Vietnam pharma firms optimistic about 2025 prospects despite lingering challenges

A majority of Vietnamese pharmaceutical firms are optimistic about 2025 market prospects despite challenges facing the healthcare and medicine sectors, according to a survey conducted by Vietnam Report JSC.

The survey found that 66.6% of pharma companies were confident about next year, while 20% expected stable conditions. Only 13.4% foresaw a more challenging market.

This optimism persists even though 37.5% of respondents reported profit declines in the first 10 months of this year, up from 21.1% last year.

The profit decline has been attributed to fluctuations in input material costs, weak consumer purchasing power due to tightened spending, slow turnover of certain anti-epidemic products and intense competition.

In spite of these hurdles, businesses see an improved outlook for the rest of the year as a recovering local economy creates a solid foundation to support growth within the sector, the report says.

Industry executives have pointed that the fourth quarter is usually the busiest period, particularly in the healthcare sector. Demand tends to increase during this time based on weather changes and the seasonal rise of illnesses like dengue fever, viral infections and influenza.

In the long term, Vietnam’s pharmaceutical, medical equipment and healthcare sectors are assessed to have substantial growth potential and numerous development opportunities thanks to the government’s support policies and increasing healthcare demand.

According to Fitch Solutions, per capita spending on pharmaceuticals is projected to rise from VND1.46 million ($57.4) in 2021 to VND2.12 million ($83.4) in 2026, with a compound annual growth rate (CAGR) of 7.8%.

Vietnam is one of the world’s fastest-growing pharmaceutical markets, with a CAGR estimated at 6-8% in 2023-2028, according to research firm IQVIA.

Statista has predicted that revenue in Vietnam’s medical equipment market will maintain steady growth, increasing from $922 million in 2016 to $1.6 billion by 2024, with further gains expected in the coming years.

Significant challenges

Despite the advantages and bright prospects, challenges facing Vietnam’s pharmaceutical, medical equipment and healthcare industries remain significant.

Infrastructure, technical and technological capabilities remain limited. There are no industrial parks specifically designated for pharmaceuticals and biotechnology development.

Most domestic pharmaceutical companies are small-scale, with modest revenue and limited investment capital. There are no major national corporations in the sector.

Digital transformation has been sluggish, which increases the need for coordinated policy solutions and stronger commitment from businesses, the report says.