Under the impact of the COVID-19 pandemic, Vietnam's pharmaceutical industry during the past 2 years faced many difficulties when the supply chain is broken, the price of raw materials and transportation increased, along with regulations on disease prevention. As a result, the pharmaceutical market stagnated heavily.
Entering 2022, when the pandemic is gradually over, along with the Government promoting the completion of vaccine coverage, adding a new economic stimulus package, and shifting the strategy from "Zero COVID" to "living safely with the pandemic", Vietnam’s pharmaceutical industry is forecasted to gradually recover.
According to the results KIS Vietnam Securities Corporation collected from 29 listed companies in the pharmaceutical industry, in the first quarter of 2022, Vietnam's pharmaceutical industry revenue decreased by 10.7% compared to the same period last year and 12.4% over the previous quarter. Net profit grew positively by 25.4% over the same period in 2021.
According to estimates of SSI securities, the business results of pharmaceutical companies in Vietnam will be driven by high growth in the first half of 2022 due to good sales in the pharmacy channel.
In the recent pharmaceutical industry update analysis report, SSI's analysis team estimated that in the first quarter of 2022, Vietnam’s total pharmaceutical sales increased by 7% over the same period, of which revenue from the pharmacy channel increased by 23%, and the hospital channel was down 5% over the same period in 2021. Pre-COVID-19, Vietnam's pharmaceutical sales increased by an average of 13% per year, with revenue from the pharmacy channel increasing only about 6% per year.
The outbreak of the Omicron variant, in addition to low hospitalization rates and commercialization of COVID-19 drugs such as Favipiravir/Molnupiravir, resulted in a spike in pharmacy sales and maintained a stable industry revenue. On the other hand, hospital visits recovered relatively slowly due to tightening social distancing policies in the provinces in the first quarter of 2022 but gradually recovered quickly after Vietnam fully reopened in April.
SSI said that according to business results from listed pharmaceutical companies, revenue growth at pharmacy channels of IMP, DBD, and TRA in the first quarter of 2022 reached 34%, 53%, and 29%, respectively, over the same period in 2021, while revenue growth at the hospital channel was lower, at -44%, 8%, and 41%.
Sacombank Securities Joint Stock Company (SBS) assesses that the pharmaceutical industry has a lot of growth potential for both manufacturing enterprises and retail groups due to its large scale. Vietnam's population is large, and the population is aging rapidly.
Continued increases in household income will encourage increased spending, especially in the health sector, and demand for health and social care also increases with age. Vietnam is one of the countries with the fastest population aging in the world with people aged 60 and over accounting for more than 12% of the population as of 2021. By 2050, this number is forecasted to increase to over 25%.
The need for health care and social care increases with age. The Vietnamese healthcare market is growing rapidly. Total spending on health increased from 16.1 billion USD in 2017 to more than 20 billion USD in 2021. Pharmaceutical spending also increased to more than 6.6 billion USD in 2021.
In 2022, when the pandemic is over, there will be more positive signals for the pharmaceutical industry than in 2021. If the pharmaceutical industry in 2021 is considered difficult to have breakthroughs and differentiation among businesses, the outlook for 2022 was more prominent.
The new generation of free trade agreements (FTAs) that Vietnam has signed will be the growth engine of the pharmaceutical industry in the coming time when creating favorable conditions for pharmaceutical enterprises to expand export markets and develop export markets. develop distribution network, access more capital, technology, and high-quality human resources towards higher standard product lines such as EU-GMP, and Japan-GMP.
It is forecast that the scale of Vietnam's pharmaceutical industry will reach approximately 141,400 billion USD, up 9.2% over the same period, coming from the continued growth in demand for products to support resistance and disease prevention.
Compiled by VietnamCredit