Localization of Korean pharmaceuticals in Vietnam is pouring

JW pharmaceuticals, Korea United Pharm. Inc., Shin Poong Pharm. Co.,LTD. etc. inroad to Vietnam market

Pharmaceutical market worth ₩7 trillion, worth for export generics and health supplements

High barriers to bidding ... through agencies rather than direct distribution

Recently, listed pharmaceutical companies are stepping up their efforts to localize Vietnam, which has been spotlighted as a Pharmerging market.

 

Pharmaceutical companies investing in Vietnam include Chong Kun Dang (local branch), JW Pharmaceuticals(acquired Euvipharm), Korea United Pharm.

 

Inc.

 

(local plant), Ctcbio (joint plant),Shin Poong Pharm.

 

Co.,LTD.,(Shin Poong Daewoo Vietnam Pharma), Seoheung Capsules (plant / corporation).

 

The Vietnamese market is attracting attention because of: ▲ High growth potential due to population increase ▲ Generic consumption increase ▲ Specialty drug market expansion due to the aging / chronic diseases increase ▲ High investment refund due to continuous regulatory reform and FOL reduction Can be mentioned.

 

As of 2018, the Vietnamese pharmaceutical market is estimated at ₩7 trillion, of which imports amount to ₩3.30trillion.

 

Other than this, ₩3,6 trillion is the local production scale.

 

Pharmaceutical spending per person is ₩71,000 per year, and it is gradually increasing.

 

Exports are still weak at around ₩ 120billion.

 

By product, the ETC market is about three times larger than OTC and occupies about 75% of the total market.

 

The major importers of pharmaceuticals are European countries such as France (11.4%), Germany (11%), Switzerland (6.7%), Italy (6.7%), UK (4.8%) and Spain (2.8%).

 

India and Korea are representative among Asian countries In particular, Vietnam's pharmaceutical market has high growth potential, It should not be overlooked where the entry of foreign companies is very difficult.

 

The Vietnamese government considers the distribution of medicines to be directly related to national health and national security, and sets high barriers to entry into the Vietnamese pharmaceutical market for foreign companies.

 

In particular, foreigners are not allowed to distribute or sell medicines in Vietnam For foreign companies to distribute and sell medicines in Vietnam, it is possible only through local agents and distributors

Drug categorization of bidding for supply of drugs for public health facilities

The bidding policy for the supply of medicines for public medical facilities is also worth noting.

 

Vietnam bids on threeparts about generics, originals, and oriental pharmaceuticals in the public health sector.

 

In the case of fiercely competitive generic drugs, bidding companies are divided into 5 groups, and since 1st and 2nd groups have high standards, it is difficult for Vietnamese companies to participate, so foreign pharmaceutical companies belonging to 1st and 2nd groups are advantageous for bidding competition.

 

.Recently, Vietnamese pharmaceutical companies are increasing their investment in technology development to prepare for the increase in imported drugs

 

.The Vietnam market competition is expected to increase due to Vietnam's imports of medicines from the entry into force of the CPTPP and the EU-Vietnam FTA

 

.The removal of the foreign equity cap by local pharmaceutical companies valued a good thing

 

.Vietnam's largest pharmaceutical company DHG (DHG Pharmaceutical Company) officially announced on its website in July 2018 that it will eliminate the foreign ownership limit (FOL) and allow up to 100%

 

.Trapaco also said it plans to eliminate the foreign ownership limit, and Domesco (DMC), the third-largest pharmaceutical company, already owns more than 50% of Chile's Abbott (US Abbott subsidiary)

 

.One of the reasons why Vietnam's major pharmaceutical companies remove foreign ownership limit is to increase R & D investment through foreign investment and gain an edge in the fierce market competition

 

.Vietnam's No

 

.1 pharmaceutical market leader is DHG, with sales of ₩210 billion as of 2017

 

.The head office is located in Can Tho, South Vietnam

 

.Along with domestic sales, the company exports products to 13 countries including Ukraine, Romania, Myanmar, Russia, Mongolia, Cambodia, Laos and Singapore

 

.In addition to over-the-counter drugs, the company also produces health functional food and attracted ₩120 billion in investment from Taisho Group, Japan's top five pharmaceutical company, in April 2019

 

.It is also partnering with Vinamilk, Vietnam's largest dairy company, to expand health functional food

 

.Trapaco, the No

 

.2 company, has sales of ₩100 billion and is building a portfolio of all areas including professional, general and health functional food

 

.Another unique feature is having three production plants that meet GMP standards Daewoong Pharmaceuticals is participating in management through equity investment, and it is believed that it is cooperating in various fields, including local production, distribution, sales, business, and bidding

 

.Recently, Vietnam's major companies are actively investing in the retail pharmaceutical distribution market

 

.As a result, Vietnamese pharmacies are gradually transforming into modern distribution channels

 

.In April 2018, Vietnam's No.1 Vin Group announced its entry into the pharmaceutical industry, and in November of the same year, it launched the retail pharmacy brand 'VinFa' in Hanoi and established VinFa Drug Research and Production Center in Bac Ninh province in northern Vietnam

 

..

 

Vietnam's leading electronics retailers, Mobile World and FPT Retail, also entered the pharmaceutical market through a stake acquisition.

 

Mobile World acquired a 40% stake in Phuc An Khang, a local pharmacy chain, and FPT Retail also acquired Long Chau pharmacy chain and established FPT Long Chau Pharmaceutical JSC (FPT Pharma).

 

Pharmacity, one of Vietnam's leading drugstores, expands its distribution network to major Vietnamese cities such as Ho Chi Minh City, Binh Duong, Can Tho and Hanoi, increasing the number of stores to 196 in June 2019, making it one of the largest pharmacy chain stores in Vietnam.

 

Pharma City plans to increase the number of stores across Vietnam to over 1000 by 2021.

 

Meanwhile, the number of Vietnamese pharmacies is about 57,000, most of them in small families, and the proportion of modern retail channels is only 1.5% of the total.