Report Overview

Vietnam Pharmaceuticals Market - Industry Trends & Forecast Report, 2029

Vietnam pharmaceuticals market size was estimated at USD 10.62 billion in 2022. During the forecast period between 2023 and 2029, the size of Vietnam pharmaceuticals market is projected to grow at a CAGR of 6.22% reaching a value of USD 16.2 billion by 2029. Major growth drivers for the Vietnam pharmaceuticals market include the growing population, rising burden of chronic diseases, improving healthcare infrastructure, and supportive government policies. Notably, Vietnam stands as one of the world's fastest-growing economies, hosting a population of over 95 million individuals. Within this context, Vietnam holds a significant position as a major hub for pharmaceutical products and services. This dynamic is further accentuated by a shifting demographic landscape characterized by an aging population and the ascent of a burgeoning middle class. As the population continues to age, there is a surging demand for healthcare services and pharmaceuticals. Also, the upward trajectory of the middle-class purchasing power contributes to an amplified allocation of financial resources towards healthcare expenditures, thereby fostering an increasingly robust pharmaceutical market. Correspondingly, akin to its peers in the developing world, Vietnam grapples with a rising prevalence of chronic illnesses encompassing diabetes, cardiovascular diseases, cancer, and respiratory ailments. This surge in chronic conditions finds its roots in sedentary lifestyles, suboptimal dietary habits, and environmental factors. In response to this escalating demand, the pharmaceutical market is witnessing a surge in the need for interventions that address and manage these chronic diseases. Consequently, the market's expansion is propelled by the rising demand for pharmaceutical products that cater to these pressing healthcare challenges.

Vietnam Pharmaceuticals Market – Overview

Vietnam pharmaceuticals market refers to the sector encompassing the development, manufacturing, distribution, and sale of pharmaceutical products, encompassing prescription and over-the-counter medications, medical devices, and related healthcare services. This market is influenced by factors such as the country's healthcare infrastructure, government regulations, economic conditions, and population dynamics. It involves diverse stakeholders, including domestic and international pharmaceutical companies, healthcare providers, regulatory bodies, and consumers, contributing to the production, accessibility, and utilization of pharmaceutical goods and services within Vietnam.

Vietnam Pharmaceuticals Market

Growth Drivers

Growing Healthcare Demand

The rising healthcare demand in Vietnam's market, with its population exceeding 98 million and an average life expectancy of about 76 years, signals a significant trend. Approximately 30 percent of the population, equivalent to 30 million individuals, can afford pricier Western medicines, akin to Australia's populace. Strengthening this dynamic, neighboring markets like Thailand, Malaysia, Cambodia, Laos, and Singapore contribute to a collective market of 280 million individuals. Vietnam's pharmaceutical sector flourishes due to economic growth, increasing per capita income, and an aging population. The World Bank notes that in 2020, over 7.6 million Vietnamese were aged 65 and above, nearly 7.9% of the total population, projected to reach 18.1% by 2049. Healthcare coverage surged from 60% in 2010 to 90% in 2019, as per the Vietnam Social Insurance Agency. Swift urbanization, with a 37% in 2020, equates to about 36.6 million urban residents in 2021. Urbanization has fostered a preference for private pharmacies, as revealed by the EU-Vietnam Business Network (EVBN), where 80% opt for self-medication. A complex landscape of 250 manufacturing plants, 200 import-export facilities, 4,300 wholesale agents, and over 62,000 retail agents characterizes the pharmaceutical domain. To cater to surging demand, major players such as Hau Giang Pharmaceutical, Bidiphar, Imexpharm, and Pymepharco, are actively upgrading facilities. Notably, Hai Duong province's collaboration with Indian entities on a USD 10–12 billion pharmaceutical park covering 900 hectares signals a significant stride towards future industry growth.

