Three leading businesses in the top 10 distribution and trading of pharmaceutical products, medical equipment and supplies companies in Vietnam are Vimedimex Medi - Pharma Joint Stock Company, Central Pharmaceutical Joint Stock Company No.2 and Khuong Duy Pharmaceutical Co., Ltd.
Top 10 pharmaceutical companies are evaluated and ranked based on 3 main criteria:
Financial capacity shown in the latest financial statements;
Media reputation assessed by Media Coding method which codes articles about the company on influential media channels;
Survey of pharmacists, industry experts and enterprises conducted in November 2019 on capital size, market, labor force, revenue growth rate, profit, operational plan in 2020.
According to statistics of the Drug Administration of Vietnam, as of May 16, 2019, Vietnam had about 180 pharmaceutical manufacturing enterprises and 224 domestic factories meeting GMP (Good Manufacturing Practices) standard. Domestic pharmaceutical companies mainly produce drugs under simple dosage forms, functional foods, and generic drugs (pharmaceuticals out of exclusive protection period).
Regarding the drug distribution market, drug distribution for hospitals (ETC channel) through bidding accounts for about 70% of the drug market while retail pharmacies (OTC channel) holds only 30%. There are about 57,000 pharmacies and drugstores nationwide.
The development of the ETC channel is due to the Government's health insurance policy. The higher the proportion of people applying for health insurance, the more money will be spent on ethical drugs in the future. The growing private hospital sector has contributed to increasing medicine in the treatment sector. In addition, increasing health awareness will lead to more people coming to the hospital.
Although facing many difficulties in production and technology, aging population, high income, environmental pollution and increasing concern of over 97 million people on health issues will be the driving forces for the pharmaceutical industry experience strong growth in the future.
Over the next 5 years, Vietnam's pharmaceutical industry is expected to continue to be among the 20 countries with the strongest and most stable growth in the world. Forecast from market research firm IBM on the size of the pharmaceutical market, Vietnam's pharmaceutical industry will reach USD7.7 billion in 2021, and USD16.1 billion in 2026, with a double-digit growth rate of 11% (in Vietnamese Dong).
Market research firm IMS Health also forecasts that per capita pharmaceutical spending in Vietnam will increase to US50 / person / year by 2020.
In addition, major pharmaceutical manufacturers including Hau Giang Pharmaceutical, Binh Dinh Pharmaceutical, Imexpharm, Pymepharco ... have invested in upgrading their factories which are expected to be completed by the end of 2019 - early 2020, promising to create new developments for domestic pharmaceutical products, improving the competitiveness with imported products. 100% of experts said that Vietnam's pharmaceutical industry in 2019-2020 will continue to grow at double digits, of which nearly 80% of experts believed that growth will continue to be stable at 10-15%.
5 main business trends of the pharmaceutical industry in the coming time are: Expanding OTC channel - direct sales through pharmacies; Developing pharmaceutical retail chains; Applying information technology in expanding online pharmaceutical market; Developing products of natural origin, functional foods and cosmetics. Accordingly, there will be more M&A deals in the pharmaceutical industry in the coming time.
In this context, 63.64% of businesses choose to research & develop new drug products as well as expand OTC channel in 2020. In addition, 45.45% of businesses choose to develop strategic product groups with high sales, high profits and boost the export of medicines while 36.36% will give priority to invest in producing raw pharmaceutical materials, machinery and drug production lines.
Experts within the pharmaceutical industry also proposed key solutions to develop the industry in the future, including completing the legal corridor system on the production and distribution of drugs, information transparency, completing bidding process for drug distribution in hospitals (ETC channel), creating a fair competitive environment among enterprises.
Vietnam's pharmaceutical industry has a lot of potential for development, however, at present, investment in increasing capacity, research and development activities, and marketing strategies is relatively limited. In addition, the fierce competition with imported drugs, dependent material sources, and inadequate policies are quite a challenge for businesses.
Facing such difficulties, enterprises in the pharmaceutical industry need to formulate appropriate business strategies, enhance risk management, especially in the storage of raw materials and the application of information technology in manufacturing and trading, improving financial capacity and quality of human resources to achieve the development goals as well as catch up with the development trend of the industry and global economic integration.
Keep reading: Top 5 Biggest Insurance Companies In Vietnam In The Early Stage Of 2018