Vietnam. Pharmaceutical market outlook to 2016

The Economist Intelligence Unit projects Vietnam’s GDP to be one of the smallest in the Asia Pacific region by 2016, ranked 15th. In terms of GDP per capita, Vietnam will rank 14th in the Asia Pacific region. The macro environment is positive for Vietnam’s pharmaceutical market growth, despite concerns over IPR.

Despite Vietnam remaining on the USTR Special 301 Watch List in 2011, the USA is encouraged by the government’s attempts to improve IPR protection and its enforcement; particularly of note are recent amendments to the IP Law. Vietnam has a large and young population, which will be the eighth largest population in the Asia Pacific region by 2016. The elderly population is rising, though slowly, and will remain one of the lowest proportions in the Asia Pacific region.

Rising drug consumption and government investment make Vietnam an attractive pharmaceutical market. Drug consumption in per capita terms is expected to increase by 70.0% in 2014. Local drug production met around half of the nation’s needs in 2010. The government has announced that improving the domestic pharmaceutical industry is the health sector’s highest priority over the next few years, in order to meet 70.0% of the nation’s drug demand by 2015.

A plan to develop and restructure Vietnam’s pharmaceutical industry is underway, which includes boosting the production of essential drugs in order to cut prices, stabilize the market and reduce the country’s dependence on foreign pharmaceutical imports. Other targets include increasing investment in scientific research & technological application and expanding co-operation with foreign pharmaceutical companies.

The Drug Administration of Vietnam (DAV) has warned that drug prices could rise slightly in 2011 due to volatile raw material prices and the VND-US$ exchange rate. In July 2011, the Vietnam Pharmaceutical Companies Association (VNPCA) reported that prices of both imported and domestic drugs rose during the month. The VNPCA forecasts higher sales prices for both imported and domestic drugs in 2011, due to higher input costs and rising world prices. To review the local pharmaceutical market and prevent large drug price increases, the DAV has announced several measures such as increasing the inspection of drug price quotations by pharmaceutical companies through health work groups and will promptly publish the results, supervise the enforcement of state regulations on drug price management and exercise sanctions on violators etc.

Source: TECTURA
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