Vietnam Generic Drugs Market, By Type (Small Molecule Generics, Biosimilars), By Mode of Drug Delivery (Oral, Parenteral, Topical, Others), By Form (Tablets, Capsules, Injections, Others), By Source (Contract Manufacturing Organizations, In-house), By Distribution Channel (Retail Pharmacies, Hospital Pharmacies, Online Pharmacies, Others), By Application (Neurology, Oncology, Cardiovascular Diseases, Diabetes, Anti-Inflammatory Diseases, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

Vietnam Generic Drugs Market was valued at USD 3.25 Billion in 2024 and is anticipated to project robust growth in the forecast period with a CAGR of 9.95% through 2030. The Vietnamese generic drugs market is undergoing strong growth, fueled by targeted government policies, a rapidly expanding healthcare infrastructure, and rising demand for cost-effective medications. Key opportunities lie in bolstering domestic manufacturing capabilities, particularly in the production of active pharmaceutical ingredients (APIs), which would reduce reliance on imports and enhance supply chain resilience.

A focus on research and development is essential to raise the standard of locally produced generics, ensuring they meet global quality benchmarks and remain competitive in international markets. The market is on track for substantial expansion, driven by government support, shifting demographics, and strategic investments to improve domestic production. By addressing critical challenges like import dependency and supply chain disruptions, the sector is positioned for long-term growth and sustainable development.

Key Market Drivers

Aging Population and the Rising Prevalence of Chronic Diseases

The aging population and the rising prevalence of chronic diseases are two critical factors that significantly drive the growth of the Vietnam Generic Drugs Market. These demographic and health trends directly influence the demand for affordable, effective healthcare solutions, creating a robust market environment for generic medications. Vietnam is experiencing a demographic shift with a steadily increasing proportion of elderly citizens. Vietnam is experiencing one of the fastest aging trends globally. In 2019, individuals aged 60 and above represented 11.9% of the total population, with projections indicating that this figure will exceed 25% by 2050. By 2036, the country is set to transition from an "aging" society to an "aged" society, marking a significant demographic shift with far-reaching implications for healthcare, labor markets, and social infrastructure. This shift presents a unique challenge for the healthcare system, as the elderly population tends to have higher healthcare needs due to age-related conditions. Older adults are more likely to suffer from chronic diseases such as hypertension, diabetes, arthritis, and cardiovascular diseases, which require ongoing, long-term treatment. As a result, the demand for medications to manage these conditions becomes continuous and significant. Generic drugs, being more affordable than branded alternatives, are increasingly being preferred by the aging population and healthcare providers as they provide a cost-effective solution to chronic disease management. The need for cost-efficient treatments becomes even more critical in the context of an aging population, where long-term healthcare costs can be a significant financial burden on both individuals and public healthcare systems.

A population-based study conducted in rural Vietnam revealed that 39% of individuals aged 25 to 74 reported having at least one chronic disease. Additionally, over 10% of participants reported suffering from two or more chronic conditions. The study also highlighted the widespread prevalence of risk factors associated with chronic diseases across the population. The rise in chronic diseases among the general population is another driving factor for the growth of the generic drugs market. Chronic diseases such as diabetes, hypertension, cardiovascular diseases, and respiratory conditions are becoming more prevalent due to factors like lifestyle changes, urbanization, unhealthy diets, and sedentary behavior. As of recent reports, chronic diseases account for a large proportion of the national disease burden, and their prevalence is increasing across various age groups, not just among the elderly. The treatment of chronic conditions often requires lifelong medication, which leads to sustained demand for affordable therapeutic options. Generic drugs, which can be produced at a lower cost compared to branded drugs, are essential in providing long-term treatments for chronic diseases. This trend is particularly beneficial for the Vietnamese market, where a significant portion of the population is not covered by comprehensive health insurance, making the affordability of generics a critical factor in healthcare accessibility.

Vietnam is expected to require additional time to achieve universal health coverage. With over 60% of the nation's total healthcare expenditure coming from out-of-pocket payments, the findings of this study highlight the significant financial burden experienced across all income groups. This underscores the challenges in ensuring equitable access to healthcare services for the population. The combination of an aging population and a rise in chronic diseases places considerable pressure on both individuals and the healthcare system. Managing healthcare costs has become a central concern for the Vietnamese government and healthcare providers, especially as the public health system faces budgetary constraints. The high cost of branded drugs, particularly for long-term treatments required by patients with chronic conditions, is unsustainable for many. Generic drugs provide a practical solution to this issue by offering equivalent therapeutic effects at a fraction of the price. For both patients and healthcare providers, generics represent a more viable financial option, ensuring that patients can continue their treatments without undue financial hardship. This economic advantage makes generic drugs a preferred choice, particularly in public healthcare settings and for low-income groups, thus driving the overall growth of the generic drugs market.