Government Initiatives

Vietnam's healthcare transformation via government initiatives has enhanced accessibility, impacting the pharmaceutical sector positively. Investments in medical institutions streamlined patient care. Government’s commitment is evident through policies nurturing domestic drug production, reducing import dependence, and fostering research. Aligned with global agreements, such as CPTPP, foreign pharmaceutical engagement diversifies products and stimulates innovation. Increasing health awareness fuels wellness product demand, positioning Vietnam's pharmaceutical market as a global contender. Crucial government actions include streamlined regulations, foreign investment attraction, and expedited drug approvals. Enhanced intellectual property rights drive R&D investment and innovative drug introductions. As the economy expands, improved healthcare infrastructure and growing middle class demand drive significant pharmaceutical market growth. Technological strides, including precision medicine and AI-driven development, further catalyze the sector's evolution, enhancing patient outcomes.

Restraints

Concerns regarding Counterfeit Drugs

Amidst the progress in Vietnam's pharmaceutical market, certain obstacles hinder its growth trajectory. Notably, the pivotal factors of pricing and affordability wield a profound impact on pharmaceutical product demand within the Vietnamese market. This sensitivity to pricing renders manufacturers to tread the delicate balance between profitability and equitable access across societal segments. However, the most pressing challenge remains the prevalence of counterfeit and substandard medicines, casting a shadow over Vietnam's pharmaceutical landscape. This pervasive issue transcends beyond mere economic implications, as it jeopardizes public health and erodes consumer trust in the pharmaceutical industry. The pervasive existence of counterfeit and low-quality products introduces substantial risks, spurring apprehension among consumers who are now wary of procuring medicines even from reputable sources. The menace of counterfeiting resonates as a paramount concern, warranting robust countermeasures to safeguard both public well-being and industry credibility.

Impact of COVID-19 on Vietnam Pharmaceuticals Market

COVID-19 pandemic had a mixed impact on the Vietnam pharmaceuticals market. While demand surged for essential medicines and preventive products, disruptions in supply chains and regulatory challenges emerged. Increased health consciousness and government support boosted local drug production. Telemedicine and digital health solutions gained prominence, transforming patient care. However, delayed clinical trials and shifts in healthcare priorities impacted R&D efforts. Despite challenges, the pandemic accelerated adoption of innovative strategies, reshaping the pharmaceutical landscape and highlighting the sector's resilience in navigating unprecedented circumstances.

Vietnam Pharmaceuticals Market

Segmental Coverage

Vietnam Pharmaceuticals Market – By Drug Type

By drug type, the Vietnam pharmaceuticals market is split into Generic Drugs and Branded Drugs segments. The generic drugs segment is expected to hold a higher market share during the forecast period by drug type. It can be attributed to its affordability, aligning with the price-sensitive nature of the market, and government initiatives that encourage their use to control healthcare costs and enhance accessibility. The prevalence of chronic diseases and the need for cost-effective treatments further drive demand for generic drugs, as expanding health insurance coverage and healthcare infrastructure amplify the search for economical yet effective options. With a robust domestic pharmaceutical manufacturing industry in place, local production of generic drugs is facilitated, reducing dependency on costly imported brands. This convergence of affordability, governmental support, disease prevalence, and a strong domestic manufacturing base establishes the generic drugs segment as a significant and dominant player in Vietnam's pharmaceuticals market.

Vietnam Pharmaceuticals Market – By Product Type

Based on product type, the Vietnam pharmaceuticals market is bifurcated into Prescription Drugs and Over The Counter (OTC) Drugs segments. The prescription drugs segment holds a higher market share in the Vietnam pharmaceuticals market by product type. Prescription drugs are favored for treating complex and chronic medical conditions, requiring medical supervision and tailored treatments. Regulatory requirements in Vietnam often mandate prescriptions for potent or specialized drugs to ensure patient safety and appropriate usage, thus contributing to the dominance of this segment. The increasing burden of chronic diseases and the aging population in Vietnam further fuels demand for medications that require medical oversight. Patients with conditions like diabetes, cardiovascular diseases, and respiratory disorders frequently rely on prescription drugs for optimal management. Additionally, patients place trust in healthcare professionals' expertise and their prescription recommendations, enhancing the segment's prominence.

