ROK poised to increase market share in Vietnam drug market
ROK poised to increase market share in Vietnam drug market
The Vietnam government issued new a new law effective July 1, 2017 that dramatically alters foreign sector involvement in activities of the pharmaceutical segment of the country’s economy.
At recent conference in Ho Chi Minh City, Ministry of Health officials discussed key aspects of the law, noting its implications for the domestic pharma segment and how Republic of Korea companies are poised to benefit most.
Certificate of Pharmacy Business Eligibility
Obtaining a certificate of pharmacy business eligibility from the Ministry of Health is now a prerequisite for any company desiring to conduct pharmaceutical operations in the country.
The new requirements greatly simplify the conditions for foreign trading companies that only want to import drugs and pharmacy products into Vietnam for resale, as currently they only need to obtain the Certificate from the Ministry.
Previously, such companies were required to jump through a complicated set of hoops in a long drawn out time consuming process to obtain a trading license. These latter requirements are now completely rescinded.
Import Rights for Foreigners
The requirements for issuance of the Certificate state the applicant must submit the required forms listing the store location, detail its storage area, equipment, means transportation, and quality control system in sufficient detail to allow the Ministry to evaluate the qualifications of the company.
Importers after obtaining the Certificate are strictly prohibited from engaging in any activity such as selling the drugs or related pharmacy products at the retail level and are restricted solely to activities that are and within the scope of those related to wholesale.
Export Requirements
Foreign companies, may export drugs and raw medicinal materials from Vietnam without the Certificate from the Ministry, for all products except for herbal items specifically detailed on a list of controlled rare or special herbs and certain drugs, medicinal ingredients that are psychotropic, narcotic ingredients, or precursors.
Import Permit License
Only products previously issued a license for import are immediately subject to the new rules.
The new law outlines out comprehensive procedures for obtaining a licence for importing first-time use products in Vietnam, and the steps required by companies holding a Certificate to apply to the Ministry to obtain the prerequisite authorization for them.
Control of Drug Price
Under the new law, the government still retains strict control of the prices that pharmacy business entities can sell drugs and these values must be published on the web portal of the Ministry of Health.
ROK Companies Likely to Benefit Most
Leading pharmaceutical companies from the ROK are pouring money into Vietnamese operations as they battle for increased market share in the fast-growing pharmaceutical segment, said the speakers at the conference.
The pharmaceutical market in Vietnam is forecast to increase from US$4.2 billion in 2015 to US$7.2 billion by 2020, according to a report by BMI Research, they noted.
Because of the domestic pharmaceutical segment still being very fragmented and the management standards typically quite poor, they suggested that the more professionally managed companies from the ROK are poised to benefit most from the new law.
The ROK companies, suggested the speakers, see the new law as a golden opportunity to gain market share in the rapidly growing segment of the Southeast Asian country’s market.
