Showing up on pharma radar
Betting on Vietnam’s growth potential for high-quality and accessible healthcare services, a number of American pharmaceutical corporations are making plans to venture into the local market.
Just a few days ago, the United States-based Abbott Laboratories introduced Similac Total Comfort, a formula for small children with digestive disorders. The product marked the next step of the pharma group in the lucrative Vietnamese market, following the successful launch of Similac HMO in 2018. Next to the formula, Abbott is also said to be planning to introduce their new PediaSure BA product in Vietnam. These moves show Abbott’s plan to boost its footprint in the local market where the import value of milk and milk-based products has been growing every day, with the figure reaching $90 million in February, up 64.8 per cent on-year, according to the Ministry of Industry and Trade.
Abbott has made strong investments in other business lines in Vietnam over the past 20 years. The group recently increased its stake in Vietnam’s third-largest domestic drugmaker Domesco (DMC) to 51.7 per cent, and earlier acquired Glomed Pharmaceutical Co., Inc.
Currently, the firm is working with DMC on franchising some of its products to the latter. As outlined by DMC, franchised products will contribute to the company’s revenue from 2020.
Meanwhile, US-backed Pfizer Inc., one of the world’s largest research-based pharmaceutical companies, is stepping up business in Vietnam.
With a leading portfolio of products and medicines that support wellness and prevention, as well as treatment and cures for diseases across a broad range of therapeutic areas, Pfizer is seeking to join more health programmes across the nation.
Bradley Silcox, chief representative of Pfizer Thailand Ltd., told VIR, “For Pfizer, Vietnam is not only an important country with which to do business, we also see it as a potential location to manufacture our products and play a role in developing an innovative hub in the coming years. We are also committed to manufacturing high-quality products in Vietnam.”
“Vietnam is attracting more clinical research investment, but this could be accelerated,” Silcox continued. “The number of global clinical trials conducted in the country has grown by 20 per cent in the last two years. However, this is only one-fifth of the number conducted in Thailand. The policy environment matters a great deal for biopharmaceutical investment decisions, commercial activities such as public-private partnerships, clinical research, and manufacturing.”
Other top US names in the local pharmaceutical industry today include 3M Vietnam, Bayer, Merck, Johnson and Johnson, and Mylan N.V., all of which have produced great success in Vietnam and continue to expand in the country. In particular, 3M Vietnam has been focusing on research and development (R&D) activities to introduce new products to the market as part of its long-term Vietnamese investment.
Economically, the US is a key trading partner and investor for Vietnam, with the two countries working closely in many areas including education, global health, food and energy security, disaster response, and much more.
Industry insiders forecast that the pharmaceutical market will stay appealing to overseas investors, including those from the US, given the growing demand for high-quality and accessible healthcare. The market will continue to see double-digit growth in the next five years, according to London-based market research firm Business Monitor International.
Evidently, Abbott, Pfizer, and 3M can see this growth potential in Vietnam, where domestically-manufactured medicines only account for 48 per cent of the total market amid the growing demand.
Moreover, domestic manufacturing companies are still struggling to produce most of the high-quality and newly-developed drugs due to the lack of technology and finance, and instead manufacture generic or herbal medicines. R&D activity has also been limited. With the correct strategies, these groups can see benefits in the future, as Vietnam focuses foreign investment attraction strategy on hi-tech and advanced manufacturing, including healthcare.