Over the past 10 years, Vietnam’s pharmaceutical industry has been one of the fastest growing pharmaceutical industries in the world, and is an attractive destination for foreign investors. The value of Vietnam's pharmaceutical industry is forecasted to continue to grow thanks to a large population, rapid population aging rate, along with increasing concerns about the health care of the people and the State.
Since the amendment of the Pharmaceutical Law took effect, there have been many M&A deals in Vietnam’s pharmaceutical industry. M&A is an effective way to reduce the time and cost of market entry for foreign investors, and it brings more competitive advantages for domestic enterprises through the transfer of science & technology, and capital.
Imports play an important role in the value chain of Vietnam's pharmaceutical industry. Most high-end pharmaceutical products are imported from France, Germany and India because domestic companies still are still lacking in production technology, and the number of companies producing chemicals for drugs is low. About 80 to 90% of active pharmaceutical ingredients (API) are currently imported from China and India. Therefore, Vietnam's pharmaceutical industry is believed to be vulnerable to sudden market changes.
As for the pharmaceutical retail market, selling of drugs and medicines without prescription is still rampant and difficult to control, so errors in content, dose number, and drug usage cannot be avoided. The most dangerous problem is the overuse of antibiotics. In addition, only a small number of pharmacies comply with regulations on providing business information through the state system, causing difficulties to the management.
Most of domestic pharmaceutical products are generic drugs because Vietnamese pharmaceutical companies have limited technology and capital to produce brand name drugs. With the government's efforts to increase access to lower cost healthcare services, the prescription drug segment is expected to continue to dominate the market over the next 10 years. Meanwhile, over-the-counter drugs still keep only a small proportion in total pharmaceutical consumption.
It is predicted that in the coming time, the Vietnamese pharmaceutical market will still have many potentials to develop, and create many long-term opportunities for investors. After the Vietnam - EU Free Trade Agreement (EVFTA) is effective, there will be more M&A deals in the pharmaceutical sector.
Top 10 largest companies in Vietnam’s pharmaceutical industry were selected by VietnamCredit based on their size, credit ratings, and business performance in 2018, 2017 and 2016.
DHG Pharma was established in 1974 as a state-owned company. It was equitized in August 2004. In December 2006, the company was listed on the Ho Chi Minh Stock Exchange under the code DHG. Since its establishment, DHG Pharma has grown strongly. In December 2018, the company dissolved 5 subsidiaries. Three of them were merged into the parent company.
Distribution network of DHG Pharma is widely developed nationwide. Currently, the company has one subsidiary and one associate. The main business activities of DHG Pharma are to manufacture pharmaceuticals, to import and sell pharmaceuticals, to supply medical equipment, functional foods and cosmetics. The main import markets of the company are India, the US and China.
Imexpharm Pharmaceutical Joint Stock Company was established in 1977 in Dong Thap province, and was equitized in 2001. Imexpharm's stocks have been listed on the HOSE since 2006. The company specializes in manufacturing and trading pharmaceuticals, raw materials and laboratory chemicals in which antibiotics, antipyretics, pain relievers and special drugs account for 80% of total output.
The size of the company has been significantly expanded over the years. Currently, Imexpharm has 4 factories and 25 retail branches in provinces and cities in Vietnam. In addition, Imexpharm's products have not only been distributed domestically but also exported to overseas markets such as the Middle East and Africa.
Established in 1999, Traphaco JSC is now one of the leading companies in the field of pharmaceutical manufacturing. Traphaco's main products are not only supplied to the domestic market, but also exported to many countries such as Russia, Ukraine, Belgium, Switzerland and Africa. The company owns 2 subsidiaries and 2 factories.
Domesco’s stocks have officially been traded on the Ho Chi Minh Stock Exchange since December 4, 2006, under the stock code DMC. Previously, CFR International Spa was the largest shareholder of the company with 51.69% ownership. After that, Abbott Laboratories (Chile) Holdco Spa acquired all shares of CFR International Spa and became the largest shareholder with 51.69% ownership.
Domesco is a company that manufactures, trades, imports and exports drugs, raw materials, chemicals, vaccines as well as biological products. Domesco products range from capsules, tablets, coated tablets to intestinal coated and soluble tablets. It is known as a leading manufacturer of cardiovascular and endocrine drugs in Vietnam.
Founded in 1995, Bidiphar has grown to be a highly reputable pharmaceutical brand in Vietnam. The company has made a large investment to develop modern production technology. Bidiphar's factories are equipped with state-of-the-art equipment in a closed process that meets GSP and GLP standards.
Bidiphar's products range from antibiotics, cardiovascular drugs, vitamins, minerals, and endocrine hormones to lipid disorders. The company also trades in medical materials, equipment and pharmaceutical materials. Medicinal materials and medical equipment of the company are imported from India, Korea, France, America and China.
Bidiphar's products are mainly supplied to the domestic market. The annual export turnover of the company is only about USD 2-3 million. Bidiphar's main export markets are Laos, Myanmar, Cambodia, South Africa, Mongolia, Italy, Canada and Nigeria.
Vimedimex Medi-Pharma Joint Stock Company, formerly known as Vietnam Medical Import Export Joint Stock Company, was established in 2006 and has grown significantly to become the leading pharmaceutical distributor. The company's main products are pharmaceuticals, active pharmaceuticals, medical equipment, medical devices, functional foods and cosmetics. The company's stocks have been listed on the HOSE stock exchange since August 17, 2010.
Vietnam Pharmaceutical Corporation has been in the industry for 48 years. Since 2017, the company has listed its stocks on UpCOM. Currently, the company is worth VND 2,370 billion and the government (represented by the Ministry of Health of Vietnam) owns 65% of the company's shares.
Sanofi-Synthelabo Vietnam was established in 1993 as a joint venture company. In 2007, the company changed its business type to a joint stock company. In Vietnam, Sanofi maintains a leading position in the pharmaceutical market with a diversified portfolio of more than 150 product categories, including prescription drug products, non-prescription drugs and vaccines.
The company focuses on products in many areas of treatment such as cardiovascular disease, thrombosis, diabetes, cancer, central nervous system disorders, internal medicine, and rare diseases. Besides, the company imports a number of semi-finished products from SPI to process finished products, produces cosmetics for domestic consumption and export, and provides warehousing and transportation services for the Sanofi-Aventis Group products imported by Sapharco.
Established in 2001, Ha Tay Pharmaceutical is one of the manufacturers of medicines and chemicals for pharmaceutical and medicinal production in Vietnam. Most of the raw materials for the company's production are imported directly from several countries such as China, Taiwan and India. The company's products are mainly distributed in the domestic market through its branches of pharmacies as well as a network of agents across the country.
CPC1 was established in 1956 as a state-owned company. It was equitized in 2016. Since June 2018, the company has listed its stocks on UPCOM under the stock code DP1.
The company specializes in trading pharmaceutical products in Vietnam, and providing import consignment services. Most of CPC1 products are imported from overseas. The company's distribution network includes branches, warehouses, wholesalers and representative offices in many parts of Vietnam.
>> Vietnam’s pharmaceutical industry report
Source: Vietnam’s Pharmarceutical Industry Report - VietnamCredit