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| Workers on a medicinal herb farm in Thanh Hoá Province. — Photo baotintuc.vn |
Experts have highlighted the need for greater efforts from both the State and businesses to achieve the sustainable development of Việt Nam’s pharmaceutical industry.
Việt Nam is currently among the countries with the highest pharmaceutical market value and growth rate globally. In 2023, the country’s pharmaceutical market was valued at approximately US$7 billion, with average consumption reaching US$70 per capita –10 times higher than in 2000.
Over the past decade, the domestic pharmaceutical industry has enjoyed significant growth, with a compound annual rate of 7.3 per cent.
According to the World Health Organisation’s classification, Việt Nam’s pharmaceutical industry is at level 3, indicating its capability to produce generic drugs and export certain pharmaceutical products.
Under the national strategy for developing Việt Nam’s pharmaceutical industry until 2030, with a vision to 2045, the country aims to become a key hub for the manufacturing, processing, and technology transfer of brand-name drugs, particularly in Southeast Asia.
Additionally, the strategy seeks to elevate the domestic pharmaceutical industry to WHO level 4, with a goal of contributing over $20 billion to the country’s GDP by 2045.
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| Technicians in a lab at DHG Pharmaceutical. — Photo dhgpharma.com.vn |
The strategy also targets domestic medicine production to meet about 80 per cent of the country’s demand for medicines, representing 70 per cent of the market value, and to produce 20 per cent of the raw materials required for domestic drug production.
By 2045, Việt Nam envisions that domestically produced drugs will not only meet local demand but also significantly increase for export. The nation is committed to deep integration into the global pharmaceutical supply chain as outlined in the strategy.
Alongside the strategy, the Government has submitted a draft law to amend the 2016 Pharmacy Law. Expected to be approved later this year, the law will introduce various policies and guidelines aimed at advancing the pharmaceutical industry.
Lê Văn Truyền, associate professor, PhD, former Deputy Minister of Health, said that the strategy and the amended law presented significant opportunities for the development of Việt Nam’s pharmaceutical industry in both the short and long term.
Challenges remain
Truyền, however, noted that Việt Nam’s pharmaceutical industry was facing numerous challenges, especially as the country integrates with the global economy.
Among these challenges are the industry's low material-technical-technology base and the absence of concentrated pharmaceutical and biopharmaceutical industrial parks, according to Truyền. Such parks, complete with ecosystems that include research and development centres, bioequivalence and bioavailability testing facilities, clinical trials, and pharmaceutical and packaging factories, are essential for sustainable growth.
Meanwhile, most domestic pharmaceutical companies remain small in scale with limited sales, and there are no national-scale pharmaceutical corporations. Digital transformation also poses a significant challenge for many drug businesses.
He predicted that the shift in the pharmaceutical market structure from chemical drugs to biological and biosimilar drugs would accelerate rapidly in the coming years.
Truyền emphasised the need for Việt Nam to enhance its research capacity and technology application in drug production, aiming to become a centre for manufacturing, processing, and technology transfer. He urged businesses to proactively produce specialised drugs, new treatments, vaccines, and medical biological products.
Truyền also suggested that each business should reconsider, adjust, and adapt its medium- and long-term development strategy in line with the State's guidelines and the evolving international and domestic business environment to improve the competitiveness of Việt Nam’s pharmaceutical industry.
According to Trần Thị Thư, vice president of the Vietnam Pharmaceutical Business Association, domestic businesses should leverage internal resources to thrive. She recommended that small firms focus on key products, avoiding duplication with larger enterprises with more advanced production lines.
Thư said that newly established or EU-GMP-certified businesses could target the ETC market segment (drugs distributed to hospitals), specialising in products such as vaccines, biological products, and medicinal ingredients.
She also suggested that businesses should capitalise on free trade agreements (FTAs) to collaborate with foreign investors, thereby producing pharmaceuticals with high technical content.
Meanwhile, Võ Thị Tuấn Anh, president of Newtechco Group, underscored the importance of building an ecosystem that encompasses product research, the application of new technologies in pharmaceutical production, and the development of widespread distribution channels, particularly as most drug enterprises have limited financial resources and scattered operations.
Anh highlighted her group's efforts to attract financial resources, international investors, and technology experts for the pharmaceutical and biopharmaceutical industrial park project in Thái Bình Province. This would be the first project of its kind in Việt Nam, dedicated to the development of the pharmaceutical and biopharmaceutical industry.
It aims to be a hub for experts in biotechnology and pharmaceutical chemistry, fostering production investment, technology transfer, training, and startup incubation in the industry.
Experts agree that collaborative ventures with foreign partners will be crucial in enhancing domestic capabilities, fostering innovation, and increasing the competitiveness of Vietnamese pharmaceutical products, especially as Việt Nam encourages domestic companies to integrate into the global pharmaceutical supply chain. VNS
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Pharmaceutical sector sees gloomy performance in Q2/2024
Most pharmaceutical companies struggled to improve their business performance in the second quarter of this year, with some even reporting losses due to high operating costs.
In Q2, DHG Pharmaceutical JSC (DHG) reported a 4 per cent year-on-year decline in net revenue to over VNĐ1.1 trillion, attributed to decreased purchasing power. The company’s after-tax profit also dropped 27 per cent year-on-year to VNĐ192.4 billion, according to thuonggiaonline.vn.
For the first half of this year, DHG’s pre-tax and after-tax profits reached VNĐ463 billion and VNĐ415 billion, respectively, down by 32 per cent and 33 per cent compared to the same period last year, the company’s financial statement shows.
Similarly, Vidipha Central Pharmaceutical JSC saw its accumulated profit decline by 30 per cent year-on-year to over VNĐ33 billion in H1, mainly due to a sharp decrease in sales and service revenue in Q2 compared to the previous year.
Another firm, Traphaco, reported an after-tax profit of over VNĐ132 billion in H1, down 16 per cent year-on-year, partly due to skyrocketing production costs. VNS
