Pharmaceutical industry development demands strategy Pharmaceutical businesses need to capitalize on the lucrative domestic market, with consumers spending US$2.4 billion on medicines. Experts say improving infrastructure and upgrading technology are imperative if the Vietnamese pharmaceutical industry is to avoid total domination by international pharmaceutical conglomerates. Vietnam’s 178 medicine production businesses include 98 new drug manufacturers, 80 drug preparation companies, and 30 traditional medicine producers. The nationwide distribution network covers 2,200 distributors and 43,000 retailers. But the Vietnamese pharmaceutical industry still fails to meet the growing domestic demand for high-quality pharmaceuticals. According to the Ministry of Health’s Pharmaceutical Management Department, the Vietnamese pharmaceutical industry has successfully met international standards for Good Manufacturing Practices (GMP), Good Laboratory Practices (GLP), and Good Storage Practices (GSP). Domestic pharmaceutical businesses continue to ramp up investment and apply technological innovations to high-quality medicine production. Despite this rapid development, the Vietnamese pharmaceutical industry is still considered fledgling when compared to medicine production in the world’s most developed nations. The World Health Organisation (WHO) and the United Nations Conference on Trade and Development (UNCTAD) rate the Vietnamese pharmaceutical industry at 2.5–3 out of five possible grades—slightly above average. Former Deputy Health Minister Professor Le Van Truyen says Vietnam lacks a pharmaceutical material and ingredient production industry. Up to 90 percent of the country’s pharmaceutical materials are imported from China and India, limiting domestic businesses’ attempts to maintain resource supplies and produce medicines with high added value. Truyen says domestic pharmaceutical businesses meet only 60 percent of Vietnam’s consumer demand, with the remainder coming from foreign businesses. The majority of foreign pharmaceutical firms recognize the potential of the lucrative Vietnamese market. A Business Monitor International Ltd pharmaceutical market report reveals the Vietnamese pharmaceutical market earned US$1.2 billion in 2009. It predicts revenue will rise by an annual average of 25 percent, reaching US$1.7 billion this year and climbing beyond US$5 billion by 2015. These forecasts place Vietnam among the world’s fastest growing pharmaceutical and healthcare service markets. Vietnamese firms should take advantage of multinational pharmaceutical interest in developing nations and insert themselves into the space created within the global value chain. Professor Truyen states Vietnam’s pharmaceutical industry can improve its competitiveness by modernizing facilities and devising an overarching development strategy. Vietnam Pharmaceutical Association Chairman Tran Tuu says the domestic pharmaceutical industry could benefit from medicine manufacturing’s shift away from more developed nations to emerging Asian powers like India, China, and the Republic of Korea. This justifies transforming the pharmaceutical industry into a key sector of the national economy by 2020. Set targets are essential in the globalized context of increasingly fierce competition, Tuu notes. VOV