Vietnam’s Pharmaceutical Industry: Current Landscape and Future Outlook

The pharmaceutical sector in Vietnam has witnessed substantial growth and transformations in the past two decades. Government health policies have played a pivotal role in accelerating the development of Vietnam’s pharmaceutical industry, leading to a significant increase in its market size—from USD 5.4 billion in 2018 to an estimated USD 6.5 billion in 2021. According to a KPMG report, the industry is poised for sustained growth at a rate of 15-20%, projecting an impressive output of over USD 26.8 billion by 20451.

Market Dynamics:

Vietnam’s pharmaceutical industry stands out as one of the fastest-growing markets in the Southeast Asian region. Factors contributing to this growth include escalating economic prosperity, a rise in income per capita, and an aging population. However, despite this rapid expansion, the country’s production capacity currently meets only 53% of the domestic pharmaceutical demand. Consequently, Vietnam has been increasing its spending on pharmaceutical imports, with the import cost escalating from USD 2.8 billion in 2018 to USD 4 billion in 2021. Additionally, the scope of pharmaceutical research and development in Vietnam remains confined to generic medicines, simple dosage forms, and functional foods.

National Strategy for Development (2021-2030):

To chart the future course of the pharmaceutical industry, the Deputy Prime Minister approved the ‘National Strategy for Development of Vietnam’s Pharmaceutical Industry to 2030‘ on October 9th, with a vision extending to 2045. This strategic plan aims to enhance research capacity, optimize existing technologies, and position Vietnam as a center for manufacturing and technology transfer of generic drugs within the Association of Southeast Asian Nations (ASEAN).

The strategy outlines several objectives, including ensuring access to affordable medicines, improving research capacity for original brand-name drugs, becoming a regional center for manufacturing and brand-name drug development, and enhancing the pharmaceutical regulatory system to Maturity Level 4. Other goals involve the use of medicinal herbs, promotion of medicinal raw materials, optimization of medication usage, and digital transformation of industry.

Future Prospects in Vietnam’s Pharmaceutical Industry:

Vietnam’s pharmaceutical industry holds substantial promise with the strategic framework in place. While economic and demographic factors will contribute to growth, challenges such as regulatory compliance, intellectual property protection, and ensuring product quality and safety will shape the industry’s trajectory. The successful realization of Vietnam’s pharmaceutical industry potential hinges on effective navigation of both opportunities and challenges in the years ahead.

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