Vietnam’s pharmacy industry sees rapid growth Vietnam is now an attractive drug market with new policies designed to create a healthy, competitive market for manufacturers.   Vietnamese spend more money on drugs BMI Research predicted that the growth rate in spending on drugs in Vietnam in the 2017-2021 period would be around 11.5 percent per annum.  The figure is lower than the average growth rate of 15.6 percent in 2012-2016, but still higher than the 6-9 percent growth rates seen in pharma-emerging countries, and the 4-7 percent average growth rate in the world, according to IMS Market Prognosis. The level of spending on prescribed drugs is expected to grow by 11.9 percent per annum, or higher than the growth rate of the whole market. Vietnam is an attractive market with high population, increased life expectancy and heightened awareness about health protection.  Meanwhile, spending in Vietnam remains low, less than $40 per head per annum, or just equal to half of that in pharma-emerging countries. Prescribed drugs now account for 74 percent of total spending on drugs, according to BMI with the growth rate of 15.9 percent in 2012-2016, and the expected growth rate of 11.9 percent per annum.  Of these, generic drugs, which account for more than 70 percent of total value, is expected to see the 12.9 percent growth rate per annum.  Spending in Vietnam remains low, less than $40 per head per annum, or just equal to half of that in pharma-emerging countries. The prediction coincides with the government’s policy on prioritizing the production of generic drugs domestically at reasonable prices. Domestically made drugs are mostly generic, with low value, which account for less than 50 percent of the total expenditures on drugs. Under the national strategy on pharmacy industry development by 2020, Vietnam strives to raise the percentage of domestically produced drugs over total drug value to 80 percent by 2020.  This could be seen as a great opportunity for domestic pharmacy firms, though big challenges are anticipated. A report found that health insurance coverage has increased from 65 percent in 2012 to 85.3 percent by the end of October 2017. It is expected that 90 percent of people will take health insurance policies by 2020.  The medication costs from the Health Insurance Fund are estimated to account for more than 40 percent of the nation’s total spending on drugs. In 2017, the cost of medical treatment paid by the Health Insurance Fund was estimated at VND90 trillion, of which 50-60 percent was spent on medicine. Vietnam prioritizes the use of domestically produced generic drugs. According to Kim Eng Retail Research, the domestic pharmacy firms which have products meeting GMP-EU or PIC/s-GMP standards will have opportunities to expand their market share in hospitals.  Domestically made products have more competitive prices, which will help them win bids. Kim Chi, VNN