With 178 drug manufacturers in total, Vietnam Pharmaceutical products mostly focus on simple dosage forms and generic forms which are substantially lower in prices but lack of effective drugs with complicated preparation.
Vietnam Pharmaceutical industry has approximately 60,000 ton of herbal medicine in circulation, however, 80% – 90% of which are imported from foreign countries. In particular, China and India are two countries with highest medicine export turnover to Vietnam, accounting for 58.8% and 15.5% respectively in 2015. Apart from that, applications of innovative technologies on medical processes meet with difficulties. The ratio of research and development expense to revenue of domestic companies is just about 5% while that of foreign counterparts is 15%.
In 2015, as VIRAC estimated, Pharmaceutical industry value is expected to reach USD 4.2 billion and healthcare spending per capita is US 38. In the near future, the prescription drugs’ market are forecasted to dramatically outstrip OTC in the growth rate due to appearances of expensive patented products and the increasing demand of high-quality and specific remedies.
The medicine export turnover in the first six months of 2016 reaches USD 1,282.6 million, increased by 24.8% in comparison with the same period last year. The major export markets are France, USA, India … Meanwhile, the export value is extremely moderate, equivalent to just 5% of imported and 2.5% of total revenue. Products exported mainly to some countries: Germany, Russia, African countries and neighboring Myanmar…
Vietnam Pharmaceutical Industry is forecasted to continue the double – digit growth compared with the current value growth but slightly tend to slow down. Besides, with compromising WTO agendas, Vietnamese enterprises confront with higher level of competing from foreign companies because of omitting protective policies by government, especially, this is the main driving force of the industry.
Most of enterprises of pharmaceutical industry maintained positive operation with high levels of gross profit and net profit in the period 2014 – 2015. Taking advantages of large-scale capitals, Traphaco and Hau Giang Pharmacy are reconstructing the retailing system, lower the expense portion to optimize profits and simultaneously improve OTC channels.
| Executive Summary | 4 |
| 1. Business Environment | 6 |
| 1.1. Macroeconomics Situation | 6 |
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Figure 1. CPI of Vietnam and of Medicines and Healthcare Services sector, 2015 Figure 2. GDP Growth and Inflation, 2010-6T/2016 Figure 3. USD/VND exchange rate, 3/2015 – 6/2016 Figure 4. CNY/VND exchange rate, 4/2016 – 7/2016 Figure 5. The total population of Vietnam, 2010-2015 Figure 6. Vietnam population structure by age group |
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| 1.2. Legal Barriers | 10 |
| 1.3. Impacts Of Trade Agreements | 16 |
| Figure 7. Import value of pharmaceutical products, 2010 – 2015 | |
| 2. Vietnam Pharmaceutical Industry Overview | 23 |
| 2.1. Global Pharmaceutical Industry | 23 |
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Figure 8. Global Pharmaceutical industry revenue, 2010 – 2015e Figure 9. Global revenue of prescription drugs, 2010-2015e Figure 10. Global pharmaceutical revenue by region, 2014 Figure 11. Top 10 pharmaceutical products consumed the most in the world, 2015 Figure 12. Global pharmaceutical export, 2010 – 2014 Figure 13. Global pharmaceutical import, 2010 – 2014 Table 1. Top countries importing and exporting of pharmaceuticals, 2014 Table 2. Top 10 pharmaceutical enterprises, 2015 |
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| 2.2. Vietnam Pharmaceutical Industry Overview | 32 |
