Vietnam pharmaceuticals healthcare report q3 2013

Q3 2013 www.businessmonitor.com VIETNAM PHARMACEUTICALS & HEALTHCARE REPORT INCLUDES 5-YEAR FORECASTS TO 2017 ISSN 1748-2305 Published by:Business Monitor International Vietnam Pharmaceuticals & Healthcare Report Q3 2013 INCLUDES 5-YEAR FORECASTS TO 2017 Part of BMI’s Industry Report & Forecasts Series Published by: Business Monitor International Copy deadline: July 2013 Business Monitor International Senator House 85 Queen Victoria Street London EC4V 4AB United Kingdom Tel: +44 (0) 20 7248 0468 Fax: +44 (0) 20 7248 0467 Email: subs@businessmonitor.com Web: http://www.businessmonitor.com © 2013 Business Monitor International All rights reserved. All information contained in this publication is copyrighted in the name of Business Monitor International, and as such no part of this publication may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher. DISCLAIMER All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and Business Monitor International makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained. Vietnam Pharmaceuticals & Healthcare Report Q3 2013 CONTENTS BMI Industry View . SWOT Political . 11 Economic . 12 Business Environment 13 Industry Forecast 14 Pharmaceutical Market Forecast 14 Table: Pharmaceutical Sales Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Healthcare Market Forecast 16 Table: Healthcare Expenditure Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Table: Healthcare Governmental Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Table: Healthcare Private Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Prescription Drug Market Forecast 20 Table: Prescription Drug Sales Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Patented Drug Market Forecast . 23 Table: Patented Drug Market Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Generic Drug Market Forecast 25 Table: Generic Drug Sales Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 OTC Medicine Market Forecast . 27 Table: OTC Medicine Sales Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Pharmaceutical Trade Forecast . 30 Table: Exports And Imports Indicators, 2009-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Other Healthcare Data . 32 Key Risks To BMI's Forecast Scenario . 33 Macroeconomic Forecasts . 35 Economic Outlook . 35 Table: Vietnam - Economic Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Industry Risk Reward Ratings 39 Asia Pacific Risk/Reward Ratings . 39 Vietnam Risk/Reward Ratings 44 Rewards 44 Risks 45 Market Overview . 46 Industry Trends And Developments 48 Epidemiology . 48 Healthcare Financing 52 © Business Monitor International Page Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Hospital Sector Private Healthcare Sector Healthcare Insurance Healthcare And Pharmaceutical Reform . Research And Development Biotechnology Sector . Private Healthcare Sector Healthcare Insurance 53 54 55 58 60 60 64 66 Healthcare And Pharmaceutical Reform . Research And Development Biotechnology Sector . Clinical Trials 68 70 71 74 Regulatory Development 76 Regulatory Regime Pharmaceutical Advertising Intellectual Property Environment . Corruption Pricing Regime Reimbursement Regime 76 78 79 82 82 86 Competitive Landscape 90 Pharmaceutical Sector . 90 Domestic Industry . 91 Foreign Industry 93 Recent Pharmaceutical Industry News 95 Traditional Medicines . 95 Pharmaceutical Distribution . 97 Pharmaceutical Retail Sector 97 Foreign Industry 99 Recent Pharmaceutical Industry News 100 Traditional Medicines . 100 Pharmaceutical Distribution . 102 Pharmaceutical Retail Sector 102 Foreign Industry 105 Recent Pharmaceutical Industry News 106 Traditional Medicines . 106 Pharmaceutical Distribution . 108 Pharmaceutical Retail Sector 108 Table: Key Aspects Of Good Pharmacy Practice In Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Company Profile 111 DHG Pharmaceutical . 111 Traphaco Pharmaceutical . 113 © Business Monitor International Page Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Vietnam Pharmaceutical Corporation (Vinapharm) . Vietnam OPV Pharmaceutical Co . Vietnam Pharmaceutical Joint Stock Company (Ampharco) . Vidipha Central Pharmaceutical Joint Stock Company . Pfizer Sanofi Novartis . Merck & Co 115 118 120 123 125 127 130 132 GSK 134 Demographic Forecast . 136 Table: Vietnam's Population By Age Group, 1990-2020 ('000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 Table: Vietnam's Population By Age Group, 1990-2020 (% of total) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Table: Vietnam's Key Population Ratios, 1990-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Table: Vietnam's Rural And Urban Population, 1990-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Glossary . 140 Methodology 142 Pharmaceutical Expenditure Forecast Model 142 Healthcare Expenditure Forecast Model . 