Vietnam Pharmaceuticals Market – By Application

Based on application, the Vietnam Pharmaceuticals Market is divided into Cardiovascular, Metabolic Disorder, Oncology, Anti-infective, and Musculoskeletal segments.

Vietnam Pharmaceuticals Market – By Distribution Channel

Based on distribution channel, the Vietnam pharmaceuticals market is divided into Retail Pharmacy, Hospital Pharmacy, and E-Pharmacy segments. The hospital pharmacies segment held the highest share in the Vietnam pharmaceuticals market by distribution channel due to their pivotal role in patient care, providing specialized medications for inpatients and managing acute care scenarios, which can lead to increased demand for pharmaceuticals. Hospital pharmacies also handle chronic disease management and emergency cases, necessitating a consistent supply of medications. Stringent regulatory compliance, centralized purchasing systems, involvement in clinical trials and research, and their accessibility to healthcare professionals who prescribe medications further contribute to their potential dominance in the market.

Competitive Landscape

Major players operating in the Vietnam pharmaceuticals market include Sanofi Vietnam, GSK Vietnam, AstraZeneca Vietnam, Novartis Vietnam, Vinapharm, DHG Pharmaceutical, Traphaco, Domesco Medical Import Export Joint-Stock Corporation, OPV Pharmaceutical Joint-Stock Company, and Pymepharco. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Development

• In August 2023 - Dongwha Pharm has secured a 51% stake in Trung Son Pharma, a major Vietnamese pharmacy chain. Trung Son operates over 140 pharmacies, boasting a strong sales record in health and beauty products. With plans to expand to 460 stores by 2026, the acquisition aids Dongwha's entry into Southeast Asia. Dongwha intends to introduce over-the-counter medicines like Whal Myung Su and extend its offerings to include functional foods and cosmetics, leveraging its experience as Korea's oldest pharmaceutical company. This strategic move taps into Vietnam's growing pharmaceutical and beauty market.

• In February 2023 - Vietnam extended existing marketing authorizations for pharmaceutical products until 2024, benefiting EU exporters by avoiding complex renewal procedures. This move, driven by EU-Vietnam free trade agreement negotiations, improves access to the Vietnamese market. The decision, enacted through Ministry of Health Decision 62/ QD-QLD, eases EU industry's access to Vietnam while promoting transparent and predictable market authorization. The extension, combined with Vietnam's recognition of the EU Single Market through Circular 8, bolsters pharmaceutical trade.

