Singapore, January 25 (ANI): Vietnam's domestic pharmaceutical industry is currently able to meet just 53 per cent of the country's demand, representing significant opportunities for Indian investors as India is among the leading global producers of generic medicines, according to Fitch Solutions.
It said the enormous volatility in global trade environment has pushed businesses into diversifying their supply chains away from China, which has increased the importance of India-Vietnam trade route for international business.
"There is an enormous potential for Vietnam to purchase generic medicines from India, but the former is actively trying to get Indian pharmaceutical companies to manufacture in Vietnam instead of importing," said Fitch.
India is Vietnam's third largest supplier of pharmaceutical products with export turnover of USD198 million in the first nine months of 2020.
In addition to finished products, India also provides raw pharmaceutical materials and generic medicine materials for the Vietnamese market. The medicines and raw materials imported from India are reasonably priced and meet the diverse needs of Vietnamese, especially those living in remote areas.
Vietnamese pharmaceutical firms want to cooperate and call for investment from foreign companies, including those from India to attract capital, technology and high-quality human resources.
"Therefore, there is room for cooperation between Vietnamese and Indian businesses in the field. In the pharmaceutical and medical equipment sector, India regards Vietnam as an important and promising market," said Fitch in a research paper.
Vietnam's generic drug market will post robust growth rates over the coming years, driven by the government's encouragement of the predominant generic-based local industry as well as expansion of healthcare services.
Domestic medicine production will remain firmly within the generic drug sector given the lack of scientific expertise for innovative drug development, but primarily due to the significantly higher demand for generic drugs in the country as a whole.
In addition, while the development of healthcare services in Vietnam will increase the ability for patients to access higher quality medicines, affordability levels remain low and as such opportunities for patented drugmakers will remain severely restricted.
Increased awareness and domestic demand of generic medicines are also the major contributors in this sector. Generic drugs have also begun to receive attention in competitive tendering for drug procurement. Generic drugs will continue to account for the majority of prescription drug sales with a value estimated at USD 2.9 billion in 2020.
"We expect this to grow to 6.7 billion dollars by 2030. This is a 10-year compound annual growth rate of 10 per cent in local currency terms and 9 per cent in US dollar terms," said Fitch. (ANI)