With a population of over 100 million and a total drug expenditure of over 8 billion USD in 2023, the Vietnamese pharmaceutical market is quite attractive and has much room for production and business activities. The Ministry of Health said that 2024 is a key year for reviewing and amending important laws and regulations to shape the operations of the pharmaceutical industry in the next decade, contributing to the development of a sustainable healthcare system and creating a favorable ecosystem to promote innovation.
An important content being implemented by the Ministry of Health is to complete the draft Law amending and supplementing a number of articles of the 2016 Pharmacy Law to submit to the National Assembly for consideration and approval in the October session. The amendment of the Pharmacy Law is to create a legal corridor to resolve bottlenecks in the past, avoiding shortages of drugs for disease prevention and treatment. Five new points have been put forward: Institutionalizing all special and specific policy mechanisms related to the pharmaceutical sector during the Covid-19 pandemic; promoting the development of the pharmaceutical industry; diversifying the system and methods of trading and distributing drugs and pharmaceutical ingredients; simplifying administrative procedures on the order and procedures for granting drug circulation registration certificates; adding solutions to strictly manage drug prices.
One of the new points of the draft law is the change in the “strategy” for the pharmaceutical industry. Accordingly, it will shift from producing generic drugs to developing technology research and development activities, manufacturing or transferring technology to produce pharmaceutical substances, new drugs, original branded drugs, rare drugs, high-tech drugs, vaccines and biological products... to serve the domestic market and export to advanced markets.
Together with the Program for developing the pharmaceutical industry, domestically produced medicinal materials to 2030, with a vision to 2045 and the National Strategy for developing the Vietnamese pharmaceutical industry to 2030 with a vision to 2045 issued by the Prime Minister, it will create a big push for the Vietnamese pharmaceutical industry to achieve its set goal, which is to become a center for producing high-value pharmaceuticals in the region...
The important solution to realize the goal is to promote foreign direct investment (FDI) in the pharmaceutical industry. Currently, Vietnam has only 159 foreign companies investing in the pharmaceutical industry with a total investment capital of about 1.8 billion USD, a rather modest number or in other words, very small compared to the figure of about 500 billion USD of registered capital after 35 years of attracting foreign investment in Vietnam. With the FDI projects that have been implemented, there is also a lack of leading enterprises leading the development of the world's pharmaceutical industry.
More than ever, ministries and sectors need to take measures to remove obstacles and reform the law to create a more attractive foreign investment environment for the pharmaceutical industry.
Therefore, more than ever, ministries and sectors need to take measures to remove obstacles and reform the law to create a more attractive foreign investment environment for the pharmaceutical industry. Vietnam can continue to attract investment by providing preferential tax policies and simplifying the licensing process for technology transfer drugs. In addition, cutting administrative procedures can attract more specialized investment from multinational companies and in the long term will promote the strong development of the domestic pharmaceutical manufacturing industry in parallel with maintaining the global supply chain.
Representatives of foreign pharmaceutical companies said that the new Pharmacy Law needs to be passed to resolve the bottlenecks in drug registration renewals over the past years. At the same time, sub-law documents (decrees and circulars) should be issued immediately to avoid legal gaps during implementation. In the context of increasing competition from countries in the region, Vietnam needs to quickly increase its efforts in attracting FDI and innovation.
There are three important factors that Vietnam needs to focus on: creating a more favorable environment for businesses to operate and invest through clear, predictable, and sustainable policies to motivate companies to prioritize bringing the most advanced therapies to Vietnam sooner and be ready to invest long-term here; introducing preferential policies to prioritize innovation and invention such as establishing research and development centers, encouraging investment in early stages of the research and product development process such as clinical research and improving production capacity. And finally, having specific solutions to effectively implement the National Strategy for Pharmaceutical Development.
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