Growth of Healthcare Infrastructure

The growth of healthcare infrastructure is a key driver in the expansion of the Vietnam Generic Drugs Market. As the country continues to modernize and expand its healthcare system, it creates both direct and indirect opportunities for the generic drugs sector. This development enhances access to affordable healthcare, improves the distribution network, and encourages the adoption of cost-effective medications. Vietnam has experienced a remarkable 30% growth in private patient volume between 2019 and 2023, substantially outpacing growth rates in other Southeast Asian markets. The government's strategic goal is to increase the share of private hospital beds from 10% in 2025 to 25% by 2050 further bolsters this positive trend, signaling continued expansion in the private healthcare sector.

Vietnam is actively investing in expanding its healthcare infrastructure, with a particular focus on improving accessibility in both urban centers and underserved rural regions. As the number of healthcare facilities, such as hospitals, clinics, and pharmacies, continues to increase, the reach of generic medications also expands. Healthcare infrastructure expansion enables more people to access medical care and pharmaceutical products, including generic drugs, which are often more affordable than branded alternatives. In rural areas, where affordability and access to high-quality medication can be limited, the availability of generic drugs through local healthcare facilities helps bridge the gap, providing cost-effective treatment options to underserved populations. This increased accessibility drives greater demand for generics, as they offer an economically viable solution for long-term management of chronic conditions, which are prevalent in both rural and urban populations.

As Vietnam's healthcare infrastructure grows, so does its distribution network for pharmaceuticals. Enhanced logistics and supply chain systems ensure that medications, including generics, are more widely available across the country. This includes not only major cities but also remote regions, ensuring that generics are accessible to a larger portion of the population. With more efficient distribution networks, generic drug manufacturers can reach a broader market, increasing their sales volumes and expanding their market share. These developments also encourage competition among pharmaceutical companies, which can lead to reduced prices and better availability of medications in both public and private healthcare settings.

The Vietnamese government has prioritized healthcare infrastructure development through initiatives that involve both public and private sector investments. These investments include modernizing hospitals, upgrading medical technology, and expanding healthcare services across the country. As the government continues to prioritize the expansion of healthcare infrastructure, the demand for medications, including generics, rises in tandem. In particular, public hospitals and clinics, which cater to a large portion of the population, often prefer generic drugs to keep treatment costs low. As the healthcare system grows and more hospitals and clinics are built or upgraded, the market for affordable generic medications becomes more significant. This growth creates a favorable environment for generic drug manufacturers, who can leverage the expanding healthcare infrastructure to increase their market penetration.

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Key Market Challenges

Regulatory and Approval Challenges

One of the most significant barriers to the growth of the Vietnam Generic Drugs Market is the complex regulatory environment. The approval process for generic drugs, while streamlined in comparison to branded drugs, still involves significant delays and administrative burdens. Generic manufacturers must navigate a strict regulatory framework set by the Ministry of Health, which can result in prolonged approval timelines for new products. These delays hinder the market entry of generics, preventing them from reaching consumers promptly and thereby limiting market expansion.

Also, the regulatory system is often perceived as opaque, with inconsistent enforcement of rules across different regions. This inconsistency can cause confusion among manufacturers, leading to compliance challenges and higher operational costs. As Vietnam continues to align its regulations with international standards, the evolving legal landscape may also create uncertainty for domestic manufacturers who are attempting to meet these new compliance requirements. The regulatory hurdles not only slow down the production and distribution of generics but can also impact their affordability, as manufacturers may face additional costs in navigating the approval process.

Dependency on Imported Raw Materials (Active Pharmaceutical Ingredients - APIs)

Another major challenge for the Vietnam Generic Drugs Market is the country’s heavy reliance on imported raw materials, particularly Active Pharmaceutical Ingredients (APIs). Vietnam does not yet produce the majority of the APIs needed for generic drug manufacturing, which results in dependency on international suppliers. This reliance on imports exposes the market to supply chain vulnerabilities, price volatility, and global trade uncertainties.

