Vietnam’s pharmaceutical market continues to be a key contributor to its economic expansion, experiencing an average annual growth rate of 10% as of 2024. Increased demand for imported drugs has reshaped regulations on drug distribution and advertising, presenting lucrative opportunities for foreign investors.
With a growing population and government efforts to modernize healthcare, Vietnam Pharmaceutical Companies are positioned for significant growth, making the sector highly attractive to potential suppliers and manufacturers. This article offers valuable insights for investors looking to enter or expand in Vietnam’s thriving pharmaceutical industry.
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Vietnam Pharmaceuticals & Healthcare Demand Report
The demand for pharmaceutical products in Vietnam continues to experience robust growth, reflecting the population’s increasing focus on healthcare. In 2024, the projected revenue in Vietnam’s pharmaceutical market is estimated to reach US$2.4 billion, driven by increasing demand for prescription drugs, especially in areas like oncology and chronic disease treatments. Foreign and local players continue to drive this expansion, with both sectors benefiting from the rising healthcare awareness and access to medical services. International cooperation is also bolstering Vietnam’s healthcare sector, with partnerships between the Ministry of Health and international organizations aiming to strengthen healthcare services and pharmaceutical regulation.
Foreign brands maintain strong popularity within the Vietnamese market. Companies like Bayer HealthCare Pharmaceutical distribute products across major cities such as Ho Chi Minh City, Danang, and Hanoi, focusing on treatments for infectious diseases, cancer, and women’s health. Meanwhile, Vietnamese pharmaceutical companies like DHG Pharmaceutical Joint Stock Company and Hisamitsu Vietnam Pharmaceutical Co. Ltd. also contribute significantly, addressing local needs with a wide range of products.
Moreover, Vietnam pharmaceutical imports reached US$3.15 billion in the first nine months of 2024, marking a 24.2% year-on-year increase, further illustrating the growth in demand. Many Vietnamese consumers continue to purchase pharmaceutical products from non-public pharmacies without prescriptions, often relying on recommendations from friends and relatives. This purchasing behavior highlights the need for better regulation and education in the pharmaceutical industry, particularly regarding the labeling of pharmaceutical products and consumer awareness. The Vietnamese government has emphasized the importance of public-private partnerships to address these challenges, enhancing both access to healthcare services and the overall quality of care available to the population.
Read Related: Vietnam’s Product Labels Regulations: Labeling of Pharmaceutical and Healthcare Products
Vietnam’s Pharmaceutical Market Overview
Vietnam pharmaceutical market, valued at US$7.7 billion in 2021, is poised for rapid growth, potentially reaching US$16.1 billion by 2026. This expansion is driven by heightened healthcare demand and an increasing focus on healthcare awareness. According to MB Securities, prescription drugs constitute over two thirds of the industry’s revenue. Despite domestic production of prescription drugs, the industry remains heavily reliant on imports for specialized treatments, as demonstrated by the US$3.15 billion spent on pharmaceutical imports in the first nine months of 2024. This highlights Vietnam’s growing dependency on foreign-made medicines. International cooperation and foreign direct investments have further amplified this growth, with the government keen on improving regulations and expanding healthcare access across the country through public-private partnerships.
Economic factors, such as rising healthcare expenditures and the regulatory framework governed by the Drug Administration of Vietnam, shape the industry’s landscape. Foreign pharmaceutical companies must partner with local distributors to navigate these regulations and meet international standards, ensuring compliance with global requirements, such as those set by the World Trade Organization. Notably, the Vietnamese government’s efforts to tighten pharmaceutical regulations, along with significant investments in healthcare infrastructure, have helped attract more international firms and collaborations, expanding the range of available medical products and services to the public.
For those aiming to enter pharmaceutical sales in Vietnam, understanding the dynamics between domestic production, foreign collaboration, and import reliance is essential for success in this fast-evolving market. These collaborations, coupled with strategic partnerships, play a critical role in Vietnam’s efforts to modernize its healthcare sector and improve access to essential medicines.
Read Related: Understand Medical Equipment Registration in Vietnam
Health Issues in Vietnam: A Growing Concern for Urban Populations
In Vietnam, particularly in urban areas, healthcare has become a priority for the population. While maternal mortality rates have significantly decreased over recent decades, the mortality rates for newborns and children under five have seen little change.
The most pressing health issue in Vietnam is the rise of non-communicable diseases, such as cancer, diabetes, and cardiovascular conditions, which account for over 70% of total deaths in the country. Contributing to this trend is the growing influence of unhealthy Western diets, leading to increased risks of conditions like diabetes.
Moreover, environmental factors, including air and water pollution in densely populated cities, further exacerbate the country’s health challenges, posing additional risks to the well-being of Vietnam’s urban residents.
Read Relevant: Healthcare Industry in Vietnam: Market Trends, Hospital Investments, and System Dynamics
Market Entry Strategies for Vietnam Pharmaceutical Companies
Despite regulatory barriers, one of the most effective ways for foreign pharmaceutical producers to enter Vietnam’s market is through partnerships with local firms. Collaborating with local distributors can help overcome advertising restrictions and enhance brand awareness.
Market entry options include joint ventures, mergers and acquisitions (M&A), and direct investment as drug importers. M&A, in particular, is a strong option for foreign investors looking to enter Vietnam’s pharmaceutical industry. With Vietnam still reliant on imports for many drugs and raw materials, these strategies open doors for foreign firms to integrate into supply chains.
Read More: Setting up a Joint Venture in Vietnam: Exploring Joint Venture Company Opportunities
The Importance of Market Research and Analysis for Vietnam Pharmaceutical Companies
Market research and analysis are vital components of growing any business, particularly in a competitive sector like pharmaceuticals. To successfully expand, it’s crucial to first understand your target market. Once you’ve identified your audience, the next step is to create products that cater to their needs. Establishing strong local partnerships is equally important for ensuring a seamless entry into the market.
For those considering establishing a pharmaceutical company in Vietnam, InCorp Vietnam provides comprehensive incorporation services to guide you through this booming industry. From setting up your business to facilitating medical device and health supplement registration, InCorp Vietnam’s expert team is ready to assist you at every stage of your journey.
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