142 Notes On Methodology 143 © Business Monitor International Page Vietnam Pharmaceuticals & Healthcare Report Q3 2013 BMI Industry View BMI View: Vietnam's pharmaceutical and healthcare sectors are set to see strong growth, albeit from a low base, given our bullish outlook on the economy and expectations for the population's affluence to rise. In addition, the government is committed to implementing universal healthcare coverage. The plan, while ambitious, will provide growth opportunities for pharmaceutical firms. As the scheme is implemented, patients will have increased access to medical services. Nevertheless, we highlight that a key downside risk to our view is the existence of rampant corruption. Headline Expenditure Projections ■ ■ Pharmaceuticals: VND59,214bn (US$2.84bn) in 2012 to VND69,151bn (US$3.31bn) in 2013; +16.8% in local currency terms and +16.6% in US dollar terms. Forecast broadly in line with Q213. Healthcare: VND199,197bn (US$9.55bn) in 2012 to VND227,558bn (US$10.89bn) in 2013; +14.2% in local currency terms and +14.0% in US dollar terms. Forecast upgraded due to receipt of new data from the World Health Organization. Risk/Reward Rating: Vietnam's Pharmaceutical Risk/Reward Rating (RRR) score for Q313 is 50 out of the maximum 100 in our newly improved RRR system. The country scored above average for some indicators and sub-indicators, including overall market expenditure and sector value growth, pensionable population. Consequently, with this moderate score Vietnam is ranked 12th behind Thailand but in front of Indonesia out of the 18 key markets in Asia Pacific. Key Trends And Developments ■ In June 2013, Daiichi Sankyo's subsidiary, Kitasato Daiichi Sankyo Vaccine, and the Japan International Cooperation Agency (JICA) began technical co-operations to produce the first measlesrubella combined vaccine in Vietnam. ■ In April 2013, the Vietnamese health ministry issued Circular No10/2013/TT-BYT, modifying and supplementing several articles of Circular No. 02/2007/TT-BYT on conditions for the drug business. The amendment circular is intended to bring about various new regulations on conditions for the drug industry under Decree No. 89/2012/ND-CP, executing the Law on Pharmacy 2005. Under the amendment circular, the Provincial Department of Health shall be authorised by the health ministry to provide certificates, such as a good practice certificate, if foreign-owned enterprises' businesses are in drugs production, drugs maintenance, drug testing or import of drugs. The amendment circular was implemented from May 14 2013. ■ The Drug Administration of Vietnam (DAV) has banned the advertisement of nutritional supplements from April 26 2013, due to the chaotic state of the advertising system. In an interview with local © Business Monitor International Page Vietnam Pharmaceuticals & Healthcare Report Q3 2013 media Hai Quan in October 2012, Nguyen Thanh Phong, deputy director of DAV, stated that while the agency reviews such advertisements, preventing violations is difficult, as some advertising agencies are not registered with the authorities. BMI Economic View: Vietnam's real GDP growth came in relatively weak at 4.9% year-on-year (y-o-y) in Q113, missing Bloomberg consensus of 5.2% by a significant margin. The latest GDP print has fuelled concerns that the economic recovery could be losing momentum as the government races to restructure the banking sector and reassure investors that a banking crisis can be avoided. Although we acknowledge that uncertainties over the build-up of bad debt in the banking sector could continue to weigh on investor sentiment and undermine efforts by the government to reignite growth, this is typically the final saga of a credit cycle. Furthermore, we have witnessed encouraging evidence that an economic recovery in the coming quarters remains on track. BMI Political View: The Communist Part of Vietnam (CPV) is set to face increasing pressure for political change over the coming decade. We view political reforms for a more balanced and democratic political system as a crucial element in driving the country's economic growth over the long run, and we expect the CPV to allow limited reforms to be introduced gradually in the coming years. © Business Monitor International Page Vietnam Pharmaceuticals & Healthcare Report Q3 2013 SWOT SWOT Analysis Strengths ■ Significant growth potential, given a large and growing population. ■ The government's commitment to developing the health sector. ■ Sizeable local generic drugs sector, which is being encouraged by the government. ■ Strong traditional medicines segment with potential to improve the non-prescription drugs market in the longer term, as long as sufficient investment in extraction technologies can be found. Weaknesses ■ One of the least developed pharmaceutical markets in Asia, with low per capita spending on drugs. ■ Counterfeit drugs account for a significant amount of market consumption. ■ No bioequivalence requirement in place for locally made generic medicines. ■ Little distinction made between prescription and over-the-counter drugs, with most medicines available without a prescription. ■ Complex drug pricing policy biased towards local drug producers. ■ Import-reliant market, especially in terms of high-tech products and active pharmaceutical ingredients, which makes it vulnerable to currency movements. ■ Underdeveloped primary care services and a shortage of trained pharmacists are continuing