging, state-owned provincial firms may propose another solution that is privatization to become private companies or stock-based companies. Advantages: Have stronger motives in implementing GMP for their own competitive advantages. Also, they can collect more capital from employees, outsiders (in stock-based option), or from investors, new owners (in selling-out option). Disadvantages: May not be allowed by the government. Seeking governmental financial supports: Asking helps from the government for low interest rate loans aiming at encouraging GMP implementation (with the Ministry of Health’s appeal). However, before making the decision for taking any loan, small firms should consider carefully the potential benefits gained by implementing GMP, especially in the short term as the initial seems not too smoothly in terms of cost, sales and alike, such as whether they are sure to have new contracts, new markets when complied with GMP? If they are not sure and the prospective seems too gloomy, they should think of stepping out of the industry because GMP will become regulation sooner or later. To overcome the qualified-personnel shortage: GMP well-trained personnel: + Ask for helps from consultants, experts mainly from two sources: officers of the Ministry of Health, and well-trained GMP experts in foreign-owned firms who are Vietnamese nationals and willing to devote to the nation’s pharmaceutical industry. + Benchmark from other GMP-complied firms by establishing good relationship among rivals. + Cooperate for mutual benefits and build a GMP forum, may be virtual forum in the simplest form of a mailing list, to share and solve problems. + Try to send at least one key person per firm to be formally trained about GMP. The tuition may be less than one percent of the total investment on one production line when implementing GMP. However, the benefits seem far from expectations. It can help save time, save money by avoiding numerous mistakes that would occur during the implementing period. High qualified technical personnel: + Reconsider the human resource policies in terms of recruiting, compensation, rewarding and alike, to be able to recruit and retain the qualified technical staff. + Usually, firms want to employ experienced potential employees. However, experience needs a working environment to be built. Thus, firms should be willing to recruit fresh graduates and offer on-the-job training. By doing that way, firms will have qualified technical staff years later. + Also firms should cooperate with universities by giving students opportunities to practice at firms, granting top students scholarships if they are willing to work for the companies when graduated. Information Accessing: Firms should keep in mind the importance of knowledge and information and do not devaluate their roles in running a business successfully. Firms also need to be more active in finding and contributing useful information such as tactics, how-to-do advice for mutual benefits. Last but not least, if firms can overcome financial and personnel shortages, then, in the implementing process, they may still face mistakes. Thus, the following tactics are recommended for successfully and effectively implementing GMP. Ten principles of GMP implementation: (Kathy Constantine, 2000) Writing step by step procedures that provide a roadmap for controlled and consistent performance: Written procedures are essential to the consistent functioning of the company. When writing them, make sure that they are clear, concise, easy to understand, and logical. Having well conceived, well-written, and well-packaged procedures is the first step toward GMP compliance, and controlled and consistent performance. Carefully following written procedures to prevent contamination, mix-ups, and errors: The written procedure is the most valuable tool that one have at his or her disposal to ensure product quality. A written procedure is a well thought out plan to help one attain the consistent quality in his or her work. Written procedures are as important to the experienced veteran as they are to the newly hired employee. The written procedure is the key to ensure compliance with the GMP Regulations. Written procedures are the roadmap to quality. Promptly and accurately documenting work for compliance and tractability: Before any product is released to the market, a complete check of its records is made to make sure the product meets the quality standards. When receiving a customer complaint, the product history records become very important documents. They allow the responsible person to carefully examine each step of the manufacturing process to determine the seriousness of the complaint and decide what action should be taken. Proving that systems do what they are designed to do by validating work