return icon

Support for domestic pharmaceutical industry to rise in Vietnam

The Vietnamese Government's support for the local pharmaceutical industry will remain steadfast, according to Fitch Solutions.

Domestic pharmaceutical firms will play an increasingly dominant role in Vietnam. Photo

Under a report released last week, the UK-based financial information group said this was in part driven by the authorities' push to meet domestic healthcare needs. In addition, the economic potential of the pharmaceutical sector will incentivise continued Government support for the domestic industry.

Although the Government aims to increase the share of locally produced pharmaceuticals to 80 per cent, an average of 55 per cent of medicines in Vietnam are imported every year.

One of the reasons for Vietnam’s reliance on imports is that most domestic companies lack research and development capabilities, and do not meet the European Union Good Manufacturing Practice (EU-GMP) or Pharmaceutical Inspection Co-operation Scheme Good Manufacturing Practice (PIC/S-GMP) standards required to manufacture high-quality generic drugs. Further, Vietnam imports more than 90 per cent of drug inputs, half of which are from China.

According to Fitch, partnerships with local firms are integral. As a result of Government initiatives, domestic pharmaceutical firms will play an increasingly dominant role in Vietnam.

“This accentuates the need for multinational pharmaceutical companies to partner with local drugmakers to adapt to this trend. Finding a local company to start such a joint venture is an important first step to enter the market in Vietnam,” Fitch said.

Foreign companies often work with domestic companies, such as Diethelm Vietnam, Zuellig Pharma Vietnam, and Mega Lifesciences, to fill in different needs in the supply chain.

Fitch forecast a shift from pharmaceutical production to a more research-based industry was likely. The boost in attractiveness of the Vietnamese market comes at a time when the business environment for drugmakers in neighbouring countries has not been favourable. In December 2018, Indonesia enacted a regulation for the compulsory licensing of every medical product that is not being made in the country.

“This is expected to have significant negative consequences for foreign direct investment in the country, with Vietnam being the one of the beneficiaries of pharmaceutical companies shying away from Indonesia. This, combined with the geopolitical position of Vietnam, place the country in a favourable position to become a regional pharmaceutical research and export hub,” Fitch said.

In July 2019, Pharma Group, the Pharmaceutical Sector Committee of the European Chamber of Commerce in Vietnam, highlighted that the country has the ability to reach a higher position in the value chain of the science and life sector in comparison with other countries in the ASEAN region. However, it was noted that further deliberation is required before the positive steps taken by the country can materialise.

However, Fitch noted, Vietnam’s pharmaceutical industry also faced challenges in foreign investment.

“We note that despite our positive outlook on the pharmaceutical market, significant risks remain. There are a number of shortcomings, including underdeveloped infrastructure, lack of staff and finance, and low healthcare access among people in rural and remote areas. Access to medicines will remain a key challenge for pharmaceutical companies seeking to capture the commercial prospects in Vietnam as the population is highly ruralised. Patients continue to face challenges over medical access and rising out-of-pocket healthcare costs.”

Moreover, it said, there are large regional variations with regards to the number of healthcare facilities, doctors and beds between the rural and urban regions of the country, which exacerbates these access issues.  VNS

Ups and downs in pharma industry due to crucial supply chain hiccups

Ups and downs in pharma industry due to crucial supply chain hiccups

After months of challenges and faults in the global ingredient supply chain, peaks and valleys are the landscape for Vietnamese drug giants in their first-half performance, 

Vietnam pushes for medicine self-sufficiency post Covid-19: Fitch Solutions

Vietnam pushes for medicine self-sufficiency post Covid-19: Fitch Solutions

The Vietnamese government intends to meet 80% of its domestic pharmaceutical demand through local drug manufacturers.


Aviation ground services to go-green to meet compliance

The Civil Aviation Authority of Vietnam (CAAV) is collecting comments on a draft circular stipulating that all businesses in the sector must have a plan to convert ground vehicles from fossil fuels to electric.

President visits, offers condolences to widow of late PM Abe Shinzo

President Nguyen Xuan Phuc visited and offered condolences to Abe Akie, the widow of late Japanese Prime Minister Abe Shinzo, at her home on September 28.


US firm pours capital in cross-border e-commerce project in Binh Duong


PM requests prompt measures to overcome Typhoon Noru’s consequences

Dim outlook for domestic auto component industry

Vietnamese automotive component industry has a dim outlook for growth as it lags behind those in many other regional countries, according to the Ministry of Industry and Trade (MoIT).

Animated series seeks to change stereotypes on Vietnamese products

Wolfoo, a YouTube children’s animated web series, which has reached more than 2 billion views a month, has changed the world’s stereotypes on Vietnamese products.

VN banking prospects from now to the end of the year

Under the circular, the State Bank of Vietnam told banks to reschedule debt repayments to help customers affected by the COVID-19 pandemic until June 30 this year.

JPMorgan: 65% of AirPods production to be located in Vietnam in 2025

JPMorgan analyst expects 20 percent of iPad, 5 percent of MacBook, 20 percent of Apple Watch and 65 percent of AirPods production to be located in Vietnam in 2025.

US$2.3 billion withdrawn from stock market, investors begin to worry

Concerns are increasing in the stock market after the State Bank of Vietnam (SBV) raised regulating interest rates and withdrew VND56 trillion (over US$2.3 billion) last week.

Teacher Nguyen Ngoc Ky writing with feet passes away

This morning, 75-year-old teacher Nguyen Ngoc K, who inspired many generations of students with his determination to rise up in life, passed away at his home in Thu Duc City.

Typhoon Noru passes through central Vietnam

Super typhoon Noru swept through central Vietnam on September 27 night and early September 28, bringing strong winds and torrential rains.

Discovering craft villages in Buddhist centre in Quang Ninh

Coming to Yen Tu relic site in Quang Ninh province – Vietnam’s major Buddhist centre, tourists can also experience traditional crafts such as making hats, bamboo handicrafts, and wood carvings.

Ministry drafts mechanism to adjust average retail power price

The Ministry of Industry and Trade (MoIT) is drafting a Prime Minister's Decision on the mechanism for adjusting the average retail electricity price.

Foreign investment disbursement hits record high in nine months

Disbursement of foreign direct investment (FDI) in the first nine months of this year reached 15.4 billion USD, up 16.2 % year-on-year and marking a record high, a report from the Foreign Investment Department (FIA) has shown.

Foreign Minister Bui Thanh Son pays visit to Germany

Minister of Foreign Affairs Bui Thanh Son paid an official visit to Germany from September 26-27 at the invitation of his German counterpart Annalena Baerbock.