Pharmaceutical giants jockey for market dominance

Created 12 June 2017
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The total spending on medicine in 2017-2021 will grow by 15-17 percent thanks to the population increase and improved income per capita. 

Vietnam is entering the aging period of the population this year. The average spending on medicine per capita is now at $33 per annum. The figure is expected to increase to $55 by 2021, much lower than the average spending level of $117 of 22 new emerging markets.

Meanwhile, the EPI Index from Yale University showed that Vietnam ranked 131st among 180 surveyed countries in 2016. The index shows air quality, water sources and environmental sanitation. 

Witnessing the moves by pharmaceutical firms in the market recently, Le Van Truyen, former Deputy Minister of Health, said the pharmacy industry will continue its strong development, while competition among firms will be even greater in the next five years.

Pharmacy firms are making good profits, with the market expecting a stable growth rate of 10-15 percent.

Domestic pharmacy firms have been spending big money in the last two years to expand production and change corporate governance to adapt to the new circumstances.

Traphaco has vowed to become the Number 1 enterprise in the Vietnamese market in growth rate, profit and market capitalization value. It strives to obtain turnover of VND4 trillion and profit of VND500 billion by 2020. 

As for 2017, the company plans to launch eight new products into the market and targets VND2 trillion in turnover and VND242 billion in profit, which many analysts say are ‘very ambitious’.

However, analysts said the ambitious goals are attainable if Traphaco can maintain current growth. In 2011-2016, Traphaco gained the highest growth rate in the industry, 16 percent per annum. 

Meanwhile, Hau Giang Pharmacy will cement its position as the biggest generics manufacturer in Vietnam in terms of turnover. 

The company is now trying to develop a modern distribution channel, including drug store chains, supermarkets and convenience stores in five largest cities. 

The solutions are believed to help it obtain a growth rate of 15 percent and net turnover of VND6.750 trillion by 2020.

Taking full advantage of M&A to improve competitiveness is being pursued by Domesco, another big company in the industry. 

Abbott, the biggest shareholder of Domesco, plans to transfer commercial rights for 28 products to Domesco.

A report shows that about 30 pharmacy firms had listed their shares on the Hanoi and HCMC bourses and on UpCom by April 2016 with total capitalization value of VND14.8 trillion.

 

Source: VietNamNet

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