to hamper access to medicines and product market penetration. ■ Population concentrated in rural, rather than urban, areas, preventing access to modern drugs and encouraging dependence upon traditional medicines. ■ Opportunities ■ The Association of South East Asian Nations (ASEAN) harmonisation initiative, including the adoption of Western regulatory standards such as International Conference on Harmonisation and World Health Organization guidelines. © Business Monitor International Page Vietnam Pharmaceuticals & Healthcare Report Q3 2013 SWOT Analysis - Continued ■ Introduction of five-year exclusivity for clinical dossier data encouraging researchbased multinationals. ■ If investment can be found for technological improvements, then there is great potential in the traditional Chinese medicine market, in addition to fledging biotechnology. ■ Full WTO membership improving the trading climate and potentially, in the longer term, redressing pharmaceutical trade issues. ■ Requirement for domestic companies to comply with international good manufacturing practices should boost exports. ■ Threats ■ Government resistance to aligning patent law fully with international standards deterring multinational sector expansion. ■ Need to resolve infrastructural and power supply issues, as well as higher education provision, before higher levels of foreign direct investment can be expected. ■ The government is increasingly interfering in the industry, protecting indigenous firms through the use of legal trade barriers, which will affect competitiveness. ■ Pharmaceutical price inflation threatens to put medicines out of reach of poor and therefore limit market volume growth. ■ Legalisation of parallel imports negatively impacting performance of patented drugs. ■ New health insurance legislation decreasing patients' access to medicines. © Business Monitor International Page 10 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Novartis SWOT Analysis Strengths ■ Well-established presence through its subsidiary Novartis Vietnam, which directly manufactures in the country. ■ Benefits from the advantages given to locally produced drugs. ■ Diverse manufacturing presence, including antibiotics, vitamins and OTC pharmaceuticals, consumer, generic and healthcare products, as well as vaccines. Weaknesses ■ Government drug-pricing policy is biased towards local products, which disadvantages Novartis' patented drugs offering. Opportunities ■ Low purchasing power of the majority of the population. ■ Widespread counterfeiting. ■ Underdeveloped healthcare infrastructure. ■ Demand for branded products to rise with sector modernisation and regional harmonisation. ■ Positive economic performance - with an increase in spending power - to underpin the development of pharmaceutical demand. ■ Developing the potential of the generic sector to open up commercial opportunities for Novartis. ■ Plans for a major overhaul of the domestic pharmaceutical regulatory environment, with a focus on increasing the level of foreign investment. Threats ■ Country remains heavily reliant on imported drugs. ■ Government resistance to aligning patent law fully with international standards. ■ As a part of its plan to overhaul the pharmaceutical sector, the government is planning to increase intervention and protect local companies through legal trade barriers, potentially affecting margins. © Business Monitor International Page 130 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 SWOT Analysis - Continued ■ Vietnam's susceptibility to economic fluctuations, with currency depreciation recently forcing price rises. ■ Legalisation of parallel imports negatively affecting performance of patented drugs. Company Overview Novartis Vietnam (representative office) was established following the merger of Sandoz and Ciba-Geigy in 1997. The company is active in the manufacture and distribution of speciality pharmaceuticals, consumer healthcare and generic medicines, as well as eye care products (through Alcon). Strategy Novartis' portfolio includes medicines in transplantation and immunology, cardiovascular diseases, diseases of the central nervous system, Parkinson's disease, skin allergies, OTC and ophthalmic medications. The following Novartis products maintain a leadership position in their respective segments: Lamisil (terbinafine), Clozaril (clozapine), Diovan (valsartan), Lescol (fluvastatin), Aredia (pamidronate), Navoban (tropisetron), Sandostatin (octreotide), Neoral (cyclosporine), Simulect (basiliximab), Femara (letrozole), Sandoglobulin (immune globulin), Miacalcic (calcitonin) and Lentaron (formestane). The company will strive to continue their promotion to private sector in particular, which will be encouraged by economic development. Company Details ■ ■ Novartis Pharma Services AG Unit 1001A, Centec Tower 72-74 Nguyen Thi Minh Khai Street Ward 6, District Ho Chi Minh City Vietnam ■ Tel: +84 3823 9090 © Business Monitor International Page 131 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Merck & Co SWOT Analysis Strengths Weaknesses Opportunities Threats ■ One of the leading global producers of medicines. ■ Considerable product