Pharmaceutical firms must increase their competitiveness by emphasizing research and development (R&D), production technologies, and digitalization.
According to analysts, this will enable them boost their portion of the domestic medication market, which remains dominated by imports, as well as their global reach.
Strong potential for expansion in the pharmaceutical business
The pharmaceutical market in Vietnam has great potential. The Health Ministry assessed the market to be worth US$6.9 billion (RM31 billion) in 2021, however BMI Research forecasts that the market would reach US$16.1 billion (RM72 billion) by 2026, growing at a CAGR of up to 11%.
According to Nguyen Dieu Ha, general secretary and office chief of the Vietnam Pharmaceutical Companies Association, as of the end of 2022, there were 55 foreign-invested pharmaceutical companies in Vietnam, 228 companies that met World Health Organization – Good Manufacturing Practice standards, and 12 companies that met high good manufacturing practice (GMP) standards.
Since 2017, when just two businesses were GMP-compliant, the Vietnamese pharmaceutical industry has made considerable strides, as evidenced by the data. Foreign pharmaceutical businesses exploit the domestic pharmaceutical market. Ha said that domestic medicine manufacture accounted for just 46% of overall medication expenditures by locals between 2015 and 2021. Although this rate grew dramatically compared to the rate of 17% from 2001 to 2011, it remained far below the global average.
“The local pharmaceutical sector has only been able to generate medications for treating common and chronic ailments,” he stated.
The pharmaceutical business has a high growth
The majority of pharmaceuticals manufactured in Vietnam are anti-infective (32.54%), antipyretic and analgesic (15.5%), and vitamins and minerals (6.5%). The majority of important medications are still imported. Mostly, domestic GMP-WHO companies create generic pharmaceuticals (copies of brand-name drugs).
Former vice-minister of health Le Van Truyen stated that Vietnam’s pharmaceutical sector lacks a robust and contemporary national R&D centre as well as clinical trial and biological research facilities on an international level.
In addition, there is no separate industrial park with a comprehensive ecology for pharmaceutical manufacture.
“The majority of pharmaceutical firms are small to medium-sized businesses with limited financial resources that have yet to create national pharmaceutical conglomerates,” he stated.
The bulk of local pharmaceutical businesses, according to Truyen, lack the resources to fully exploit the home market.
It would be exceedingly difficult to meet the aim of supplying 80% of the market demand for pharmaceutical items if no breakthroughs were achieved, he added.
Vietnam’s deputy director of the ministry’s drug administration, Ta Manh Hung, stated that local pharmaceutical companies are predominantly small-scale, that there are few domestically-produced pharmaceuticals, and that the scientific and technological substance of these products is low.
During the Covi-19 epidemic, these limits of the local pharmaceutical sector are underlined, he stated.
Like in many other developing nations, Vietnam’s spending on medication is on the rise, a natural consequence of rising wages and increased urbanization.
According to Ha, the average Vietnamese would spend $73 (RM327) on pharmaceuticals in 2021, up from $6.70 (RM30) in 2002.