Despite having a good market, the pharmaceutical manufacturing in Vietnam still faces many difficulties. This difficulty comes from industry competition, world competition and technological development. In order for the pharmaceutical manufacturing to develop, what should pharmaceutical enterprises do?

The pharmaceutical manufacturing industry in Vietnam is classified as a rapidly growing industry.

Especially in 2022, the pharmaceutical manufacturing industry witnessed remarkable growth. According to a general report, Vietnam’s pharmaceutical market is valued at about 6.2-6.4 billion USD/year. Vietnam’s pharmaceutical market is also forecast to reach 16.1 billion USD in 2026. According to VIRAC’s report, in the first quarter of 2023, the industrial production index of this industry group achieved a growth rate of nearly 7% over the same period last year.

Domestic pharmaceutical production is expanding in scale.

According to the latest report of VIRAC, Vietnam has 51 foreign-invested pharmaceutical enterprises. 228 enterprises met WHO – GMP standards (World Health Organization – WTO Good Manufacturing Practice). 18 enterprises meet high GMP standards such as EU, PICs, JAPAN, TCA. 3 facilities with PIC/S-GMP production lines: Fresenius Kabi Bidiphar (HSA Singapore); Korea United (Korea).

The above figures show that Vietnam’s pharmaceutical manufacturing industry has really made quite a step forward. Pharmaceutical manufacturing enterprises invest more, achieve better manufacturing practice standards. Moreover, the pharmaceutical distribution system in Vietnam is relatively developed. In particular, the drugstore system is developing widely across the country.

It can be said that the pharmaceutical market in Vietnam is developing very well. However, the pharmaceutical industry in Vietnam still has many limitations.

Limit 1: The pharmaceutical industry lacks connection with advanced technology and techniques.

Many drug factories in Vietnam only produce pharmaceutical products with simple production lines. Factories also focus on generic drugs, which are bioequivalent to invention drugs (generic drugs). The reason is that the production plants lack connection with modern technology, new preparation techniques, … It is sad that more than 90% of raw materials for domestic pharmaceutical production have to be imported.

Limit 2: The pharmaceutical industry has not yet mastered the Vietnamese market

Such a good consumption market, Vietnam’s pharmaceutical market is still a “playground” for foreign businesses. In the period from 2015 to 2021, the value of domestic pharmaceutical production is still low. This figure only reached 46% of the total value of drug use of the people.

This rate has increased significantly compared to the previous period (2001-2011) but is still low compared to the world. The reason is that the pharmaceutical industry in Vietnam has not been able to produce specific products. Most of the drugs produced in the country are only used to treat common and chronic diseases.

Top 10 prestigious pharmaceutical manufacturing companies in Vietnam, 2022

Some Vietnamese enterprises have partly overcome the above limitations. These enterprises have applied technology in production to become one of the top 10 prestigious pharmaceutical manufacturing companies in Vietnam in 2022, according to a report by VIRAC.

• Hau Giang Pharmaceutical Joint Stock Company
• Traphaco . Joint Stock Company
• Sanofi – Aventis Vietnam Co., Ltd
• Imexpharm Pharmaceutical Joint Stock Company
• Binh Dinh Pharmaceutical – Medical Equipment Joint Stock Company
• Pymepharco Joint Stock Company
• Domesco Medical Import-Export Joint Stock Company
• TV.Pharm Pharmaceutical Joint Stock Company
• OPC Pharmaceutical Joint Stock Company
• Ha Tay Pharmaceutical Joint Stock Company

With the existing consumption market, pharmaceutical enterprises in Vietnam need to improve their competitiveness with foreign enterprises.

Up to now, when the need for essential therapeutic drugs is essential, the basic is usually covered. Therefore, the pharmaceutical industry needs to focus its resources on the more difficult stages of the pharmaceutical industry. For example, research, testing, development, production of specialized drugs, special treatments, rare drugs, invention drugs… This will help businesses reduce dependence on foreign medicinal products.

Advanced technology is always the key when it comes to growth and competitiveness. Therefore, pharmaceutical manufacturing enterprises need to apply advanced science and technology to production. However, applying advanced technology to production is a relatively difficult task for small and medium enterprises. Therefore, leading large enterprises in the industry need to be pioneers in the development and application of science and technology to production.

On the other hand, businesses need to apply technology to fully exploit the inherent strengths of our country. It is a rich source of medicinal herbs and high-quality human resources in the country. In order to raise the ranking of Vietnam’s pharmaceutical industry on the world map, pharmaceutical manufacturers must “take shortcuts, catch up” with technology and bring into full play the capacity of the pharmaceutical industry. In particular, it is necessary to promote investment in research, testing and development of biological drugs, invention drugs….

Generic drug market share is already small, plus many companies produce together, leading to fierce competition. This leads to inefficient production and business activities of enterprises. It is this that makes Vietnamese businesses lack competitiveness with businesses in the world.

Therefore, it is necessary to divide each pharmaceutical manufacturing enterprise into a different product niche. This will reduce competition among domestic enterprises and diversify products. By doing this, Vietnam’s pharmaceutical industry will have more competitiveness with foreign enterprises.

The above information is updated from the “Vietnam’s pharmaceutical industry report in the first quarter of 2023“. The report not only provides full information on macroeconomics, trade supply and demand of the pharmaceutical industry, but also provides all relevant information and forecasts from the latest updated data.