KPMG recently identified Vietnam’s pharmaceutical market as being among the fastest growing in the region. According to the Drug Administration of Vietnam, the total value of the country’s pharmaceutical market is expected to have increased from some $2.7 billion in 2015 to $7 billion in 2022 and is forecast to exceed $10 billion by 2026.

The government has long considered investment in and the development of domestic pharmaceuticals as a key strategy to meet domestic demand and for exports. Vietnam has become an attractive destination for foreign investors in the pharmaceutical field, with well-known enterprises boasting foreign shareholders including Hau Giang Pharmaceutical (DHG), Domesco (DMC), Traphaco (TRA), Imexpharm (IMP), and Pymepharco (PME).

With rapid growth in domestic pharmaceutical production, Vietnam also has potential for export growth. Major export markets would include neighboring countries such as Cambodia, Laos, Myanmar, and elsewhere in ASEAN. KPMG analysts believe that implementing a full legal framework and preferential policies for businesses would help attract investment and enhance the development of an innovative pharmaceutical industry. With major efforts made to promote development, KPMG has forecast that the industry will see breakthroughs in growth as companies begin to invest in modern production facilities. The pharmaceutical industry has the potential to grow at 15-20 per cent each year.

This potential can be seen as a foundation for Vietnam to reach a position comparable to many other countries in the region that have a similar strategy to develop their pharmaceutical industry. Singapore is a typical example in turning itself into a pharmaceutical center over the past two decades. Its pharmaceutical industry has boomed since 2000, when the government launched a campaign to develop biomedical science (BMS) and prioritized the pharmaceutical industry at the national policy level.

The goal of this strategy in the first phase is to double the annual production output of the BMS industry to $7 billion by 2025. Pharmaceuticals is a BMS industry that has grown rapidly over the past 18 years, taking Singapore to its position as a leader in pharmaceutical research and production in the region. Pharmaceutical output increased from $2.8 billion in 2000 to $15.7 billion in 2018, for a compound annual growth rate of 10 per cent.

EU-GMP standards and export targets

Analysts suggest that Vietnam could learn from Singapore’s experience to develop its pharmaceutical industry and shortly move into the global supply chain. In order to do so, it must create conditions for businesses to expand and also strengthen the internal resources of these businesses to seriously invest in quality, technology, production lines, and research and development, and boldly approach new markets.

In the middle of October, Imexpharm took part in the CPhl (Convention on Pharmaceutical Ingredients) in Barcelona, Spain, where it was one of only a few Vietnamese companies to attend. The CPhI is the most important international event for the pharmaceutical industry, bringing together leading pharmaceutical manufacturers worldwide to exchange technological innovations and new products and seek new partners and connect supply chains with global demand. This was an important step helping Imexpharm reach new markets, as it had the opportunity to introduce its products and seek potential partners and was recognized and appreciated by international partners.

Setting foot in the global market is a breakthrough for Imexpharm. The 45-year-old company has had quite a long journey. In the early 1980s, it began with the production of Amoxicillin antibiotics and other products from the active ingredient paracetamol. After that, it made its mark on the domestic pharmaceutical market by becoming a franchised manufacturing partner of many of the world’s leading multinational pharmaceutical corporations, such as Sandoz, Robinson Pharma, DP Pharma, Galien, Pharmascience Canada, and Sanofi - Aventis.

Investing in quality has remained Imexpharm’s top priority, and it has put four factory clusters into operation, including eleven production lines at three factories meeting EU-GMP standards, which is the largest number of EU-GMP lines in Vietnam. It currently has 12 pharmaceutical patents for seven products permitted to be distributed and circulated in Europe under EU-GMP standards.

Constantly striving to contribute to Vietnam’s pharmaceutical sector, Imexpharm General Director, People's Doctor. Pharmacist. Tran Thi Dao is concerned about the numerous difficulties ahead. At the moment, the difficulties for Vietnam’s pharmaceutical sector include most domestic pharmaceutical companies being involved in activities that bring little value to society.

This results in imported drugs dominating and puts patients in Vietnam at a disadvantage in accessing new drugs compared to elsewhere in the region. Specifically, according to the Ministry of Health, as of 2022, only 9 per cent of new drugs are available in Vietnam, out of a total of 460 new drugs in the market from 2012 to the end of 2021. Therefore, expanding production capacity according to international standards and strengthening the ability to produce innovative drugs will promote the competitiveness of domestic drugs against imported equivalents and help expand the opportunities for people to access good medicines at a reasonable price, forming an autonomous and sustainable healthcare system.

According to Dr. Dao, to increase competitiveness in the domestic and foreign markets, Imexpharm aims to make in-depth investments in product quality to ensure reasonable prices. Quality is one of Imexpharm’s focuses, which has been recognized by hospitals, doctors, and patients over the years. It has maintained a production system that meets international standards, concentrated its resources, and systematically invested in manufacturing factories that meet EU-GMP standards and other advanced international standards.

Imexpharm has been investing and will continue to invest heavily in research and development. Through the support of the SK Group, it will promote cooperation with international partners to exchange experience and transfer technology, to diversify its portfolio. It will also continue to introduce new Vietnamese pharmaceuticals with quality and treatment effectiveness that is on par with international equivalents at reasonable prices.

“Regarding investment in expansion, we continually invest in and introduce innovative ideas to increase productivity on current lines and factories,” Dr. Dao said. “We are also conducting research to evaluate the feasibility of a number of investment projects in new factories and lines, to increasingly meet domestic and foreign needs. Imexpharm will make further announcements in this regard as appropriate.”