portfolio, including consumer medicines. ■ Merger with Schering-Plough further strengthening MSD's presence in Vietnam. ■ Difficult IP environment, including counterfeit drug trade and lax patent protection. ■ No direct manufacturing or R&D presence in the country. ■ Underdeveloped healthcare infrastructure. ■ Rising demand for branded products following healthcare sector modernisation. ■ Pending overhaul of the regulatory climate, aiming to boost foreign investment. ■ Pending creation of a local affiliate. ■ Legal trade barriers protecting local players and disadvantaging multinationals. ■ Currency depreciation forcing price adjustments. ■ Legalisation of parallel imports negatively impacting performance of branded drugs. Company Overview The US drug major Merck & Co operates in Vietnam through its regional division, Merck, Sharp & Dohme (MSD) Asia Pacific, which was established in Vietnam in 1994. The company employs around 100 staff, who are mostly engaged in sales and marketing activities. Merck does not operate any manufacturing or R&D activities in Vietnam. Strategy The company is affected by regulations in Vietnam that require all state companies wishing to import foreign pharmaceutical products to apply for annual quotas. These activities are set to be phased out under the US-Vietnam Bilateral Trade Agreement. In Vietnam, MSD is mostly involved in supplying prescription products for a number of conditions. These include cardiovascular diseases, osteoporosis, asthma, osteoporosis and severe infections as well as range of other conditions such as hepatitis B. © Business Monitor International Page 132 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 In January 2011, MSD announced that it will establish a 100% foreign-owned company in Vietnam. Headquartered in the capital Ho Chi Minh City, the operation will sell highmargin patented drugs, such as the cervical cancer vaccine Gardasil. Recent Developments In March 2013, the firm opened a new representative office in Hanoi highlighting that Hanoi itself has more than 1000 pharmacies and thus it 'should be a potential healthcare market'. The new office will help MSD 'optimise marketing activities for healthcare products to people'. In November 2011, MSD established the Vietnam Society for Reproductive Medicine with Vietnam Gynaecology and Obstetrics Association. In February 2011, MSD, along with the Programme for Appropriate Technology in Health (PATH) and the National Institute of Hygiene and Epidemiology (NIHE), emerged to provide corporate social responsibility (CSR) activities, giving part of their profits to the development of community. At the end of May 2009, distributor Diethelm Vietnam Corp increased the prices of 14 speciality drugs - manufactured Merck - by 7.3-10%. The prices of imported drugs had been increasing as a result of currency depreciation and the growing price of raw materials. In March 2009, MSD said it regretted a labelling mistake on its measles, mumps and rubella vaccine. MMRII was labelled with instructions saying 'for intramuscular injection' rather than 'for subcutaneous injections'. No adverse reaction was reported. MSD's cervical cancer vaccine Gardasil has been approved in Vietnam, as has its competitor, GSK's Cervarix. GSK has reduced the price of its products, increasing competitive pressure. Company Details ■ ■ Merck & Co Merck, Sharp & Dohme Asia Vietnam Branch 16th Floor, Kumho Asiana Plaza 39 Le Duan Street, District Ho Chi Minh City Vietnam ■ Tel: +84 3915 5800 © Business Monitor International Page 133 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 GSK SWOT Analysis Strengths Weaknesses Opportunities Threats Company Overview ■ One of the leading global producers of medicines. ■ Some of its products are covered by the public insurance scheme. ■ Considerable product portfolio, including consumer medicines and vaccines. ■ Difficult IP environment. ■ No direct manufacturing or R&D presence in the country. ■ Counterfeiting remains a problem. ■ Rising demand for branded products following healthcare sector modernisation. ■ Pending overhaul of the regulatory climate, aiming to boost foreign investment. ■ Strong regional experience and connections. ■ Legal trade barriers protecting local players and disadvantaging multinationals. ■ Country susceptible to economic and currency fluctuations. ■ Legalisation of parallel imports negatively impacting performance of branded drugs. GSK began operating in Vietnam in 1994, with a staff of only seven. In the following years, GSK merged with Wellcome, and became GSK Vietnam. The company offers a range of prescription medicines, although not all of its products are covered by public insurance, as is the case with Advair/Seretide (fluticasone + salmeterol). Recent Developments In June 2013, Ho Chi Minh City Department of Health announced that a batch of GSK's Cervarix (human papillomavirus vaccine) will have to be tested further to clarify its role in the death of a 17-year old girl, who died after getting a vaccination shot. In July 2012, it was revealed that GSK's Singapore division worked with a local pharmaceutical manufacturer to manipulate drug