Vietnamese Market "Growing 23.9%/Year"

Vietnam's human-use drugs market has grown 27.3% a year over the pastfive years to reach $280 million (ex-manufacturer) in 1996, and this rate will rise to 23.9% a year, the highest growth in Southeast Asia, to a value of $800 million by 2001, says a new study from IMS Pharma Strategy Group.

However, per capita drug spending is low compared with other countries in the region, and Vietnam remains a high risk for business. IMS says the initial optimism and inflow of investment which followed the lifting of the US embargo in 1994 has been tempered by overly bureaucratic approval procedures, a lack of legal or business framework, infrastructure problems and a highly fragmented distribution organization. As a result, out of 18 joint or wholly foreign-funded drug ventures in the mid-1997, only five were reportedly in operation.

Foreign companies are able to exercise very little control over consumer prices, which are in any case not stable. Imports represent around 75% of sales (with illegal trade accounting for up to 20% of the market) and their share is expected to grow, due to the local industry's problems and the fact that consumers see even imported generics as being of higher quality than locally-made branded drugs.