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Vietnam Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Jan 2010, Pages: 94
The Vietnam Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Vietnam's pharmaceuticals and healthcare industry.
Vietnam’s pharmaceutical market was valued at VND27,361bn (US$1.54bn) in 2009. Over the forecast period to 2014, BMI expects pharmaceutical consumption to reach VND56,931bn (US$3.04bn), equating to a CAGR of 15.8% in local currency and 14.6% in US$. Our longer term forecast is for the market to reach VND107,395bn (US$6.61bn) in 2019, the equivalent of a CAGR of 14.7% in local currency between 2009 and 2019.
Inflation will be a major factor in these high nominal market growth rates. BMI expects general inflation to spike at 11.5% in 2011 before dropping back to 5% per annum in the latter half of the 10 year forecast period. Higher costs of production and the lack of a strict government policy on pharmaceutical price controls makes it likely that retail pharmaceutical prices will rise over the forecast period.
Rising pharmaceutical prices continue to concern Vietnam’s local press. In November 2010, it was reported that the prices of at least 39 pharmaceuticals had increased. The price increases were attributed to the higher cost of ingredients and imported materials following variations in the USD/VND rate. However, the government once again came in for criticism for failing to control the prices of essential medicines.
In BMI’s Q111 pharmaceutical Business Environment Ratings, Vietnam was placed 13th out of 17regional markets. Due to a combination of economic and regulatory drawbacks, Vietnam is a relatively high-risk proposition. Reflecting these risks, the Health Ministry of Vietnam has been accused by the government's inspectors of overpaying for 2mn doses of the antiviral drug Tamiflu (oseltamivir phosphate) during the avian influenza scare of 2005-06. The inspectors alleged that the ministry purchased inferior versions of the drug from an Indian firm and accepted bribes from the manufacturer. Domestic firms are investing in improved production facilities in order to comply with government demands to meet international GMP standards and to boost export orders. For example, Danapha-Nanosoma Pharmaceutical completed its new WHO-GMP compliant plant in October 2010.
The factory was constructed with US-based partner AQP. The US firm is providing the technology and equipment for the plant as part of the investment and technological transfer co-operation agreement. Danapha holds 51%of the joint venture; AQP has a 24% share and Vinapharm 25%.
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