Viet Nam’s pharmaceutical market is estimated to record revenue of US$5.2 billion in 2017, a 10 per cent increase from last year. The market is set for double digit growth within the next five years, according to Viet Nam Report Company (VNR).

The country’s demand for drugs is expected to rise due to increasing population and income. The average spending of Vietnamese on drugs rose from $9.85 in 2005 to $22.25 in 2010, double to $37.97 in 2015 and $56 in 2017 each per year.

The average growth rate of spending on drug was 14.6 per cent in 2010-15 and is set to maintain a rate of at least 14 per cent until 2025. Spending is forecast to double to $85 per person in 2020 and $163 in 2025.

The VNR on Monday launched the list of the 10 most prestigious pharmaceutical firms in Viet Nam in 2017. Its survey of the top 10 companies showed that most local pharmaceutical companies have high hopes for higher development in 2018, with some 75 per cent of firms expecting more than 10 per cent growth.

The market is considered promising to foreign investors and multinational groups.

The sector is predicted to see big changes in 2018 with foreign firms like Sanofi, Taisho and Abbott entering the market, pressuring local companies, the company said.

More than 90 per cent of the surveyed enterprises said the process for bidding for hospital dugs and dependence on imported materials are the biggest barriers for pharmaceutical companies. The dependence has made the sector vulnerable to foreign exchange rate changes and high import costs that make Viet Nam’s pharmaceutical products 20-25 per cent higher than in China and India.

The survey also revealed that research and development activities have been lacking due to a shortage of capital, human resources and technologies, which are strengths of foreign firms.

However, co-operation with foreign companies is expected to help local firms improve their products’ quality, thus increasing their competitiveness.

More than 80 per cent of the companies said research for new products would be their top priory for 2018. Some 67 per cent of the enterprises said they would improve through the retail system.

They also called for support from the Government and links among businesses for sustainable development. — VNS