The Vietnamese pharmaceutical market is experiencing double-digit annual growth and could reach USD 16 billion

As of 2021, the Vietnamese pharmaceutical market has reached more than 6.9 billion USD. And by 2025, it could reach 16 billion USD.

Accordingly, the Vietnamese pharmaceutical market is being valued at about 6.2 – 6.4 billion USD/year; according to statistics from the Ministry of Health, the market value in 2021 has reached more than 6.9 billion USD. BMI Research forecasts that the Vietnamese pharmaceutical market will reach about 16.1 billion USD in 2026, with a compound growth rate of up to 11% in Vietnamese Dong.

In 2018, the pharmaceutical market in Vietnam reached 5.4 billion USD. According to a report by Phu Hung Securities, the CAGR of the Vietnamese pharmaceutical market is 6.5%.

In ODClick's market report, the ecosystem of the pharmaceutical industry has been clearly developing in recent times with more than 250 pharmaceutical manufacturing plants, 200 import-export facilities, 4,300 agents and more than 62,000 retail outlets. It is estimated that from 2018 to 2021, our country's pharmaceutical industry has attracted more than 7,000 highly qualified workers to participate in business and production activities.

Previously, the General Secretary - Chief of Office of the Vietnam Pharmaceutical Business Association said that, as of 2022, our country has 51 pharmaceutical enterprises with foreign investment, 228 enterprises meeting WHO GMP standards, 12 enterprises meeting high standards such as EU GMP, PICs, JAPAN, TCA.

This number shows that Vietnam's pharmaceutical industry has really made a long step forward, because in 2017 there were only 2 enterprises achieving GMP. Businesses are more willing to invest, achieving good manufacturing practice standards, the distribution system is relatively developed, especially the nationwide pharmacy system.

However, the Vietnamese pharmaceutical market is still a playground for foreign pharmaceutical companies. Ms. Dieu Ha said that in the period 2015 - 2021, the value of domestic drug production only reached 46% of the total value of drugs used by the people. Although this rate has increased compared to the 2001-2011 period of 17%, it is still low compared to the world.

Vietnam's pharmaceutical industry basically does not produce specific drugs, only solving common and chronic diseases. Vietnamese pharmaceutical products mainly focus on the group of anti-infective drugs, antipyretic, analgesic, vitamin and mineral groups. Most essential specific drugs still have to be imported. Pharmaceutical factories meeting WHO GMP standards also mainly produce generic drugs.

Also according to Ms. Ha, in 2002, the average person spent about 6.7 USD on medicine, by 2021, this number is 73 USD. With a population size of about 100 million, the number of people aged 65 and over accounts for 11.9%, this number promises an even faster growth rate.

Also in KPMG's report, the innovative pharmaceutical industry alone is estimated to have contributed 1.16 billion USD to Vietnam's GDP in 2021, with an annual growth rate that could reach 10% in the near future.

This number includes 350 million USD of value created directly, plus 410 million USD of indirect contribution through transactions between businesses such as spending on raw materials. Logistics, sales and marketing. The remaining about 400 million USD is recorded through the spending of workers in this industry.

From 2016 - 2020, our country has received more than 1 billion USD of investment in science and healthcare, reaching a compound growth rate of up to 60%.

Vietnam's pharmaceutical industry could reach 63.8 billion USD

Vietnam's pharmaceutical market grows by double digits every year

>>> See more: Exciting race to achieve EU GMP standards of pharmaceutical companies

According to KPMG, in the future, macroeconomic conditions and increased disposable spending will contribute to maintaining high annual growth until 2045. If the Vietnamese market can maintain this growth rate, the total value of the pharmaceutical industry could reach 63.8 billion USD or more by 2045.

KPMG also noted that after the pandemic, in the context of a stable business environment, the innovative pharmaceutical industry is expected to recover to a pre-pandemic growth rate of 10% - 12%. Accordingly, the market value is expected to reach 14 – 21.6 billion USD in 2045, increasing from 1.4 billion USD in 2021.

“Depending on market developments, the pharmaceutical industry has the potential to grow at a rate of 15-20%/year and reach a total value of 40.8 – 113.3 billion USD by 2045, corresponding to a growth rate 3 times higher than that achieved in the stable business scenario,” KPMG’s report said in an optimistic context.

Vietnam has the potential to become a regional pharmaceutical and medical hub. With rapid growth in domestic pharmaceutical production, Vietnam also shows strong growth potential in the field of pharmaceutical exports.

Major export markets will be neighboring countries such as Cambodia, Laos, Myanmar and other countries in ASEAN.

The Vietnamese Government has identified the pharmaceutical industry as a key industry in economic development and creating welfare for the people in the future.

The main objectives include: By 2025, domestically produced drugs will reach 75% of the quantity used and 60% of the market value, the rate of using domestically sourced medicinal materials and herbal medicines will increase by at least 10% compared to 2020.

By 2030, domestically produced drugs will reach about 80% of the quantity used and 70% of the market value, the rate of using domestically sourced medicinal materials and herbal medicines will increase by at least 30% compared to 2020. By 2045, the total value of the industry's contribution to GDP will be over 20 billion USD.

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