BMI's Executive Summary

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Vietnam is challenge to pharmaceutical firms, as evidenced by its lowly position on BMI's completely overhauled Business Environment Rankings for Q108. Negatives include erratic prices, counterfeit drugs and a large rural population. However, improvements are increasing in frequency. Perhaps of most significance is healthcare sector privatisation, which will boost competition and lower costs. The pharmaceutical market has current valuation of US$1.11bn and we forecast double digit growth through to 2012.

During Q407, BMI has revised its forecast for Vietnam's pharmaceutical import sector after new figures were released by the Health Ministry. Approximately US$777mn worth of medicine will be brought into the country this year, which is much higher than our previous estimate of US$657mn. Usually we would be concerned at this trend – which is frequently at the expense of the domestic industry – but local production is also up and the government is looking to increased foreign direct investment (FDI) by multinationals.

Smoking is a major problem. Between 30,000 and 40,000 people in Vietnam die of smoking-related diseases each year. However, there is distinct gender difference. While some 50% of males smoke, only 3% of females do. As a result, lung disease is on the rise. A recent study found that 5.2% of Vietnamese people over 40 – roughly 4mn individuals – have chronic obstructive pulmonary disorder (COPD). The country spends VND12bn (US$750,000) a year on COPD treatment and management.

There are approximately 41,500 drugstores in Vietnam, which equates to one outlet per 2,000 people, which is very impressive for a developing country. However, the country has a shortage of trained pharmacists. To rectify this situation, the Ministry of Health has set a target of 1.5 pharmacists per 10,000 people. To put this in perspective, there were 0.8 pharmacists per 10,000 people just two years ago.

An October 2007 study found that limited regulation of pharmacies, lack of market information and inefficient domestic production have caused medicine prices to increase dramatically over the past few years. The report also revealed that the difference in wholesale prices between domestic drugs and those imported by State pharmaceutical companies was 5-8%, while the difference between domestic drugs and those imported privately was 50-300%.

Contents

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Chapter 1 - Executive Summary

Vietnam Pharmaceutical & Healthcare Industry SWOT

Vietnam Economics SWOT

Vietnam Business Environment SWOT

Chapter 2 - Vietnam: Business Environment Rankings

Table: Asia Business Environment Rankings

Business Environment Ranking

Economics - Long-Term Risk

Politics - Long-Term Risk

Regulatory Barriers

Domestic Sector Threat

Market Growth Potential

Market Size Ranking

Chapter 3 - Market Summary

Chapter 4 - Regulatory Regime

Pricing & Reimbursement Issues

Intellectual Property Environment

Chapter 5 - Industry Trends & Developments

Healthcare Sector

Foreign Partnerships

Pharmaceutical Sector

Foreign Pharmaceutical Sector

Chapter 6 - Industry Forecast Scenario

Overall Market Forecast

Table: Vietnam Drug Market Forecast Indicators

Key Growth Factors - Pharmaceutical Industry

Table: Vietnam Health Expenditure Forecast Indicators

Key Growth Factors - Macroeconomic

Table: Output & Population

Prescription Market Forecast

Table: Vietnam Prescription Drugs Market Forecast Indicators

OTC Market Forecast

Table: Vietnam OTC Drugs Market Forecast Indicators

Generic & Branded Market Forecasts

Table: Vietnam Generics Market Forecast Indicators

Export/Import Forecasts

Table: Trade Data

Other Healthcare Data Forecasts

Table: Other Healthcare Data

Key Risks To BMI's Forecast Scenario

Chapter 7 - Competitive Landscape

Overview

Chapter 8 - Company Profiles

Leading Multinational Manufacturers

Pfizer

GlaxoSmithKline

Sanofi-Aventis

Novartis

Merck & Co

Indigenous Manufacturer Profiles

Vietnam Pharmaceutical Corporation (Vinapharm)

Vietnam OPV Pharmaceutical Co

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Pharmaceutical Industry

Sources

Chapter 10 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Chapter 11 - Country Snapshot: Vietnam Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Competitive Landscape for Asia Pharmaceuticals and Healthcare: Sample of Companies Ranked

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Cross-border analysis of regulatory systems comparing the patenting environment, summarising regional pricing and reimbursement factors and monitoring the growth of the Pharmaceuticals sector across the region. Company SWOTs cover leading multinational and national drug companies operating in each market.

Network of Asian Pharmaceuticals & Healthcare Sources

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BMI's Asian Pharmaceuticals Healthcare Reports are based on an extensive network of multilateral organisations, government departments, pharmaceuticals & healthcare industry associations, chambers of commerce and company reports. Information sources include: