Vietnam’s pharmaceutical market reaches $7B

Vietnam’s pharmaceutical industry has experienced high growth over the past 10 years, with a compound annual growth rate of 7.3%.

According to the Drug Administration of Vietnam under the Ministry of Health, the current Vietnamese pharmaceutical market is approximately $7 billion, with an average drug consumption of $70 per capita, a 10-fold increase compared to 2000, Le Van Truyen, Chairman of the ministry’s Advisory Council for the issuance of the Certificate of Registration of Drugs-Medicinal Ingredients announced during a seminar in Hanoi on Wednesday.

Vietnam is currently among the countries with the highest total value of the pharmaceutical market and fastest industry growth worldwide. The total value of Vietnam’s pharmaceutical market reached $2.7 billion in 2015, increased to $5.1 billion in 2018, and $6.1 billion in 2020.

According to the World Health Organization (WHO) classification, Vietnam’s pharmaceutical industry is at level 3, which means it has a domestic pharmaceutical industry, generic drug production, and the ability to export some pharmaceuticals.

“However, Vietnam’s pharmaceutical industry is facing many challenges and difficulties as the country increasingly integrates into the global economy,” said Truyen.

Vietnam currently has only 17 out of 250 factories meeting the Advanced Good Manufacturing Practice (GMP), a WHO system for ensuring that products are consistently produced and controlled according to quality standards and more than 200 meet the GMP standards.

Vietnam also lacks centralized pharmaceutical-industrial zones with an ecosystem that includes: research and development centers, bioavailability-bioequivalence testing facilities, clinical trial facilities, testing facilities, pharmaceutical production plants, packaging manufacturing plants, and related service centers specifically for the pharmaceutical industry, he said.

In terms of financial capacity, most domestic pharmaceutical companies are small-scale with low revenues, and there are no large-scale national pharmaceutical corporations. Financial resources for new investments are very limited.

Digital transformation is also a significant challenge for Vietnamese pharmaceutical companies in the context of the ongoing 4.0 industrial revolution.

Attending the seminar, Vo Thi Tuan Anh, chairwoman of Hanoi-based Newtechco Group, which operates in the field of production of drugs, pharmaceutical chemicals and medicinal materials, assessed that the healthcare sector had made remarkable progress in recent times, proactively securing pharmaceutical sources and equipment.

However, due to the increasing market demand and the constant threat of epidemics, supply chains may be disrupted. Additionally, rising transportation and supply costs will make pharmaceutical and medical equipment sources scarce, leading to higher prices and seriously affecting medical examination and treatment for the population.

Regarding those challenges, Truyen suggested the need for strong investment policies in infrastructure and enhancing the production capacity of existing pharmaceutical factories. At the same time, preferential treatments should be provided to pharmaceutical companies to build and develop new factories, particularly for biological/biosimilar drug production.

Vietnam’s pharmaceutical industry is considered a key industry that requires concentrated resources for strong development. Vietnam aims to become a high-value pharmaceutical manufacturing center in the region by 2030, with the value of domestically produced drug exports reaching about $1 billion.