The Vietnam Pharmaceuticals Market is improving quickly due to some important reasons. The market is expected to grow from USD 7.60 its initial value in 2024, to USD 12.12 billion by 2030—achieving a compound annual growth rate (CAGR) of 7.96% during this period. This is primarily attributed to Vietnam’s increased spending on healthcare as a result of the changing population dynamics, including the growing need for affordable healthcare services in the country. Moreover, the market is supported by government initiatives aimed at improving infrastructure in healthcare and enhancing healthcare service delivery, increasing the availability of basic medicines and healthcare services, and ultimately promoting a more affordable healthcare system.

In addition, Vietnam's move towards universal coverage contributes significantly to the complex interplay of market forces. This particular policy is intended to improve the availability of services throughout the country so that more people can access needed medicines. With the development of healthcare facilities and the improvement of policies to nurture the industry, these development opportunities will be used by drug companies; therefore, the market will grow strongly. This set of circumstances is what makes Vietnam an emerging market in the pharmacy industry and stimulates domestic as well as foreign investments that seek to adequately supply the changing healthcare demands of the country.

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Market Driver Analysis

Demographic Factors and Medical Care Expectations Grow

The country's growing middle class and movement from rural to urban areas are driving demand for high-quality healthcare services. The expanding population of more than 100 million people has a significant impact on pharmaceutical market growth. Furthermore, increased disposable money adds value to over-the-counter and prescribed pharmaceuticals, increasing sales of pharmaceutical products. Rising urbanization has a direct correlation with the country's consumption of healthcare services. According to the World Bank, payments for healthcare in Vietnam accounted for 6.6 percent of the country's GDP in 2022. These variables, when combined, raise the need for superior treatment alternatives and better preventative care measures, resulting in growth in the pharmaceutical business. The government is trying to enhance the affordability and accessibility which gives the healthcare services profound impact to the citizens in Vietnam.

Increasing Cases of Chronic Illnesses

The increased prevalence of chronic diseases in Vietnam is also a major element driving the expansion of the Vietnamese pharmaceutical market. Cardiovascular illnesses remain the leading cause of death in the region, accounting for 31% of all deaths in 2021. In addition, diabetes, cancer, and respiratory illnesses are becoming more common, owing to chronic stress, an aging population, and environmental changes. This transition has raised demand for both generic and branded pharmaceuticals, hence facilitating market expansion. There is a greater emphasis on disease treatment and early detection. Therefore, many pharmaceutical firms in Vietnam are keen on recovering these investments with advanced therapies by R&D directed towards the requirements of the country’s healthcare system. The development of specialized treatment clinics and hospitals are also supportive to the growing need for sophisticated pharmaceutical products.

Universal health coverage and government support. Vietnam's pharmaceutical industry is influenced by Vietnamese governments. The implementation of Universal Health Coverage (UHC) has increased access to critical medicines and healthcare services. As of 2023, 91% of the population was covered by UHC, complicating access to affordable treatments. Other government initiatives, such as increased funding for the health-care sector and policy reforms, have encouraged local and foreign investors in the pharmaceutical industry. Policies that support local pharmaceutical manufacturers also aim to reduce import dependence and self-sufficiency in Vietnam. Such policies are expected to further strengthen the market in the following years.

E-Pharmacies and Digital Transformation

The rapid adoption of digital health technologies is transforming Vietnam's pharmaceutical industry. The development of e-pharmacies and telemedicine services has increased medication access, particularly in remote and underserved areas. Consumers can now buy prescription and over-the-counter medications online, reducing barriers to healthcare access. Furthermore, as more patients actively manage their health and healthcare, direct-to-consumer healthcare technologies such as AI-powered diagnostics and mobile applications are becoming more prevalent. Healthcare providers use digital tools to automate supply chains, improve drug distribution, and provide personalised healthcare services that are more convenient and cost-effective. More technological advancements will continue to boost productivity in Vietnam's pharmaceutical industry.

Examining the Shifts in the Market

Several VIOPHAR Market Study factors suggest that the Vietnam pharmaceuticals market is undergoing multiple transformative phase in the Vietnam pharmacy market. To begin with, there is an increased consumption of generics because they are relatively cheaper, with generics making up more than 60 percent of the market share in 2023. This trend is, however, aided by government policies aimed at promoting the use of generics so as to lower “costs of hospitalization, drugs, and utilities.” Groceries and Health Insurance Expenditure”. The emergence of e-pharmacies constitutes another development, whereby online sales are growing at the rate of 20 percent annually. In addition, there is heightened investment into the manufacturing of drugs by local firms as DHG Pharma and Traphaco are increasing their production facilities. There is also a remarkable growth in the consumption of over-the-counter (OTC) drugs because of the rising trends in self-medication and awareness regarding health. Last but not least, collaborations between local and foreign players such as those of Sanofi Vietnam are supporting the changes by boosting the availability of advanced therapies and thereby fostering innovation and access to sophisticated treatments.

