1.

Overview
Total revenues 3.31 billion USD
Growth in 2009-2013 at around 18.78%
Growth in 2014-2018 at around 15.51%
Imports 2157.69 million USD
Exports 100.04 million USD
The number of manufacturing enterprises is 185
While the crisis led to a decline in most economic sectors, the
pharmaceutical industry has recorded growth in upstream with an average speed of
18.8% / year over the period of 5 years 09-13. The main factor affecting this trend
is due to the drug itself is not a substitute product, and the perception of the health
care of Vietnamese people has increased. However, the fact that Vietnam's
pharmaceutical industry can not be denied is the import ratio is still too high,
accounting for over 60% of the total demand of domestic consumers. Meanwhile,
although supply 50% of demand but the domestic market is only responded 38% ,
domestic enterprises moving toward export. However, exports are too low, so the
product of domestic enterprises is just the normal formula that supply drugs on the
international market is still very abundant, in addition, 90% of the medicinal is
imported, leading to Vietnam's goods become uncompetitive. Therefore, according
to BMI's forecasts, although the Department of Health is encouraging business
loans with preferential interest rates to build new projects, in the next 5 years,
pharmaceutical companies in Vietnam may not have breakthroughs development.
As a result the trade balance of Vietnam pharmaceutical industry has yet has a
positive progression. The pharmaceutical industry is still in the early stages of the
development period. The list of products of the industry are still sparse, but still
tends to increase. Furthermore, most of the businesses involved are small with tiny
investment,thus the number of GMP WHO under the Department of Healths

standard accounts for 80-90%. Victims of counterfeit drugs are rampant due to the
slack policy and control methods. So in the coming years, pharmaceutical industry
wants to change the strategy and legal framework to create favorable conditions for
developing the sector. BMI forecasts the pharmaceutical industry continues to
grow at an average rate of 15.5% / year over the next 5 years, and contributed to
2.2% of GDP in 2017. Although foreign products still dominate in the near future,
the local companies will actively invest in production, seek new drugs, continue to
build the infrastructure to international standards, trying to reach the target by
2020, providing 70% of Domestic market demand as the Ministry of Health has
set.
2. The main influencing factors
- Education and health is improving
- The perception of Vietnamese people on the use of internal and external
products
- The WTO, leading domestic products to compete with foreign products
intensly
- Investing in specific types of complex pharmaceutical is weak
- Heavily dependent on raw materials importation
3. Status of business and industry growth
- The growth rate of sales increased steadily over the years
- Profits are volatile: profits still volatile due to uncontrolled input costs
- The import-export: trade balance is in enormous deficit
- Imports still high
+ Import over 60% of domestic demand
+ Imports mainly from France pharmaceuticals, India and South
Korea
- Exports remain weak

+ Prices of pharmaceutical exports Vietnam is 20- 30% higher than

India, China
+ Exports grew at a rate 25.93% / year over the period 09-13.
Forecast: Maintaining the growth rate in the period 14-18
+ There are many potential export markets: Southeast Asia, Africa and
the Middle East
- Price of pharmaceuticals has increased at the rate of 7.7%
+ Price of pharmaceuticals and national CPI rose in the same
direction. Prices of import pharmaceuticals rose more than domestic
products
- The implementation of enterprise and vendor reaches WHO GMP is low
and ineffective.
4. Sector Forecasting
The pharmaceutical industry is forecast to continue growing in the next 5year period. Pharmaceutical expenditure per capita is low (31.6 US dollars), along
with the population explosion, high awareness towards health care, will create a
strong premise for pharmaceutical purchasing power, leading to industry growth.
BMI forecasts that drug consumption will increase to VND 117,802.35 billion in
2017, corresponding to growth of 14.7% on average. Sales of drugs on average per
person is therefore increasing at a rate of 14.3%. Moreover, the rate of the sector's
contribution to GDP will from 2.07% to 2.19% to 2013 to 2017 with continuous
uptrend.
The rate of import and export BMI in forecasts: the export value will
increase at an average annual rate of 26.5%, while the value of imports increased
to a lesser extent is 15.7% with gradual decline. However, foreign products still
dominate, while the internal rate of imports in total sales remained at over 60%. In
the period till 2017, the import and exports trade balance of pharmaceuticals

sector will remain at 3.5 billion dollars in deficit. The percentage of drugs sold
through prescription will rise, and drugs sold without prescription will fall
corresponding.
Currently, only about 20-30% of people reach the counter prescription
medications. However, this rate will be gradually increased, mainly due to the
demand for increased drug treatment and seek medical practice in hospitals rather
than at home with self examination. Furthermore, on the supply side, companies
are increasing sales by paying commissions to doctors at the hospital if they
prescribe single pass. Currently, the price rose to doctors is 10-30% of the total
value of pharmaceuticals. BMI forecasts that in the next 5 years, the rate of drug
use across the value will increase to 74.6% shares from 73.3% in 2012 compared
with the total value of drugs sold. This is because rural areas will have more
opportunity to seek medical care and access to health care professionals.
Accordingly, the percentage of drugs sold through corresponding will not decrease
from 26.67% to 25.44%. Stay focused on producing generic drugs rather than
specific drugs. Due to poor domestic technology and foreign investments are not
high, Vietnamese enterprises still weak in pharmaceutical production under the
form of Dosage Tech. According to BMI, although drug sales will increase with
copyrighted average rate 12.7% / year, the rate of drug flow on revenues of 22.7%
decreased from 2012 to 2020 at 18.51%. Thus normally one line up a substantial
share in the market. Vietnam has a great potential in the field of drug production
than the market due to low purchasing power.