ADC Pharma in Can Tho city. As the domestic pharmaceutical market holds a lot of potential, local producers are urged to improve their competitiveness for expansion. (Photo: VNA) According to experts, this will help them expand their shares in the domesticmarket which remains being dominated by imported drugs and extend theirinternational reach.
Vietnam’s pharmaceutical market has significant potential. The Ministry of Healthestimated the market at 6.9 billion USD in 2021 while BMI Research forecast themarket to reach 16.1 billion USD in 2026 with a compound growth rate of up to11%.
According to Nguyen Dieu Ha, general secretary and office chief of the VietnamPharmaceutical Companies Association (VNPCA), there are 55 foreign-investedpharmaceutical companies in Vietnam as of the end of 2022, 228 companiesmeeting World Health Organisation – Good Manufacturing Practice (WHO-GMP) and12 meeting high GMP standards of the EU, Japan, PIC/S and TCA.
These figures show that the pharmaceutical industry of Vietnam has made asignificant improvement since 2017 when there were only two companies meetingGMP.
Still, the domestic pharmaceutical market is a playground for foreignpharmaceutical companies. Ha pointed out that domestic drug production onlyaccounted for 46% of the total spending on drugs of local people in the 2015-21period. Although this rate increased significantly compared to the rate of 17%in the 2001-11 period, it was still much lower than the world average.
The domestic pharmaceutical industry has not been able to produce specificdrugs, only drugs for the treatment of common and chronic diseases. Made-in-Vietnampharmaceutical products are mostly anti-infective (32.54%), antipyretic andanalgesic (15.5%) and vitamins and minerals (6.55%).
Most essential drugs must still be imported. Domestic GMP-WHO factories mainlyproduce generic drugs (copies of brand-name drugs).
Le Van Truyen, former deputy minister of Health, said Vietnam’s pharmaceuticalindustry does not have a strong and modern national R&D centre and lacksinternational-level clinical trial and biological research centres. In addition,there is no separate industrial park for pharmaceutical production with acomplete ecosystem.
Most pharmaceutical companies are of small and medium sizes with limitedfinancial capacity and have not yet formed national-scale pharmaceuticalcorporations, he said.
Truyen said a majority of domestic pharmaceutical companies lacked resources toexploit the domestic market. The goal of providing 80% of the market demand forpharmaceutical products would be very difficult to achieve if no breakthroughswere made, he said.
Ta Manh Hung, Deputy Director of the ministry’s Drug Administration of Vietnam,said that domestic pharmaceutical producers are mostly of small scale, thereare few domestically-produced products, the content of science and technologyin products is not high.
Those are limitations of the domestic pharmaceutical industry which arehighlighted during the COVID-19 pandemic, he said.
Potential
As in many other developing countries, Vietnamese spending on medicines isincreasing, an inevitable trend when incomes improve along with rapidurbanisation.
According to Ha, each Vietnamese spends an average of 73 USD on medicines in2021, up from just 6.7 USD in 2002. With a population of around 100 million, ofwhich, people aged from 65 and over account for 11.9%, the spending on drugs isanticipated to grow at a faster pace, especially after the COVID-19 pandemicwhich makes people more concerned about health issues.
Under the pharmaceutical industry development programme to 2030 with a visionto 2040 which the Government approved in March, Vietnam set a goal that by2025, domestically-produced drugs account for 75% of the market consumptionvolume and 60% of the value, and by 2030 80% and 70%, respectively.
In addition, Vietnam aimed to become a high-value pharmaceutical productioncentre of the region with an export value of 1 billion USD.
To achieve these targets, the core issue is that domestic producers mustimprove their competitiveness in line with the development orientations of thepharmaceutical industry, Truyen said.
Truyen pointed out that drug producers around the world have changed theirmarket access strategies from promoting products to supporting the Stateagencies in disease control and proactively providing healthcare services. Thedigital transformation process helps a lot in decision-making, which domesticdrug producers could learn from.
Notably, the pharmaceutical industry has increasing requirements forinformation transparency, including management regulation, registration recordsand research data. Big organisations also require regulations on dataintegrity/truthfulness in all stages from testing to production anddistribution.
Accordingly, Vietnamese drug producers must pay special attention totransparency to increase competitiveness in both home and foreign markets, Truyensaid.
The Government must create an open and favourable legal environment so thatlocal producers could go together for mutual development./.
VNA
