The great potential of the Vietnamese market

Viet­nam has a grow­ing pop­u­la­tion of approx­i­mately 90 mil­lion, which makes it the world’s thirteenth-most populous coun­try and the eighth-most populous coun­try in Asia. A mil­lion babies are born each year in Viet­nam, and the growing pop­u­la­tion demands high-grade med­ical ser­vices. The sec­tor is there­fore seen as a pre­mium invest­ment area for for­eign com­pa­nies involved in health­care.

Drug con­sump­tion per capita in Viet­nam is increas­ing as well—it is expected to dou­ble by 2015. The increase is fuelled by a richer and older soci­ety, as well as by an expan­sion of the country’s national insur­ance sys­tem: Today, 65% of Vietnamese people are cov­ered by the national sys­tem. By 2020, that num­ber will reach 90%.

One of the main rea­sons for the country’s increased drug con­sump­tion is a busy and stress­ful lifestyle. Peo­ple in Viet­nam exer­cise less and use more take-away food deliv­er­ies. Con­se­quently, about 22% of the pop­u­la­tion is affected by gas­troin­testi­nal (GI) prob­lems. Alco­holism is another seri­ous cause of gas­troin­testi­nal prob­lems in the country; according to the Vietnam Beverage Association, about 5% of Vietnamese cit­i­zens are alco­holics.

Viet­nam’s phar­ma­ceu­ti­cal mar­ket has tremen­dous growth poten­tial. Still, most of the drugs used in the coun­try are imported. According to the General Statistics Office, Viet­nam spent US $1.25 billion on phar­ma­ceu­ti­cal imports in 2013, up 7.1% from the previous year.

Those mar­ket indices have attracted some pio­neer­ing drug­-mak­ers. For exam­ple, Sanofi plans to invest US $75 million in a new plant in Viet­nam, which will begin operations by 2015. Some other for­eign drug­-mak­ers are part­ner­ing with their Viet­namese counterparts for man­u­fac­tur­ing and dis­tri­b­u­tion. Glax­oS­mithK­line has maintained a deal with Savipharm, a lead­ing Viet­namese phar­ma­ceu­ti­cal com­pany, since 2010. STADA has taken another approach, hav­ing bought almost half of Viet­namese drug-maker Pymepharco.

Foreign investors have traditionally paid less attention to the Viet­namese healthcare industry in com­par­i­son to many other fields like finance, real estate or tourism. Today, the sit­u­a­tion is chang­ing. Many international phar­ma­ceu­ti­cal play­ers have real­ized the great poten­tial of the Viet­namese mar­ket lies in its low cost of labour and man­u­fac­tur­ing.

CPC Press Releases on Vietnam:

Vietnam: An Overview