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Vietnam is the fastest-growing medicine market in Asia, ranked 17th out of 175 countries in the world with a CAGR (compound annual growth rate) of 14.1% in the 2010-2015 period.
With 160 factories meeting WHO-GMP standards, the domestic drug output just can meet 45% of the demand.
Therefore, experts believe that the drug market would witness a growth rate of no less than 17% per annum in 2017 and the next few years, and a CAGR of 11.8% in 2016-2020.
By the end of 2015, Vietnam had over 40 FDI projects in the pharmaceutical industry.
The largest projects include one of Sanofi with investment capital or US$80 million and the one of Nipro, US$250 million. There is also a growing tendency of foreign investors buying into Vietnamese pharmacy companies.
However, foreign investors complain that current laws make it difficult to make investment in Vietnam.
Adam Sitkoff from Amcham pointed out that Decree 54 that guides the implementation of the Pharmacy Law includes provisions which are not in line with the law.
He said the implementation of the decree forced foreign investors to stop providing storage and transport services though they had been licensed, thus causing the loss of hundreds of millions of dollars and interrupting the supply of thousands of essential drugs.
Lawyer Le Net also warned that the unreasonable regulations will adversely affect FDI attraction.
According to Net, Decree 54 stipulates that establishments which don’t distribute drugs must not carry out activities related to distribution, such as transportation and preservation.
This means that one can distribute drugs but is not allowed to transport and preserve them.
He said that the drug quality may be affected if preservation is not implemented by professional units, but by import companies.
“It is necessary to strictly observe the Pharmacy Law and continue allowing foreign-invested enterprises to provide drug transportation and preservation services,” Net said.
He also said that the retroactive principle, if applied to foreign invested enterprises which have been licensed in Vietnam to protect investors, will help foreign invested enterprises easily access the Vietnamese drug market.
Nguyen Van Hau from MOH admitted that the problems exist have affected foreign investment in the pharmacy sector.
The pharmaceutical industry is among the most profitable business fields. OPC estimates profit of VND103 billion in 2017, while Cuu Long Pharmacy plans the profit of VND96 billion.
