The Vietnam’s pharmaceutical market is on positive trend, with revenue from the domestic market of 5.2 billion USD, according to statistics of the Business Monitor International (BMI), up 10% compared to the previous year and is expected to grow in two-digit numbers in the next 5 years. According to consulting firm GlobalData, this number is estimated to be 6.6 billion USD by 2020.
Vietnam's pharmaceutical market is expected to reach 6.6 billion USD by 2020.
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According to survey at Vietnamese pharmaceutical companies, more than 75% of enterprises forecasted the growth rate of the pharmaceutical market to be over 10%, while the remaining chose the growth rate under 10% and none chose unchanged or worse than 2016, which showed enterprises are putting expectation on an effective business year of 2018.
Vietnam’s pharmaceutical market is considered as a high potential market for foreign investors and world’s leading corporation, even for domestic enterprises operating in other fields.
In 2018, the pharmaceutical market is expected to transform significantly with the participation of leading retailers such as The Gioi Di Dong, FPT Retail, Digiworld, Nguyen Kim. Besides, the presences of foreign pharmaceutical corporations into the production phase in Vietnam such as Sanofi, Taisho, or Abbott also put huge pressure on domestic enterprises. Therefore, fierce competition is expected to happen at every market segment.
While the Vietnamese market is seen as attractive for pharmaceutical companies, drug prices are high compared with average incomes, which may hinder patient access to medicine. However, foreign pharmaceutical companies are able to generate more revenue not only due to patent protection, but also because locals believe imported drugs are much more effective and tend to prefer them over generics.
Domestic pharmaceutical companies focus mainly on generic drugs, with very low expenditure on R&D. This restricts the scope of domestic companies’ operations, forcing them to establish themselves either within Vietnam or through exports. At present, the five leading pharmaceutical companies in Vietnam are Sanofi, Hau Giang Pharmaceuticals (DHG Pharmaceuticals), Imexpharm, Traphaco and Domesco.
In particularly, in the context of industrial revolution 4.0, the government should have policies to encourage enterprises applying new technologies and improving productivity, as these are considerable factors to enhance the competitiveness of the national pharmaceutical industry in the future.