prices in Vietnam. The firm sold the drugs at prices 4-5 times higher than their original rates. The DAV granted licences to © Business Monitor International Page 134 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Vietnam-based Savi Pharmaceutical for the circulation of 15 types of medicines in 2008-2011. Between October 18 2011 to May 17 2012, Savipharm produced six of the drugs and sold them to GSK under an in-country export transaction, with the help of importer Phytopharma, at very low prices. In July 2011, after the recall of Augmentin (amoxicillin clavulanate) in Hong Kong, DAV requested the firm send samples of the drug to be tested for plasticisers. This was after the Taiwan di(2-ethylhexyl)phthalate (DEHP) scandal, where the Taiwanese government detected DEHP, a plasticiser, in various food and health products in May 2011. DEHP is known to disrupt hormonal actions, reducing testosterone levels in boys and causing early sexual development in girls. In March 2010, the US FDA voiced concerns over GSK's Rotarix vaccine. It was thought that the live oral preventative had been contaminated with a benign pig virus, known as porcine circovirus type (PCV-1). The US FDA recommended that any use of the vaccine be temporarily suspended. The DVA has also requested documents from GSK verifying the safety of the vaccine. GSK's cervical cancer vaccine Cervarix has been approved in Vietnam. Its competitor, MSD's Gardasil, also received approval in 2009. GSK reduced the price of its vaccine in mid-2010, in line with its 'differential pricing' strategy for certain products in select global markets. The government agency has also ordered 10,000 packets of GSK's Relenza (zanamivir) for Tamiflu-resistant patients. In late 2009, GSK's Augmentin's retail price rose from VND14,000 to VND15,000 per pack. Presently, the product costs in the region of VND175,000. Company Details ■ ■ GlaxoSmithKline GlaxoSmithKline Vietnam, The Metropolitan, Unit 701 235 Dong Khoi St, District Ho Chi Minh City Address line Postcode Vietnam ■ Tel: +84 3824 8744 © Business Monitor International Page 135 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Demographic Forecast Demographic analysis is a key pillar of BMI's macroeconomic and industry forecasting model. Not only is the total population of a country a key variable in consumer demand, but an understanding of the demographic profile is key to understanding issues ranging from future population trends to productivity growth and government spending requirements. The accompanying charts detail Vietnam's population pyramid for 2011, the change in the structure of the population between 2011 and 2050 and the total population between 1990 and 2050, as well as life expectancy. The tables show key datapoints from all of these charts, in addition to important metrics including the dependency ratio and the urban/rural split. Source: World Bank, UN, BMI © Business Monitor International Page 136 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Table: Vietnam's Population By Age Group, 1990-2020 ('000) 1990 1995 2000 2005 2010 2012e 2015f 2020f 67,102 74,008 78,758 83,161 87,848 89,730 92,443 96,355 0-4 years 9,340 9,212 7,002 6,776 7,186 7,186 7,026 6,529 5-9 years 8,685 9,193 9,124 6,921 6,703 6,885 7,143 6,982 10-14 years 7,504 8,604 9,142 9,038 6,844 6,539 6,668 7,104 15-19 years 7,127 7,408 8,535 9,064 8,963 8,161 6,806 6,628 20-24 years 6,492 7,003 7,305 8,420 8,954 9,115 8,892 6,745 25-29 years 5,893 6,361 6,879 7,167 8,284 8,602 8,862 8,803 30-34 years 4,884 5,779 6,250 6,765 7,058 7,475 8,202 8,779 35-39 years 3,965 4,794 5,688 6,163 6,677 6,770 6,991 8,131 40-44 years 2,420 3,884 4,710 5,614 6,086 6,304 6,609 6,925 45-49 years 2,039 2,358 3,802 4,653 5,548 5,761 6,012 6,536 50-54 years 1,933 1,968 2,287 3,739 4,580 4,936 5,449 5,914 55-59 years 1,946 1,843 1,887 2,201 3,617 4,001 4,446 5,305 60-64 years 1,544 1,822 1,737 1,767 2,076 2,573 3,455 4,268 65-69 years 1,283 1,391 1,659 1,582 1,621 1,649 1,927 3,233 70-74 years 919 1,084 1,194 1,439 1,389 1,384 1,438 1,729 1,127 1,305 1,559 1,852 2,264 2,388 2,516 2,743 Total 75+ years f = BMI forecast. Source: World Bank, UN, BMI © Business Monitor International Page 137 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Table: Vietnam's Population By Age Group, 1990-2020 (% of total) 1990 1995 2000 2005 2010 2012 2015f 2020f 0-4 years 13.92 12.45 8.89 8.15 8.18 8.01 7.60 6.78 5-9 years 12.94 12.42 11.58 8.32 7.63 7.67 7.73 7.25 10-14 years 11.18 11.63 11.61 10.87 7.79 7.29 7.21 7.37 15-19 years 10.62 10.01 10.84 10.90 10.20 9.10 7.36 6.88 20-24 years 9.68 9.46 9.27 10.13 10.19 10.16 9.62 7.00 25-29 years 8.78 8.60 8.73 8.62 9.43 9.59 9.59 9.14 30-34 years 7.28 7.81 7.94 8.14 8.03 8.33 8.87 9.11 35-39 years 5.91 6.48 7.22 7.41 7.60 7.55 7.56 8.44 40-44 years 3.61 5.25 5.98 6.75 6.93 7.03 7.15 7.19 45-49 years 3.04 3.19 4.83 5.59 6.32 6.42 6.50 6.78 50-54 years 2.88 2.66 2.90 4.50 5.21 5.50 5.89 6.14 55-59 years 2.90 2.49 2.40 2.65 4.12 4.46 4.81 5.51 60-64 years 2.30 2.46 2.21 2.12 2.36 2.87 3.74 4.43 65-69 years 1.91 1.88 2.11 1.90 1.85 1.84 2.08 3.36 70-74 years 1.37 1.46 1.52 1.73 1.58 1.54 1.56 1.79 75+ years 