Updated on 30 May 2014
Foreign pharmaceutical companies dominate the market and are able to maintain premium revenue
Singapore: Pharmaceutical market in Vietnam is set to increase in value by $5 billion over the next six years, reaching a net worth of $8 billion by 2020 and representing an impressive compound annual growth rate (CAGR) of 15.4 percent, according to research and consulting firm GlobalData.
The analysis company reports that scarcity of low-priced generic drugs, combined with a belief among Vietnamese doctors that patent-protected branded drugs are more effective, means that foreign pharmaceutical companies dominate the market and are able to maintain premium revenue.
In 2005, innovator drug prices in Vietnam were 8.3 times higher than international reference prices. Although 2009 saw the Vietnamese government introduce the New Health Insurance Law for universal coverage by 2020, as well as make it a legal requirement for all of its pharmaceutical production facilities to operate with Good Manufacturing Practice certificates, prospects for generic and locally-manufactured drugs remain limited.
Mr Joshua Owide, Director-Healthcare Industry Dynamics, GlobalData said, "A preoccupation with generic drugs and low investment in research and development means that domestic pharmaceutical companies are at a distinct disadvantage when competing against imports from multinationals."
This is despite the fact that Vietnam is one of the fastest growing economies in the Southeast Asia region, with its Gross Domestic Product (GDP) having increased significantly in value from $101.6 billion in 2008 to an estimated $170.6 billion in 2013.