Vietnam's Pharma Market Among The Fastest Growing In SE Asia
Decision Resources Group finds that Vietnam’s pharmaceutical markets is among the fastest growing in Southeast Asia, with a growth rate of almost 17 percent and over $3 billion in size in 2013. DRG attributes Vietnam’s rocketing growth to a rapidly aging population, increasing affluence, and the steady extension of public health insurance.
These factors continue to drive demand for prescription medicines in the country. Vietnam’s ambitious aim to achieve universal health coverage by 2015 stems from the fact that over 30 percent of its population is still not covered by any form of public health insurance and private health expenditure is still high. In fact, the private health expenditure currently accounts for 57 percent of total health expenditure of the country.
Decision Resources Group Analyst Jonathan Chan, MMedSc, said, “Vietnam's population reached 90 million by the end of 2013, making it the third most populous country in Southeast Asia and a sizable market for foreign drug manufacturers to consider for investment. An estimated market growth rate of 20 percent through 2017 should signal Vietnam's importance in any company's strategic planning when exploring opportunities in developing markets.”
DRG’s Vietnam Market Access Tracker lists the following key findings:
- Vietnam drug prices are 12 times higher than international reference prices. Controlling drug prices is made more difficult by a fragmented healthcare system, a decentralized drug procurement process and heavy dependence on imported medicines
- The Vietnamese population faces high and unaffordable health expenditure, which remains a financial burden and barrier to healthcare access
- Vietnam's intellectual property rights protection remains weak. The Pharmaceutical Research and Manufacturers of America requested to keep the country on the Watch List in its Special 301 Report for 2014 due to lack of regulatory transparency and high penetration of counterfeit drugs
- Vietnam’s government officials and experts are concerned that ongoing negotiations to join the Trans-Pacific Partnership (TPP) may constrain the country's ability to contain climbing drug costs as a result of agreeing to TTP proposals
In spite of being one of the fastest growing pharmaceutical markets in Southeast Asia, Vietnam continues to face several challenges that may deter interest and foreign investment in its market. According to DRG, foreign drug makers must compete with a regionally fragmented market as well as weak intellectual property protection policies and a protracted drug approval and distribution process in Vietnam.