The fluctuations in raw material costs directly impact the production cost of generics, making them less affordable and potentially reducing their competitiveness in the market. For instance, disruptions in the global supply chain, such as those caused by geopolitical tensions or natural disasters, can lead to shortages of essential APIs, delaying production timelines and reducing the availability of generic drugs in the local market. In the long term, the inability to establish a self-sufficient API manufacturing ecosystem could hinder the sustainability and growth of the Vietnamese generic drugs market, preventing the country from achieving its full potential in domestic production and export opportunities.

Key Market Trends

Expansion of Local Manufacturing Capabilities and Vertical Integration

A key trend that is shaping the future of the Vietnam Generic Drugs Market is the expansion of local manufacturing capabilities, particularly through vertical integration within the pharmaceutical supply chain. Historically, Vietnam’s generic drug industry has been heavily reliant on imported Active Pharmaceutical Ingredients (APIs). However, there is a strong push towards enhancing local production capacity for both APIs and finished formulations.

Vietnamese pharmaceutical companies are increasingly investing in advanced manufacturing facilities, upgrading technology, and adopting more efficient production processes to boost domestic production of generics. This trend is not only aimed at reducing dependency on imports but also at lowering costs, increasing production scalability, and improving overall supply chain resilience. Vertical integration, where companies control both the production of APIs and the manufacturing of generic medications, is becoming more prevalent. This integration enhances the quality control process, reduces production costs, and mitigates risks related to global supply chain disruptions.

As local manufacturing capabilities grow, Vietnam is positioning itself as a competitive player in both the domestic and regional markets. Increased local production will also support the country’s ability to meet growing domestic demand and enhance export opportunities for generics, positioning Vietnam as an attractive destination for pharmaceutical investments in Southeast Asia.

Technological Advancements in Drug Development and Manufacturing

Technological advancements are another critical trend influencing the growth of the Vietnam Generic Drugs Market. As the pharmaceutical industry continues to embrace digitalization, innovations in drug development and manufacturing are transforming how generics are produced and distributed. Automation, artificial intelligence (AI), and data analytics are being increasingly integrated into the drug development process, improving efficiency, reducing costs, and enhancing production timelines.

For example, AI and machine learning are being applied to the research and development of generic formulations, enabling faster identification of viable compounds and the optimization of production processes. This technology-driven approach allows generic drug manufacturers in Vietnam to bring products to market more swiftly and efficiently, increasing their competitiveness both domestically and internationally. Additionally, digitalization and the use of advanced manufacturing technologies, such as continuous manufacturing systems, are streamlining production workflows, enhancing scalability, and reducing the risk of human error, which in turn improves the overall quality of generics.

The integration of these technologies is enabling Vietnamese manufacturers to meet the growing demand for high-quality generics, while simultaneously reducing costs and ensuring consistency. As the market evolves, these technological advancements are likely to play a pivotal role in ensuring the future growth of the generic drugs sector.

Segmental Insights

Type Insights

Based on the category of Type, the Small Molecule Generics emerged as the fastest growing segment in the Vietnam Generic Drugs Market in 2024. the key factors contributing to the rapid growth of the Small Molecule Generics segment in Vietnam is the increasing prevalence of chronic diseases. Vietnam, like many countries in Southeast Asia, is seeing a surge in lifestyle-related diseases such as hypertension, diabetes, and cardiovascular conditions. These diseases often require long-term treatment with medications that can be costly over time. Small molecule generics, which offer a more affordable alternative to branded drugs, have become the go-to option for both healthcare providers and patients. Due to their lower cost structure, small molecule generics help address the financial burden of chronic disease management, making them increasingly popular among both public and private healthcare sectors. As the healthcare system in Vietnam strives to manage a growing number of chronic disease patients, small molecule generics are playing an essential role in ensuring that these conditions are treated effectively and affordably.

The affordability of small molecule generics is a critical driver of their growth in Vietnam’s market. These generics are often priced significantly lower than their branded counterparts, which makes them accessible to a broader segment of the population, including those in lower-income brackets and rural areas. The government’s focus on increasing healthcare accessibility and controlling rising healthcare costs aligns perfectly with the growing demand for affordable small molecule generics. This economic accessibility is particularly important in a market where a large portion of the population is still paying for healthcare services directly. Small molecule generics provide a solution that ensures patients can continue their treatment without facing prohibitive financial barriers. These factors are expected to drive the growth of this segment.

