Helping the DR to overcome sudden importation changes for sexual health products

Last year, the Partnership for Supply Chain Management, a nonprofit procurement and supply chain solutions provider, helped one of our main clients, the Ministry of Health (MoH) of the Dominican Republic (DR) [Ministerio de Salud Pública y Asistencia Social I MISPAS], navigate a sudden change to the importation process for condoms.
Late in 2023, the customs authority in the DR unexpectedly changed the importation regulation for condoms. Condoms imported to the DR by PFSCM for public health programs previously had the benefit of being classified under a blanket tax waiver, which ensured that the critical health products could be cleared promptly without the delay associated with applying for a tax waiver.

This change happened just as PFSCM was about to deliver 7 million condoms, or three containers full, to the country. As the containers were offloaded, the reclassification quickly complicated the customs clearance process, initially leaving stakeholders with two costly and time-consuming options. The DR could pay the estimated $40,000 in import duties and taxes or apply for tax exemption only after the containers were discharged at the destination port. This tax waiver process could take up to eight weeks, for which port storage and demurrage and detention charges of about $6,000 would have been incurred.

PFSCM Head of Client Account Management Cristina Ghiga says PFSCM could not accept the unnecessary charges and delays and instead leveraged its experience in mapping importation processes to identify the root cause of the problem and negotiate a solution with the stakeholders.

“Thanks to our deep understanding and experience of the importation process and our close collaboration with key stakeholders, PFSCM was able to identify a third option, which was to agree that the importation declaration for the condoms could be submitted under a category that already benefitted from a time-saving blanket waiver,” explains Chiga.

Ghiga notes that the mapping exercise enabled PFSCM to bring a simple yet effective solution to the stakeholders, helping them make a decision about not only the immediate importation process but also the future requirements for the receipt of condoms.

PFSCM Senior Client Account Manager Fillip Dias agrees that classifying the products in a category that already has a blanket waiver was the best solution to ensure the cost-efficiency of the procurement and timeliness of the delivery.

“Had we applied for the tax waiver, the products would have been delayed by about two months. By leveraging the agreed and existing blanket waivers, the products reached the MoH within five days after being released at the port.”

Ghiga concludes that this is a great testament to the added value of PFSCM’s services and the importance of collaboration with and managing stakeholders.

A long and fruitful partnership

Since 2009, PFSCM has delivered HIV products valued at more than $59 million to the DR. Through best procurement practices, technical assistance, in-country logistics, multi-month dispensing, and carton-less packaging initiatives, PFSCM saved the MoH of the DR millions in procurement costs over the last decade. PFSCM continues to support the country with global access pricing for ARVs and diagnostics, thereby achieving better coverage of ARV treatment and continuity in diagnostics services. PFSCM’s strong partnership with the DR and deep understanding of the country’s supply chain needs have allowed us to deliver tailored solutions to meet the client’s requirements consistently.

In 2023, PFSCM had the pleasure to meet with clients in the DR. From left: Dr. Eladio Perez, Vice Minister Public Health of the DR, Cristina Ghiga, Head of Client Account Management PFSCM, Edward Wilson, Director PFSCM, and Dr. Monica Cristina Thormann Paynado Director of Dirección de Control de las infecciones de Transmisión Sexual y Sida (DIGECITSS).

Agile logistics management to overcome importation disruptions in health supply chains

In humanitarian and emergency settings, health supply networks and processes frequently become complex once a shipment arrives at the port of entry. Unregistered products, inadequate documentation, and sudden changes in government regulations can cause inefficiencies and bottlenecks, delaying importation processes and increasing procurement lead times. With careful planning, many of these problems can be minimized or avoided.
For importation specifically, and in addition to the solutions for the DR, PFSCM also recently coordinated with supply chain stakeholders in Gambia, Sierra Leone, Guinea, Nigeria, and Tanzania to help resolve and streamline importation processes that were causing delays.

All of the above are examples of complex importation issues that are unique to the fast-changing and often unpredictable health supply chain and logistics environment in developing countries. This kind of complexity requires control, and PFSCM has learned that the only way to ensure controls are in place is by proactively communicating and coordinating with supply chain stakeholders so that each entity is empowered to excel and no party is causing another to fall behind. In global health development, this kind of collaboration is key to successful health supply chain implementation.