Vietnam's pharmaceutical industry grew by just 2.8 per cent last year, much lower than its average 11.8 per cent growth in the last five years.
It is expected to recover and grow by 15 per cent this year, mainly due to a rapidly ageing population and increasing incomes, analysts at SSI Securities Corp said.
According to a report by the company, social distancing and strict control at hospitals last year meant people with minor ailments did not go for treatment due, resulting in lower sales of both prescription and non-prescription drugs.
The incidence of health checks was 10-15 per cent down until the fourth quarter.
Then, in the final quarter, after the pandemic was controlled, people again began going to hospitals that the number visiting hospitals went up by five per cent year-on-year.
Last year there was a short supply of active pharmaceutical ingredients (API) from China and India due to social distancing and lockdowns and higher demand for them globally, causing drug prices to rise.
India and China account for 55 per cent of the global API supply and nearly 70 per cent of Vietnam’s requirements.
The prices of most APIs increased by five-to-eight per cent and pharmaceutical companies’ gross profit margin decreased by one-to-three percentage points last year since they could not increase prices to compensate for this.
Construction of new pharmaceutical plants fell behind schedule.
According to the Ministry of Health, domestic drug production grew at 13.8 per cent per year in 2015-2019 backed by government policies and construction of new plants.
SSI Research said however the industry was recovering.
Last year was notable for mergers and acquisitions (M&A) in the industry. According to SSI Research, the total value of M&A deals was 1.68 trillion dong ($73 million) and they involved a number of foreign investors.
German generic drugmaker Stada paid 400 billion dong to increase its stake in Pymepharco JSC from 70 per cent to 76 per cent.
Japan’s Aska Pharmaceutical paid 350 billion dong to acquire a 25 per cent stake in Ha Tay Pharmaceutical JSC.
VIET NAM NEWS/ASIA NEWS NETWORK