Scope of the Report

By Drug Type

• Generic Drugs

• Branded Drugs

By Product Type

• Prescription Drugs

• Over-The-Counter Drugs

By Application

• Cardiovascular

• Metabolic Disorders

• Oncology

• Anti-infective

• Musculoskeletal

By Distribution Channel

• Retail Pharmacy

• Hospital Pharmacy

• E-Pharmacy

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. Vietnam Pharmaceuticals Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Rising Healthcare Demand
         2. Government Initiatives
         3. Growing Medical Tourism in Vietnam
      2. Restraints
         1. Regulatory Challenges
         2. Counterfeit Concerns
      3. Opportunities
         1. Increasing Healthcare Spending
         2. Growing E-commerce and Digital Health
      4. Challenges
         1. Limited Access to Healthcare
         2. Supply Chain Disruptions
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. Vietnam Pharmaceuticals Market Overview
   1. Market Size & Forecast, 2019–2029
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Drug Type
         1. Generic Drugs
         2. Branded Drugs
      2. By Product Type
         1. Prescription Drugs
         2. Over-The-Counter Drugs
      3. By Application
         1. Cardiovascular
         2. Metabolic Disorder
         3. Oncology
         4. Anti-infective
         5. Musculoskeletal
         6. Others
      4. By Distribution Channel
         1. Retail Pharmacy
         2. Hospital Pharmacy
         3. E-Pharmacy
5. Competitive Landscape
   1. List of Key Players and Their Offerings
   2. Vietnam Pharmaceuticals Company Market Share Analysis, 2022
   3. Competitive Benchmarking, By Operating Parameters
   4. Key Strategic Developments (Mergers, Acquisitions, Partnerships, etc.)
6. Impact of Covid–19 on Vietnam Pharmaceuticals Market
7. Company Profile (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, SWOT Analysis)
   1. Sanofi Vietnam
   2. GSK Vietnam
   3. AstraZeneca Vietnam
   4. Novartis Vietnam
   5. Vinapharm
   6. DHG Pharmaceutical
   7. Traphaco
   8. Domesco Medical Import Export Joint-Stock Corporation
   9. OPV Pharmaceutical Joint-Stock Company
   10. Pymepharco
   11. Other Prominent Players
8. Key Strategic Recommendations
9. Research Methodology
   1. Qualitative Research
      1. Primary & Secondary Research
   2. Quantitative Research
   3.  Market Breakdown & Data Triangulation
      1.  Secondary Research
      2.  Primary Research
   4.  Breakdown of Primary Research Respondents, By Region
   5.  Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable.

List of Figures

Figure 1       Vietnam Pharmaceuticals Segmentation       

Figure 2       Vietnam Pharmaceuticals Market Value Chain Analysis     

Figure 3       Company Market Share Analysis, 2022

Figure 4       Vietnam Pharmaceuticals Market Size, By Value (USD Million), 2019–2029    

Figure 5       Vietnam Pharmaceuticals Market Share, By Drug Type, By Value, 2019–2029

Figure 6       Vietnam Pharmaceuticals Market Share, By Product Type, By Value, 2019–2029         

Figure 7       Vietnam Pharmaceuticals Market Share, By Application, By Value, 2019–2029

Figure 8       Vietnam Pharmaceuticals Market Share, By Distribution Channel, By Value, 2019–2029 

List of Tables

Table 1        Vietnam Pharmaceuticals Market Size, By Value (USD Million), 2019–2029

Table 2        Vietnam Pharmaceuticals Market Size, By Drug Type, By Value, 2019–2029

Table 3        Vietnam Pharmaceuticals Market Size, By Product Type, By Value, 2019–2029

Table 4        Vietnam Pharmaceuticals Market Size, By Application, By Value, 2019–2029

Table 5        Vietnam Pharmaceuticals Market Size, By Distribution Channel, By Value, 2019–2029

Table 6        Sanofi Vietnam Company Overview

Table 7        Sanofi Vietnam Financial Overview

Table 8        GSK Vietnam Company Overview

Table 9        GSK Vietnam Financial Overview

Table 10      AstraZeneca Vietnam Company Overview

Table 11      AstraZeneca Vietnam Financial Overview

Table 12      Novartis Vietnam Company Overview

Table 13      Novartis Vietnam Financial Overview

Table 14      Vinapharm Company Overview

Table 15      Vinapharm Financial Overview

Table 16      DHG Pharmaceutical Company Overview

Table 17      DHG Pharmaceutical Financial Overview

Table 18      Traphaco Company Overview

Table 19      Traphaco Financial Overview

Table 20      Domesco Medical Import Export Joint-Stock Corporation Company Overview

Table 21      Domesco Medical Import Export Joint-Stock Corporation Financial Overview

Table 22      OPV Pharmaceutical Joint-Stock Company Overview

Table 23      OPV Pharmaceutical Joint-Stock Company Financial Overview

Table 24      Pymepharco Company Overview

Table 25      Pymepharco Financial Overview

Table 26      Other Prominent Players Company Overview

Table 27      Other Prominent Players Financial Overview