Vietnam Pharmaceutical Industry
[pic 1] [pic 2]Executive SummaryVietnam is a fast-growing market for pharmaceutical products that is very attractive to foreign firms at present and in the near future. The ageing population of 90 million people with the rise of middle-income class has driven the demand for medications. However, the underdevelopment of local market and poor implementation of healthcare policies of the government have created challenges for global firms in their pursuit of this emerging market’s opportunities. This document aims to provide a glance about the potential of the market and the hurdles that foreign global pharmaceutical firms need to take caution. We also recommend some strategies to utilize the firm’s competencies to address those problems and achieve sustainable growth in this market.Market overview and opportunitiesVietnam is among the highest growing markets in Asia for pharmaceutical products during 2011–2015 and the country is expected to keep the pace for the next 20 years. The overall market value of the industry in 2015 amounted to about 4.2 billion USD, and it is expected to reach 10 billion USD in 2020. According to BMI (Business Monitor International), Vietnam ranked 13/175 countries for the fastest growing global markets in drug spending in 2013. [pic 3]The rapid growth of Vietnam pharmaceutical market can be attributed to a series of economic and social trends. Among these, we are able to identify three key drivers [pic 4]

High economic growth and enhanced personal income: For the past 20 years, Vietnam’s economy rapidly expanded at an average yearly rate of 7%. Strong income growth and increasing health awareness are favorable conditions to increase expenditure in healthcare and pharmaceutical products Rising population and rapid urbanization when combined with environmental and pollution problems lead to the increase of chronic “lifestyle” diseases such as respiratory illnesses, cancer, diabetes, and obesity. Since early 1990s, acknowledging the importance of the healthcare sector, Vietnamese government formulated various policies to promote the development of the domestic health care sector in general and of the pharmaceutical industry in particular. Although the effectiveness of such policies is still controversial, the development of the health care sector is quite remarkable. Market challengesMultinational pharmaceutical companies usually face market access constraints when entering emerging markets, and Vietnam is not an exception. There are four critical and specific aspects of Vietnam market we would recommend firms to take caution when building their market access strategies.Government’s support local players: Vietnam policymakers are doing this by various means, including supporting local players even if they breach patent law  Vietnam’s current pharmaceutical procurement system is highly decentralized and complex. Control of drug prices is still a considerable challenge due to the lack of specific mandated authorities and responsibilities between related ministries and sectors. And currently, there is no unified view of mechanism for drug prices management.The current distribution system of pharmaceutical products is considered fragmented, inefficient and with poor transparency. The lack of legislative guidance increases the inefficiency of the market and raise the final price of the drugs.Underdeveloped primary care services and a shortage of trained pharmacists are continuing to hamper access to medicines and product market penetrationKey strategies to succeedIn order to maximize the opportunities in Vietnam pharmaceutical market, we strongly recommend executives to take strong regionalization approach – moving control away from headquarters toward regional management. This measure would both increase the empowerment of regions and ensure local market focus. Building good relationships with both local governments and local players among the key factors for success. Rather than investing in senior-level meetings and high-cost event sponsorship, some firms are currently choosing to increase their image to Vietnam governments by fostering basic healthcare developments, such as providing training programs for healthcare professionals, screening programs, and drug-distribution programs.  For example, years ago, MSD managed to sell millions of birth control pills by coordinating with the Ministry of Health in patient and healthcare professional training programs in rural areas.

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Pharmaceutical Products And Underdevelopment Of Local Market. (June 8, 2021). Retrieved from https://www.freeessays.education/pharmaceutical-products-and-underdevelopment-of-local-market-essay/