Pharmaceutical Market Challenges

The pharmaceuticals market in Vietnam presents unparalleled prospects. However, it is bound by a number of problems. To begin with, the industry is highly fragmented, with more than 200 local manufacturers creating severe competition and price wars. In addition, the set of regulations and lengthy approvals for new drugs can postpone entry to the market. Third, counterfeit drugs with an estimate 10 to 15% mark are considerable undermining trust. In addition, the industry is heavily reliant on imported primary materials, which make up 70% of the supply, creating vulnerabilities to supply chain interruptions, currency shifts, and volatility. Finally, although healthcare infrastructure is still on growing, urban-rural divides remain, leading to lack of access to quality care in remote regions.

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Market Segmentation

• By Drug Type:
  • Generic Drugs
  • Branded Drugs
• By Product Type:
  • Prescription Drugs
  • Over-The-Counter Drugs
• By Application:
  • Cardiovascular
  • Musculoskeletal
  • Oncology
  • Anti-infective
  • Metabolic Disorder
  • Others
• By Distribution Channel:
  • Retail Pharmacy
  • Hospital Pharmacy
  • E-Pharmacy

Regional Analysis

The Vietnam pharmaceuticals market is characterized by significant regional disparities in healthcare access and infrastructure. The southern region, particularly Ho Chi Minh City, dominates the market, accounting for over 40% of pharmaceutical sales in 2023. This is attributed to the region’s higher population density, better healthcare facilities, and greater economic activity. The northern region, including Hanoi, follows closely, contributing around 35% of the market share. The central and rural regions, however, lag behind due to limited healthcare infrastructure and lower income levels. For instance, in 2022, only 30% of rural households had access to modern healthcare facilities compared to 70% in urban areas. The government’s focus on improving healthcare access in rural areas through initiatives like the National Health Insurance Program is expected to bridge this gap. Additionally, the Mekong Delta region is emerging as a growth hotspot, driven by increasing investments in healthcare infrastructure and rising awareness of chronic diseases.

Primary Catalysts and Hindrances

Catalysts: Rising healthcare expenditure, government support for universal health coverage, increasing prevalence of chronic diseases, and growth of e-pharmacies.
Hindrances: Regulatory challenges, counterfeit drugs, reliance on imported raw materials, and rural-urban healthcare disparities.

Key Player Analysis

• Bayer Vietnam Ltd.
• DHG Pharmaceutical Joint Stock Company
• Traphaco Joint Stock Company
• Pharmaceutical Corporation Ha Tay
• Domesco Medical Import Export Joint Stock Corporation (DOMESCO)
• OPC Pharmaceutical Joint Stock Company
• Sanofi Vietnam
• Mekophar Chemical and Pharmaceutical JSC
• Imexpharm Pharmaceutical Joint Stock Company
• Pymepharco Joint Stock Company

The Vietnam pharmaceuticals market is highly competitive, with both domestic and international players vying for market share. Bayer Vietnam Ltd. and Sanofi Vietnam are leading international players, leveraging their global expertise to introduce innovative therapies. Domestic players like DHG Pharmaceutical Joint Stock Company and Traphaco Joint Stock Company dominate the generic drug segment, supported by their extensive distribution networks and cost-effective production capabilities. Domesco Medical Import Export Joint Stock Corporation (DOMESCO) and Mekophar Chemical and Pharmaceutical JSC are focusing on expanding their product portfolios and export capabilities. Imexpharm Pharmaceutical Joint Stock Company and Pymepharco Joint Stock Company are investing in R&D to enhance their competitiveness. Collaborations between local and international players, such as Sanofi’s partnership with Vietnamese firms, are driving innovation and market growth.

Future Outlook

• Market Size and Share: The market is expected to grow from USD 7.60 billion in 2024 to USD 12.12 billion by 2030, with a CAGR of 7.96%.
• Trends: Increasing adoption of generic drugs, growth of e-pharmacies, and rising demand for OTC drugs.
• Growth Opportunities: Expansion in rural markets, investment in local manufacturing, and partnerships with international players.
• Challenges: Regulatory hurdles, counterfeit drugs, and supply chain disruptions.
• Key Drivers: Rising healthcare expenditure, government initiatives, and increasing prevalence of chronic diseases.

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