1.68 1.76 1.98 2.23 2.58 2.66 2.72 2.85 f = BMI forecast. Source: World Bank, UN, BMI © Business Monitor International Page 138 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Table: Vietnam's Key Population Ratios, 1990-2020 Dependent ratio, % of total working age Dependent population, total, '000 Active population, % of total Active population, total, '000 Youth population, % of total working age Youth population, total, '000 1990 1995 2000 2005 2010 2012 2015f 2020f 75.5 71.2 60.5 49.7 42.1 40.9 40.6 41.6 28,859 30,790 29,679 27,609 26,006 26,031 26,717 28,321 57.0 58.4 62.3 66.8 70.4 71.0 71.1 70.6 38,243 43,218 49,079 55,552 61,842 63,699 65,725 68,034 66.8 62.5 51.5 40.9 33.5 32.4 31.7 30.3 25,529 27,009 25,268 22,735 20,732 20,610 20,837 20,615 8.7 8.7 9.0 8.8 8.5 8.5 8.9 11.3 3,330 3,780 4,411 4,874 5,274 5,421 5,881 7,706 Pensionable population, % of total working age Pensionable population, '000 f = BMI forecast; 0>15 plus 65+, as % of total working age population; 0>15 plus 65+; 15-64, as % of total population; 15-64; 0>15, % of total working age population; 0>15; 65+, % of total working age population; 65+. Source: World Bank, UN, BMI Table: Vietnam's Rural And Urban Population, 1990-2020 1990 1995 2000 2005 2010 2012 2015f 2020f Urban population, % of total 20.3 22.2 24.3 26.4 28.7 29.7 31.2 33.9 Rural population, % of total 79.7 77.8 75.7 73.6 71.3 70.3 68.8 66.1 Urban population, '000 13,438.6 16,201.6 18,865.4 21,940.1 25,212.5 26,649.9 28,842.1 32,664.4 Rural population, '000 52,761.4 56,778.4 58,770.0 61,166.2 62,635.9 63,080.4 63,600.5 63,690.7 f = BMI forecast. Source: World Bank, UN, BMI © Business Monitor International Page 139 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Glossary ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Pharmaceuticals, medicines, drugs: synonym terms used interchangeably. Pharmaceutical market/sales: the sum of revenues generated by generic, patented, and over-the-counter (OTC) drugs through hospitals, retail pharmacies and other channels. Unless otherwise stated, market value is reported at final consumer price including mark-ups, taxes, etc. Prescription drugs: patented and generic drugs regulated by legislation that requires a physician's prescription before they can be sold to a patient. Patented drug: an innovative medicine granted intellectual property protection by the patent and trademark office. The patent may encompass a wide range of claims - such as active ingredient, formulation, mode of action, etc. - giving the patent holder the sole right to sell the drug while the patent is in effect. Generic drug: a bioequivalent medicine that contains the same active ingredient as an originator drug. The originator drug is an innovative medicine that no longer has intellectual property protection due to patent expiry. OTC drug: a medicine that does not require a prescription to be sold to patients. Also known as nonprescription medicines. Counterfeit drugs: unregistered and illegal medicines which have not been subject to regulatory assessments to ensure quality, safety, efficacy and manufacturing standards. Similares: non-bioequivalent alternatives to either an originator patented drug or a generic drug. While similares and the originator/generic drug have a common indication, similares not always contain the same active ingredient as an originator and invariably have a different pharmacokinetic and pharmacodynamic profile. Prevalent in select South American countries, similares are legal. BMI does not include their sales in total pharmaceutical market values. Health expenditure: the sum of the funds mobilised by government and private systems for the operation of a healthcare system, according to the World Health Organization (WHO). It includes the purchase of healthcare services and goods by public entities such as ministries and social security institutions; or by private entities such as non-profit institutions, commercial insurances and households acting as complementary funders to the previously cited institutions or unilaterally disbursing health commodities. The revenue base of these entities varies by country and comprises multiple sources. The inclusion of this in BMI forecasts necessitates taking into account the essential attributes of countryspecific health accounting such as comprehensiveness, consistency, standardisation and timeliness. Government health expenditure: the sum of outlays for health maintenance, restoration or enhancement paid by government entities such as a Ministry of Health, other ministries, parastatal organisations and social security agencies, including transfer payments to households to offset medical care costs and extrabudgetary funds to finance healthcare provision. Private health expenditure: the sum of outlays for health by private entities such as commercial or mutual health insurance, households, non-profit institutions serving households, resident corporations and quasi-corporations not controlled by governments - according to the WHO. Medical devices: products used for diagnosis or therapy in patients. Whereas pharmaceuticals achieve their principal action by pharmacological, metabolic