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Figure 14. Raw material import, 2010 – T6/2016 Figure 15. Raw material import market by country , 6T/2015 – 6T/2016 Table 3. Machinery origin of large pharmaceutical manufacturers Table 4. Major equipment in pharmaceutical production lines Figure 16. R&D/Revenue rate of large pharmaceutical companies 2014 Figure 17. Value of domestic pharmaceutical production, 2009 – 2015e Figure 18. Value rate of Vietnam domestically-produced drug, 2019 – 6T/2016e Figure 19. Pharmaceutical market value, 2010 – 2015e Figure 20. Domestic Pharmaceutical consumption value, 2010 – 6T/2016e Figure 21. Pharmaceutical spending per capita in Vietnam, 2010 – 2015e Figure 22. Pharmaceutical spending per capita in the world, 2014 Figure 23. Prescription Drug market value, 2010 – 2015e Figure 24. OTC Drug market value, 2010 – 2015e Figure 25. Patented drug, 2010 – 2015e Figure 26. Generic Drug, 2010 – 2015e Figure 27. Drug import, 2010 – 6T/2016 Figure 28. Top drug import market of Vietnam, 6T/2016 Figure 29. Medicinal herbs import, Q3/2015 – Q3/2016 Table 5. Price of some drugs in the market, 1/2016 – 2/2016 Table 6. Price – redeclared products statistics, 2015 Table 7. The difference in the price of some drugs at Hapulico market, 2015 Table 8. The number of medical facilities, 2010 – 2014 |
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| 2.3. Risk and challenges | 65 |
| 2.3.1. Legal Risks | 66 |
| 2.3.2. Industry Risks | 67 |
| 2.3.3. Challenges | 69 |
| Figure 30. Unqualified rate 2010 – 2015 | |
| 2.4. Industry Planning | 71 |
| 2.5. Driving Forces and Forecast | 73 |
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Figure 31. Healthcare cost, 2010 – 2016f Figure 32. Global population growth over the age of 60, 1950 – 2050 Figure 33. The number and value of M&A deals in the world, 2015 Figure 34. 10 countries with the highest number of M&A deals in the world, 2015 Figure 35. The revenue of top drugs in developed countries, 2018 Figure 36. The revenue of top drugs in developing countries, 2018 Figure 37. The growth of total drug consumption and average drug spending per capita, 2010-2020f |
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| 3. Enterprise Analysis | 84 |
| 3.1. Profitability Ratios | 84 |
| Figure 38. Gross profit margin and net profit margin of 10 pharmaceutical enterprises 2014 – 2015 | |
| 3.2. Cost Structure | 87 |
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Figure 39. Selling expenses on net revenue of 10 typical pharmaceutical enterprises, 2014 – 2015 Figure 40. Staff expenses of 10 typical pharmaceutical enterprises, 2014 – 2015 Figure 41. The rate of general and administration expenses on net revenue of 10 typical pharmaceutical enterprises, 2014 – 2015 Figure 42. Staff expenses of 10 typical pharmaceutical enterprises, 2014-2015 |
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| 3.3. Asset Management Ratios | 91 |
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Figure 43. Days in inventory of 10 typical pharmaceutical enterprises, 2014 – 2015 Figure 44. Average collection period of 10 typical pharmaceutical enterprises, 2014 – 2015 Figure 45. Fixed asset turnover ratio of 10 typical pharmaceutical enterprises, 2014 – 2015 |
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| 3.4. Capital Structure | 95 |
| Figure 46. Self-financing ratio of 15 typical pharmaceutical enterprises, 2014 – 2015 | |
| 3.5. Solvency Ratios | 97 |
| Figure 47. The solvency ratio of 10 typical pharmaceutical enterprises, 2014 – 2015 | |
| 3.6. Return Ratios | 99 |
| Figure 48. ROA and ROE ratio of 10 typical pharmaceutical enterprises, 2014 – 2015 | |
| 4. Appendix | 101 |
| Reporter Disclaimer | 112 |
– DHG Pharma JSC
– Imexpharm Pharma JSC
– Domesco Medical Import-export JSC
– S.P.M JSC
– TRAPHACO JSC
– OPC Pharma JSC
– Lam Dong Pharma JSC (Ladophar)
– Ha Tay Pharma JSC (Hataphar)
– Ben Tre Pharma JSC (Bepharco)
– Vimedimex Pharma JSC
