return icon Vietnamnet.vn

Foreign investors continue to target Vietnam’s pharmaceutical industry

Vietnam's pharmaceutical market has a lot of potential coming from the demographics, rising income and priority policies of the government.

Foreign investors would continue to target Vietnam’s pharmaceutical industry following deals such as DHG Pharmaceutical with Taisho Pharmaceutical (Japan), Mekophar Pharmaceutical with Nipro Pharma Corporation (Japan), Pymepharco with Stada (Germany), or Domesco Medical Import-Export with Abbott (US), according to Viet Dragon Securities Company (VDSC).

As the pharmaceutical industry remains undeveloped in Vietnam, local companies want to find a foreign partner who can transfer production technology and solve output problems through drug export. On the other hand, Vietnamese firms are attractive by the low production costs and the potential domestic market, stated VDSC’s latest report.

{keywords}
 


 
A study from the United Nations Population Fund (UNFPA) suggested although Vietnam is still a young country, the population entered the "aging phase” in 2017. Meanwhile, a report from the World Bank warned that population aging will likely hit Vietnam with full force within a very short span of time. This transition could come in a mere 15 years and be completed well before the 2040s. An aging population means more spending on pensions and healthcare.

In 2019, sales of Vietnam's pharmaceutical market are estimated at US$6.5 billion, of which hospital channel sales account for 75%. In addition, VDSC expected the government will have to increase spending on health care in the coming years. That was what took place in China, and it is likely to happen in Vietnam. This means that pharmaceutical companies focusing on the hospital channel will benefit.

Moreover, rising health care spending is only a matter of time. It requires the government to control expenditure better, and also to control inflation. Therefore, reducing costs and improving efficiency in health facilities is an inevitable trend. One such solution is to encourage health facilities to use domestic drugs instead of imported ones, through policies that the government has been implementing.

Challenges remain

Currently, domestic companies are not capable of pursuing the research and development of patent drugs and can only manufacture generic drugs. However, even in the generic drug segment, Vietnamese medicine only meets about 40% of the domestic demand. The reason is that most national manufacturers only have WHO-GMP standards and can only produce medium-low quality generic drugs.

{keywords}
 


 
Meanwhile, high quality generic drugs (which can bid for Tier 1 and 2 in hospital channels) require manufacturers to have EU-GMP or PIC/S-GMP standards - currently only 17 facilities meet either one of these two standards, besides 222 WHO-GMP standard facilities. Among the listed companies, only Pymepharco and Imexpharm are capable of bidding into Tier 1 and 2 due to having EU-GMP standard factories.

There are more than 90% of drug materials using in the industry still being imported, of which about half  from China. In addition to exchange rate risk, especially the USD/VND and USD/CNY pairs, raw materials price from China has also skyrocketed in the last two years due to the closure of many factories in China, as an attempt to protect the environment. This has a negative impact on the profit margins of most Vietnamese pharmaceutical companies because medicines price is under the government’s control and the fierce competition in the industry makes it almost impossible to pass increasing cost to consumers.

VDSC’s report suggested the Vietnamese pharmaceutical market has a lot of potential coming from the demographics, rising income and priority policies of the government, however, as with any development of other industries, after the fragmented phase will be the competitive and selective one.

“The end goal is for consumers to use medicines with high quality standards and reasonable prices,” stated the report. Hanoitimes

Ngoc Thuy

VN's pharmaceutical import turnover may reach $3 billion by end of year

VN's pharmaceutical import turnover may reach $3 billion by end of year

With the average pharmaceutical import turnover of $245 million per month, the figure of the whole year of 2019 may reach $3 billion, equaling 50 per cent of the whole scale of the market.  

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.

MORE NEWS

Use of e-cigarettes by youth rockets with easy availability at shops

Many students and young people have been hospitalized in a deep coma after using e-cigarettes, which are easy to buy.

How will telecom carriers fare in a highly competitive market?

The traditional telecom market is getting saturated and facing upheavals, including a drop in revenue from traditional calls and SMS, a tighter management policy and changes in technology.

Number of international visitors to Vietnam sets 'record' after pandemic

Vietnam welcomed 2.95 million foreign visitors in January-November 2022, 21.1 times up year on year, but still down 81.9% compared with pre-pandemic levels in 2019.

Su-30MK2, Mi helicopters rehearse in Hanoi

On December 2, Su-30MK2 fighters performed in a rehearsal to prepare for the upcoming Vietnam International Defense Exhibition 2022.

Vietnam sends condolences over passing of former Chinese leader Jiang Zemin

Vietnamese leaders on December 2 cabled messages of condolences to Chinese leaders over the death of former General Secretary of the Communist Party of China (CPC) Central Committee and former President of China Jiang Zemin.

Ministry proposes canceling funding plans over disbursement delays

Disbursements of public funds sourced from foreign loans in the year through November had moved at a snail’s pace, reaching only slightly more than 25% of the full-year plan.

Hanoi to pilot bike rental service in six urban districts

Hanoi has approved a year-long pilot bike rental service programme in Hoan Kiem, Tay Ho, Dong Da, Ba Dinh, Hai Ba Trung, and Thanh Xuan districts.

Weightlifters hope for Olympic qualification from world championship

It was scheduled to be held in Chongqing, China, but this changed in March due to COVID-19 measures in China. The new location was announced in April.

Striker Nguyen Van Quyet named best player of 2022 V.League 1

Striker Nguyen Van Quyet received a statue for the most valuable player of the 2022 V.League 1 season at a V.League Awards ceremony organised on December 1 in Hanoi.

Meteor shower to light up Vietnamese skies on December 13

Local sky gazers will have a rare opportunity to witness the peak of the Geminids meteor shower, with the astronomical event set to occur between midnight on December 13 and the morning of December 14.

Da Nang wins Best Vietnam Smart City Award for third time

The central city of Da Nang has been granted the Best Vietnam Smart City Award 2022, the third time so far.

Newly-established, re-operating enterprises up over 33% in 11 months

Vietnam saw nearly 194,700 newly established and re-operating enterprises in the first 11 months of 2022, up 33.2% over the same period in 2021, a 1.3 times higher than the average rate in January – November period from 2017 - 2021.

Politburo members discuss review of resolution on HCM City development

Party General Secretary Nguyen Phu Trong on December 2 chaired a Politburo meeting on a project to review the 10-year implementation of a resolution on the orientations and tasks for the development of HCMC until 2020 and 2030, with a vision to 2050.

Exporters face tax unless they cut greenhouse gas emissions

Exports to the EU market will become more expensive unless enterprises implement greenhouse gas emission cuts. This will affect the competitiveness of many Vietnamese export companies.

Some of the best fishing lakes in and around Hanoi

Here are some of the most popular fishing lakes near Hanoi. On weekends, the number of people flocking to commercial centres, pedestrian streets or entertainment areas in the inner city of Hanoi has increased.
back_to_top