or immunological means, medical devices act by physical or mechanical means. Medical devices include a wide range of products, including syringes, thermometers, blood-sugar tests, prosthetic limbs, ultrasound scans and X-ray machines, among others. © Business Monitor International Page 140 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 ■ ■ Burden of Disease Database (BoDD): BMI's disease database incorporates WHO, World Bank, IMF and BMI's own data to create a proprietary dataset. BoDD data are quantified as the sum of disabilityadjusted life years lost to a disease in a particular country. Disability-Adjusted Life Years (DALYs): the sum of the years of life lost (YLL) due to premature mortality in a population and the years lost due to disability (YLD) for incident cases of the health condition. The DALY is a health gap measure that extends the concept of potential years of life lost due to premature death (PYLL) to include equivalent years of 'healthy' life lost in states of less than full health (broadly termed 'disability'). One DALY represents the loss of one year of equivalent full health. © Business Monitor International Page 141 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Methodology Pharmaceutical Expenditure Forecast Model Historic pharmaceutical market data is collected from a range of sources including: ■ regulatory agencies; ■ pharmaceutical trade associations; ■ company press releases and annual reports; ■ subscription information providers; ■ local news sources; ■ information from market research firms that is in the public domain. Currently available data varies in confidence levels, so it is calibrated by the BMI's Pharmaceuticals & Healthcare analysts. In the absence of a complete time series of numbers, intermediate years are calculated from secondary sources. This 'composite' approach is used to ensure accuracy and consistency of historic data, which is crucial for reliable forecasts. To remove the effect of inflation, real pharmaceutical expenditure figures are then calculated by removing the annual average consumer price index (CPI). Real per-capita pharmaceutical expenditure numbers are calculated by dividing by population figures. A linear regression (see Note for explanation) is then performed on five years of real per-capita pharmaceutical expenditure against real per-capita final consumption (see Note 2). From analysis of the top 130 economies, BMI has established a strong statistical relationship between pharmaceutical expenditure and final consumption expenditure (r = 0.985). Healthcare Expenditure Forecast Model Historic public and private healthcare expenditure data is sourced from the World Health Organization (WHO)'s Global Health Expenditure Database, which contains the National Health Accounts (see Note for methodology). © Business Monitor International Page 142 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Data is provided in nominal local currency terms. To remove the effect of inflation, real healthcare expenditure figures are then calculated by removing the annual average consumer price index (CPI). Real per-capita healthcare expenditure numbers are calculated by dividing by population figures. A linear regression is then performed (see Note for explanation). Firstly on five years of real per-capita public healthcare expenditure against real per-capita government final consumption expenditure (See Note for definition). This generates a 10-year forecast of future of real per-capita public healthcare expenditure figures from 'known' projected real per-capita government final consumption expenditure figures. Another linear regression is simultaneously performed on real per-capita private healthcare expenditure against real per-capita private final consumption expenditure. (see Note for definition). To general the nominal public healthcare spending forecast, population and CPI numbers are returned to both real per-capita public healthcare expenditure figures and real per-capita private healthcare expenditure figures. The overall healthcare expenditure forecast is then calculated by combining public and private healthcare expenditure. Notes On Methodology Note - National Health Accounts methodology. The global health expenditure database that WHO has maintained for the past ten years, provides internationally comparable numbers on national health expenditures. WHO updates the data annually, taking, adjusting and estimating the numbers based on publicly available reports (national health account reports, reports from the Ministry of Finance, Central Bank, National Statistics Offices, public expenditure information and reports from the World Bank, the International Monetary Fund, etc). The estimates are sent out to the Ministries of Health for validation prior to publication but users are advised that country data may still differ in terms of definitions, data collection methods, population coverage and estimation methods used. This database is the source for the health expenditure tables in the World Health Statistics Report and the WHO Global Health Observatory. Note - Linear regression equation. © Business Monitor