BMI View: Leveraging Vietnam's National Expanded Immunisation Programme (EPI) will be of strategic benefit to multinational pharmaceutical firms with a strong vaccines portfolio. Government support for the initiative is expected to remain strong, which bodes well for firms as the EPI alleviates financial barriers that might dissuade patients from receiving treatment. A key risk to this approach stem s from potential protectionist measures implemented by the Vietnamese government as it seeks to encourage the inclusion of locally produced vaccines.
Headline Expenditure Projections
Pharmaceuticals: VND92.5trn (USD4.2bn) in 2015 to VND105.6trn (USD4.6bn) in 2016; +14.2% in local currency terms and +9.3% in US dollar terms. Forecast virtually unchanged from last quarter.
Healthcare: VND304.3trn (USD13.9bn) in 2015 to VND333.4bn (USD14.6bn) in 2016; +9.6% in local currency terms and +4.9% in US dollar terms. Forecast increased compared to the previous quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||3.810||4.220||4.610||5.060||5.650||6.390||7.190|
|Pharmaceutical sales, % of GDP||2.05||2.20||2.32||2.36||2.38||2.40||2.40|
|Pharmaceutical sales, % of health expenditure||29.0||30.4||31.7||32.7||33.5||34.1||34.5|
|Health spending, USDbn||13.130||13.880||14.560||15.480||16.850||18.720||20.830|
Risk Reward Index
Vietnam's Pharmaceutical Risk Reward Index score for Q316 is 48.3 out of 100. The country scored above average for overall market expenditure and sector value growth. Consequently, with this moderate score, Vietnam is ranked 13th (same as in the previous quarter) out of the 19 key Asia Pacific markets, level with Thailand and the Philippines.
In May 2016, the Ministry of Health called for further efforts to provide effective and safe vaccines under the National Expanded Programme on Immunisation (EPI) to all children in the country. While the scheme has gained traction, there remains an estimated 10% of 18-month-old children who have yet to receive their repeated vaccine doses for measles, diphtheria, pertussis and tetanus according to Deputy Minister of Health Nguyen Thanh Long.
The authorities noted that vaccines covered by the EPI scheme will be expanded to include the inactivated polio vaccine in 2017 with the possibility of including others, such as the avian influenza H5N1 vaccine.
In the Pharmaceutical Research and Manufacturers of America (PhRMA)'s Special 301 submission for 2016, the country was designated as a 'Watch List Country' - a similar status to South Korea and Australia. This perpetuates the status accorded to Vietnam since 2015, with many of the shortcomings characteristic of an emerging market such as low levels of intellectual property protection and discriminatory market access.
BMI Economic View
We maintain our expectations for the State Bank of Vietnam to lower its benchmark refinancing rate by a relatively shallow 50bps to 6.00% by the end-2016 as a disappointing GDP growth figure in Q116, subdued inflationary pressures, and a relatively stable currency will provide impetus for the central bank to act. However, concerns over reigniting the housing bubble will likely temper the bank's easing bent.
BMI Political View
The complete normalisation of bilateral ties between the US and Vietnam, as represented by the lifting of the arms embargo in Hanoi on May 23, will be beneficial for the advancement of trade relations between the two former wartime foes. It also demonstrates that the US is prioritising the improvement of defence cooperation with nations in the Asia-Pacific region as a means to counter China's military build-up in the disputed South China Sea.
The Vietnam Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Vietnam Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Vietnam pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Vietnam, to test other views - a key input for successful budgeting and strategic business planning in the Vietnamese pharmaceutical and healthcare market.
- Target business opportunities and risks in the Vietnamese pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Vietnam.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.