Recent Trends in the Development of the Pharmaceutical Industry in Vietnam
Recent Trends in the Development of the Pharmaceutical Industry in Vietnam
In 2020, the global pharmaceutical market reached approximately USD 1.265 trillion, showing steady revenue growth over the past two decades. Predictions suggested that the economic crisis caused by the COVID-19 pandemic would not significantly impact the industry in the short term. The increasing use of big data and artificial intelligence in disease research and the substantial development of new drugs have accelerated the growth of the pharmaceutical industry.
Impact of the COVID-19 Pandemic on the Pharmaceutical Industry
The global pharmaceutical market is expected to continue growing at a compound annual growth rate of 10.5% over the next 5-10 years. Overall, there is little fluctuation among leading pharmaceutical companies. The top revenue-generating pharmaceutical companies include Pfizer, Merck, and Johnson & Johnson, all based in the United States, and two Swiss giants, Roche and Novartis. While Pfizer led globally for many years, it was surpassed by Swiss companies in 2019. Roche, the world's largest biotech drug manufacturer, is also a global leader in cancer-related products.
According to the IQVIA Institute (formerly IMS Health and Quintiles), Vietnam is among the Pharmerging Markets, a group of 17 countries with the highest pharmaceutical industry growth rates worldwide. Vietnam is placed in the third group among these 17 countries, with a growth rate of 14%, ranking just behind Argentina and Pakistan.
The growth potential of the pharmaceutical industry in Vietnam is highly regarded due to several factors. Vietnam's current population is approximately 97.3 million people, with an average income per capita of USD 2,750 in 2020. The average pharmaceutical expenditure per person in Vietnam was around USD 75 in 2019 and increased to USD 97 in 2021, significantly lower than the global average. Vietnam is one of the fastest-growing economies in the region, with an average growth rate of 14.8% from 2010 to 2019. Maintaining an average growth rate of at least 14% until 2028 is projected to reach USD 111 in 2022 and USD 248 in 2028. With a large population and an economy with significant growth potential, the pharmaceutical market in Vietnam is assessed to have ample room for future development.
Currently, the demand for nutritional supplements and generic drugs (used to treat the same type of disease) is creating new opportunities for latecomers and increasing competition in the industry. Simultaneously, pharmaceutical raw materials from natural sources and plant extracts are being prioritized for research and development to create new drugs that are more health-friendly and have fewer side effects.
In conclusion, Vietnam's pharmaceutical industry has significant development potential, contributing to creating many job opportunities for pharmaceutical professionals. However, there are limitations in terms of investment expansion, increased productivity, and upgrading to GMP-standard factories, as well as research and development activities. In this context, pharmaceutical enterprises need to develop appropriate business strategies, enhance risk management, especially in raw material reserves, and leverage information technology in production and business to achieve the development goals of each enterprise, aligning with the industry's development trends and global economic integration.
