Pharmaceutical Industry in Vietnam
Vietnam’s large and fast growing population, which is expected to reach 96 million by 2019, makes the country one of the fastest growing pharmaceutical markets in Asia. In 2012, Vietnam’s drug market was worth almost $3 billion – about one-third the size of the Indian market. It is expected to grow at a rate of more than 20 percent through 2017. According to Business Monitor International, Vietnam ranks 13 of 175 countries for the fastest growing global markets in drug spending.
Drug consumption per capita in Vietnam is also climbing. Health ministry statistics show that the country’s total medicine consumption value was more than US$2.43 billion in 2011, of which only $1.14 billion, or less than half, came from domestic medicine. The average drug expense per capita was $27.6 in 2013. This compares to $148 in China and $51 in India. The Ministry of Health forecasts that the size of the Vietnam pharmaceutical market will exceed US$2.0 billion with with per capita spending on drugs more than doubling from current levels in 3 years. That increase is fueled by a richer and older society and by an expansion of the country’s national health insurance system. Today, 65 percent of Vietnam’s 89 million people are covered by the national system. By 2020, that number will reach 90 percent.
Local pharmaceutical production accounted for nearly half of Vietnam’s drug needs in 2012. However, those products were almost all low-cost generics. Imports account for more than 70 percent of the pharmaceuticals market by value during the same year. Most of the high value drug products in Vietnam are imported. According to statistical data released by Vietnam General Statistic Office, Vietnam’s import value of pharmaceutical and medicinal products reached USD 1.79 billion in 2012, or 12.5% increase year on year.
In 2012, there were about 170 pharmaceutical companies in Vietnam. Almost ten percent were owned by foreign investors, with another four percent operating under joint venture agreements. The largest drug companies in terms of market share include GlaxoSmithKline, Bristol Myers Squibb and Novartis. There are quite a lot of big local producers, not limited to the following ones: Hau Giang Pharmaceutical, Domesco, Imexpharm, Pymepharco, Phytopharma, Sapharco, Savipharm and Cagipharm.
To boost domestic production of higher-quality drugs, Vietnam has recently encouraged manufacturers to obtain Good Manufacturing Practice (GMP) certification. However, only about a third of Vietnamese pharmaceutical companies have GMP certification today.
pharma12Dec08 : “No pain, no gain”, Jaccar Equity Research, 12 Dec 2008.
PharmaJun09 : Pharmaceutical Industry Report, BaoViet Securities, Jun 2009.
PharmaJul11 : “Vietnam Pharma Industry: Intermediate stage but fast growth”, BaoViet Securities, Jul 2011.
pharma3Apr14 : Vietnam Pharmaceutical Industry, VP Bank Securities, 3 Apr 2014.
pharmaApr14 : “High quality generics”, FPT Securities, Apr 2014.