Vietnam’s rising healthcare spending and the replacement of imported drugs with made-in-Vietnam ones in healthcare facilities are a big and inevitable trend, stated Viet Dragon Securities Company (VDSC).
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According to UNFPA, although Vietnam is still a young country, the population entered the "aging phase” in 2017. A report from the World Bank warned that aging will likely hit Vietnam with full force within a very short span of time. This transition would come in a mere 15 years and be completed well before the 2040s. An aging population means more spending on pensions and healthcare.
Sales of the Vietnam pharmaceutical market is USD5.3 billion, of which sales to hospitals account for 70%, according to BMI. Moreover, VDSC expected the government would need to increase the spending for healthcare in the next few years. It is what happened in China and is very likely to happen the same in Vietnam, VDSC predicted. This trend should favor manufacturers focusing on the hospital channel.
Experts said as rising spending for healthcare is only a matter of time, the government needs to control costs. This will also help control inflation of healthcare. Therefore, reducing treatment cost and improving efficiency in healthcare facilities are a must. One solution is to encourage domestic drugs usage instead of imported ones. To do so, the government has been working on a series of policies to give preferential status for locally manufactured drugs for hospital purchases.
VDSC listed out potential risks to Vietnam’s pharmaceutical market, including policy risks, as the industry is heavily policy dependent. Moreover, new free trade agreements (FTAs) coming into effect to would lower the imported tax for foreign drugs.
Additionally, high input price will likely remain due to the environment protection act from China.
