The pharmaceutical Industry is sensitive to Covid-19 but is slowly recovering. The Covid-19 pandemic is a great challenge for the entire population and manufacturing industries, especially the pharmaceutical industry, in case of strong community spread. However, at the present, the health care target is the main goal and an essential expenditure for the people. Demand for Medicines will only be temporarily delayed in the short term and will gradually recover.

Vietnam Pharmaceutical sales and revenues in 2021 will be estimately increase by 15% over the same period, higher than CARG 2015-2019 by 11.8%. It is estimated that medical consumption will return to normal levels in 2021, after social distancing regulations are loosen and people’s demand for medical examination increases again. In addition, Vietnam’s aging population is rapidly increasing and strong per capita income continue supporting the long-term growth momentum of the healthcare market.

Estimated Pharmaceutical Sales of Vietnam by BMI

The government continues to reform policies to support domestic pharmaceutical companies and reduce the burden of health insurance. Vietnamese Government continues to amend bidding regulations on drug procurement at public hospitals in order to (1) encourage the production of generic drugs to replace expensive imported drugs; and (2) reduce the financial burden on the health insurance fund, as premium revenue has been struggling to keep up with the demand for insurance payments in recent years.

In 2020, the Government also issued Circular 15/2020/TT-BYT to replace Circular 09/2016/TT-BYT, expanding the list of drugs tendered by hospitals and drugs under centralized procurement (drugs are bidded in session directly held by Vietnam Social Insurance). As a result, drug prices in the hospital channel are gradually becoming more transparent, helping domestic manufacturers compete with expensive imported drugs which previously dominated hospitals.

Moreover, the Law on Pharmacy (Chapter II, Article 7) and Circular 03/2019/TT-BYT stipulate not to bid for imported drugs whenever domestically produced drugs meet the requirements for treatments, prices and supply capacity, which create great advantages for domestic drugs. 

Issues and risks

The unstable regulatory environment. Despite recent policies supporting domestic manufacturers, the regulatory environment for pharmaceutical companies still remains erratic, with 2 to 5 new circulars being revised and issued each year, contains potential high risks for businesses.

Depending heavily on imported API source. Vietnam is still heavily dependent on importing Chinese and Indian APIs, which are accounting for 80% of total imported APIS and 70% of total of total APIs used in the industry. This is a significant raw material bottleneck, as any changes from these countries could greatly affect the capacity of domestic drug manufacturers.

In General:

The pharmaceutical industry will come back strongly in 2021 and the following years due to the massive influx of foreign investment and good disease control in Vietnam. The imported API sourcing problems are still there, but not significantly affecting.


<The Report is compiled and collected from SSI, BMI and Vietnam Custom>