Workers process products at Hau Giang Pharmaceutical Company (Photo: taichinhplus.vn)

Hanoi (VNS/VNA) -
Vietnamese pharmaceutical companies are optimistic about the business prospects of the sector, with nearly 80 percent of firms anticipating an annual industry growth rate of more than 10 percent.

This information was gathered in a survey released alongside a list of the top 10 most prestigious pharmaceutical companies in the country by Viet Nam Report Company (VNR) on December 26 in Hanoi. The report compiled information from the IQVIA Institute for Human Data Science, the World Bank and market research firm Nielsen.

The IQVIA Institute for Human Data Science listed Viet Nam as a “pharmerging market” because its population is entering an aging stage. The World Bank warns that Vietnam is experiencing rapid population aging. The proportion of the population aged 65 and over was 6.5 percent in 2017 and is expected to reach 21 percent by 2050, causing an increasing demand for healthcare. Nielsen reported health was one of the top two concerns of Vietnamese consumers in 2018.

In addition, Vietnamese people have been paying more for healthcare services due to increasing average income per capita coupled with rising environmental pollution that causes diseases.

Statistics from the Vietnam Drug Administration under the Ministry of Health showed the industry would continue to experience double-digit growth over the next five years and would reach 7.7 billion USD in 2021.

However, all of the surveyed firms said their biggest difficulty was their reliance on imported materials. In 2017, Vietnam imported 375 million USD of materials for pharmaceutical production, 78 percent of which from China and India.

There has not been significant investment into traditional medicines to reduce reliance on imported products even though the country has a rich supply of medicinal herbs.

The survey also revealed many big local and foreign businesses have rushed to invest in the country’s pharmaceutical sector due to its huge potential.

Euromonitor International said the average spending on drugs in Vietnam was at 49.9 USD per capita in 2016, one-third of the global average.

The market potential has been attractive to foreign groups such as Abbott, which owns 51.7 percent of shares in Domesco, bought Glomed Pharmaceutical, Taisho (which has 34.3 percent at Hau Giang Pharmaceutical Joint Stock Company) and Stada Service Holding BV. Local companies such as Vingroup, FPT, Masan Group, Vinamilk, The gioi Di Dong and Digiworld have also jumped into the sector.

Several local firms have sought ways to co-operate with foreign companies to take advantage of available markets and distribution channels instead of directly competing. Cooperation can help domestic firms attract capital and gain technologies and experience from big global groups.

The list of the 10 most prestigious pharmaceutical companies was based on three criteria: financial capacity and performance on audited financial reports last year, communication prestige, quality product and distribution.

Most of the companies in the list have stable financial capacity, long-term experience and potential for growth as well as high quality products and wide distribution.-VNS/VNA