Vietnam land of opportunity for drug firms, says Fitch group firm

By Viet Phong   July 19, 2018 | 10:16 pm PT
Vietnam land of opportunity for drug firms, says Fitch group firm
Intellectual property protection remains to be investor concerns
Vietnam will provide lucrative long-term opportunities to pharmaceutical and healthcare firms, BMI Research, a Fitch Group company, has said in a report released yesterday.

The country’s expansion of universal health coverage and economic growth would continue to stimulate the development of the medical and healthcare markets, it said.

But issues such as poor and inequitable access to healthcare services and low levels of intellectual property protection would remain a drag on investment for innovative firms, as reflected in the country’s score of 56.5 out of 100 in BMI’s innovative pharmaceuticals risk/reward index (RRI).

The country’s expenditure was high compared to regional peers, and thus offered long-term benefits to innovative drug companies.

Moreover, the growing demand for medicines and medical treatment would be supported by the expansion of Social Health Insurance, rapid income growth and improvements in healthcare delivery.

However, urbanisation was minimal, with the vast majority of the population living in rural areas characterized by a lack of healthcare infrastructure, restricting people’s access to healthcare services.

According to BMI Research, patented medicine sales would continue to face a challenging business environment in the country as concerns over counterfeit drugs, intellectual property protection and pricing pressures remained unaddressed.

In addition to the challenges posed by the challenging regulatory environment, the focus on increased cost efficiency would further reduce the appetite for high-value medicines.  

The robust economic growth momentum would continue to be underpinned by the government’s efforts to liberalise trade and investment and boost the private sector’s foot print.

But there were serious risks.

Vietnam’s export-led growth model and reliance on foreign direct investment put its economy at risk from the spillover effects of the rising US trade tensions with China and the eurozone at a time when global monetary conditions were tightening, added the BMI report.

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