Application Insights

Based on the category of Application, the cardiovascular diseases segment dominates the Vietnam Generic Drugs Market in 2024. Cardiovascular diseases, including conditions like hypertension, coronary artery disease, and heart failure, have become a major public health issue in Vietnam. According to recent studies, the rate of CVD has been rising steadily, driven by factors such as urbanization, changing diets, sedentary lifestyles, and an aging population. Vietnam's healthcare system is increasingly focused on managing and treating these conditions, which require long-term medication and regular management. As the population ages and lifestyle diseases become more common, the number of people diagnosed with cardiovascular conditions is expected to continue increasing. This demographic shift is directly contributing to the growing demand for medications used to treat CVDs. Since cardiovascular diseases often require lifelong treatment with a combination of medications such as antihypertensives, statins, and blood thinners generic drugs are a critical component in addressing the rising healthcare burden associated with these conditions. In fact, cardiovascular disease is one of the leading causes of death in Vietnam, which underscores the substantial therapeutic need in the market for affordable, effective drug options

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Regional Insights

Southern Vietnam emerged as the largest market in the Vietnam Generic Drugs Market in 2024, holding the largest market share in terms of value. Southern Vietnam, particularly the Ho Chi Minh City metropolitan area, has experienced rapid economic growth and industrialization over the past few decades. The region accounts for a significant portion of Vietnam’s GDP, and its economy is among the most diversified in the country. This economic prosperity has fueled higher disposable incomes, greater purchasing power, and an expanding middle class, all of which drive demand for healthcare services and medications.

As the region's economy has grown, so has its healthcare spending, with both public and private healthcare sectors seeing substantial investments in infrastructure and services. The pharmaceutical sector, including generic drugs, has benefitted from the economic boom, as more individuals and families seek affordable medication options. Additionally, the burgeoning industrial sector has contributed to an increasing prevalence of lifestyle diseases, such as hypertension, diabetes, and cardiovascular conditions, all of which require long-term medication management. This has further increased the demand for generic drugs in the region, especially small molecule generics used to treat these chronic conditions.

Recent Developments

• In December 2024, Imexpharm Pharmaceutical JSC, a leader in Vietnam's pharmaceutical sector with nearly 50 years of development, is set to implement a proactive investment strategy to sustain its growth trajectory. The company plans to establish new facilities as part of its ongoing commitment to expanding production capabilities and maintaining its competitive edge in the market.
• In November 2024, Vietnam is focused on advancing the production of innovative medicines. The Ministry of Health has put forward a policy proposal designed to facilitate the transfer of new and innovative drugs into the market, with the goal of expanding treatment options for patients. This initiative aims to foster greater access to cutting-edge therapies, enhancing the overall healthcare landscape in the country.
• In January 2024- Vietnam's Ministry of Health (MOH) has introduced a draft amendment to the 2016 Pharmacy Law, aiming to enhance the rights and obligations of foreign-invested enterprises (FIEs) within the pharmaceutical sector while expanding policy incentives. The proposed changes are designed to address challenges identified during the law's implementation, which have resulted in operational hurdles for pharmaceutical production and business activities. The MOH’s focus is on creating a more conducive environment for both local and foreign companies, promoting greater efficiency and sustainability in the pharmaceutical industry.

Key Market Players

• DHG Pharmaceutical Joint Stock Company
• Traphaco Joint Stock Company
• Pymepharco Joint Stock Company
• Hatay Pharmaceutical Joint Stock Company
• Mekophar Chemical Pharmaceutical JSC
• Imexpharm Corporation
• OPC Pharmaceutical Joint Stock Company

Report Scope:

In this report, the Vietnam Generic Drugs Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Vietnam Generic Drugs Market, By Type:

o   Small Molecule Generics

o   Biosimilars

• Vietnam Generic Drugs Market, By Mode of Drug Delivery:

o   Oral

o   Parenteral

o   Topical

o   Others

• Vietnam Generic Drugs Market, By Form:

o   Tablets

o   Capsules

o   Injections

o   Others

• Vietnam Generic Drugs Market, By Source:

o   Contract Manufacturing Organizations

o   In-house

• Vietnam Generic Drugs Market, By Distribution Channel:

o   Retail Pharmacies

o   Hospital Pharmacies

o   Online Pharmacies

o   Others

• Vietnam Generic Drugs Market, By Application:

o   Neurology

o   Oncology

o   Cardiovascular Diseases

o   Diabetes

o   Anti-Inflammatory Diseases

o   Others

• Vietnam Generic Drugs Market, By Region:

o   Northern Vietnam

o   Central Vietnam

o   Southern Vietnam

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Vietnam Generic Drugs Market.

Available Customizations:

 Vietnam Generic Drugs market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).