Drug market forecast to grow by 15 percent

Workers at DHG Pharmaceutical Company. The pharmaceutical industry is expected to recover and grow by 15 percent this year (Photo: taichingplus.vn)

HCM City (VNS/VNA) - The pharmaceutical industry grew by just 2.8 percentlast year, much lower than its average 11.8 percent growth in the last fiveyears.

It is expected to recover and grow by 15 percent this year, mainly due to arapidly ageing population and increasing incomes, analysts at SSI SecuritiesCorporation said.

According to a report by the company, social distancing and strict control athospitals last year meant people with minor ailments did not go for treatmentdue, resulting in lower sales of both prescription and non-prescription drugs.

The incidence of health checks was 10-15 percent down until the fourth quarter.

Then, in the final quarter, after the pandemic was controlled, people againbegan going to hospitals that the number visiting hospitals went up by 5 percentyear-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 demandfor them globally, causing drug prices to rise.

India and China account for 55 percent of the global API supply and nearly 70 percentof Vietnam’s requirements.

The prices of most APIs increased by 5-8 percent and pharmaceutical companies’gross profit margin decreased by 1-3 percentage points in 2020 since they couldnot 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 percentper year in 2015 - 19 backed by Government policies and construction of newplants.

SSI Research said however the industry was recovering.

M&A

Last year was notable for mergers and acquisitions in the industry. Accordingto SSI Research, the total value of M&A deals was 1.68 trillion VND (73million USD) and they involved a number of foreign investors.

German generic drugmaker Stada paid 400 billion VND to increase its stake inPymepharco JSC from 70 percent to 76 percent.

Japan’s Aska Pharmaceutical paid 350 billion VND to acquire a 25 percent stakein Ha Tay Pharmaceutical JS Company./.

VNA