International Page 143 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 y = mx + b Where y = unknown variable, m = slope of gradient, x = known variable, and b = where the line crosses the y-axis. Note - Final consumption is the sum of government final consumption expenditure and private final consumption expenditure. Government final consumption expenditure is the sum of expenditures on final goods and services by the government. Included in this are public sector salaries, but does not include transfer payments such as unemployment benefits or pensions. Private final consumption expenditure is the sum of all private consumption of goods and services within the economy, including both durable and nondurable goods. Housing purchases, however, is excluded. Government final consumption expenditure and private final consumption expenditure are the 'G' and 'C' in this equation: GDP = C + I + G + (X - M) Where GDP = gross domestic product, C = private final consumption expenditure, I = gross investment, G = government final consumption, X = exports, and I = imports. © Business Monitor International Page 144 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. [...]... International Page 30 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Pharmaceuticals to build a manufacturing plant in Africa Mekophar also exports medicines to the Democratic Republic of the Congo, Myanmar and Russia In the meantime, as a greater proportion of Vietnam' s vast population become consumers of pharmaceuticals, various state agencies are looking for local producers or Vietnamese subsidiaries... Med Review reports that medicine prices in Vietnam are high, both for © Business Monitor International Page 20 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 patented and generic drugs, and that regulation is required to control mark-ups One other method of keeping prices to reasonable levels is through controlling the volume of drugs on the market Hospitals remain the primary source of healthcare, ... forecast Source: BMI, Drug Administration of Vietnam (DAV), Vietnam Ministry of Health, domestic companies, local press © Business Monitor International Page 26 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 OTC Medicine Market Forecast Despite the blurred distinction between prescription OTC Medicine Market Forecast and non-prescription products, OTC healthcare has 2009-2022 been achieving relatively... 27.20 26.91 26.67 26.43 26.19 25.94 25.69 25.44 f = BMI forecast Source: BMI, Drug Administration of Vietnam (DAV), Vietnam Ministry of Health, domestic companies, local press © Business Monitor International Page 29 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Pharmaceutical Trade Forecast Vietnam is highly reliant on pharmaceutical imports Latest data from UN Commodities Trade Database (UNComtrade)... Page 11 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Economic SWOT Analysis Strengths ■ Vietnam has been one of the fastest-growing economies in Asia in recent years, with GDP growth averaging 7.1% annually between 2000 and 2012 ■ The economic boom has lifted many Vietnamese out of poverty, with the official poverty rate in the country falling from 58% in 1993 to 14.0% in 2010 Weaknesses ■ Vietnam. .. progress of Vietnam' s healthcare and pharmaceutical industries However, whether such reform can be carried out successfully is a matter for much conjecture given the disorganised state of the sector Nevertheless, Vietnam' s WTO membership since early 2007 is expected to stimulate other similar deals in the region © Business Monitor International Page 34 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Macroeconomic... total sales 23.80 23.43 23.08 22.69 22.33 21.94 21.54 21.14 20.72 f = BMI forecast Source: BMI, Drug Administration of Vietnam (DAV), Vietnam Ministry of Health, domestic companies, local press © Business Monitor International Page 24 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Generic Drug Market Forecast Although the overall generic drug market is sizeable, Generic Drug Market Forecast standing... authorities aim to have 80% of domestic demand met by local producers by 2020, up from around 50% currently © Business Monitor International Page 17 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Table: Healthcare Expenditure Indicators, 2009-2017 2009 2010 2011 2012 2013f 2014f 2015f 2016f 2017f Health expenditure (US$bn) 6.5 7.1 8.4 9.5 10.9 12.5 14.2 15.9 17.7 Health expenditure (US$bn), % chg y-o-y 9.0... the European © Business Monitor International Page 27 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Self-Medication Industry (AESGP), consumers in Vietnam (at 45% of the total) are among the most likely to take an OTC drug for a minor ailment as soon as symptoms are present Market research also established that it is common for people in Vietnam to ask the advice of unlicensed pharmacists or... 153.3 170.6 187.8 Health expenditure (% GDP) 7.0 6.8 6.8 6.8 6.8 6.8 6.7 6.7 6.6 Source: BMI, WHO © Business Monitor International Page 18 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 Table: Healthcare Governmental Indicators, 2009-2017 2009 2010 2011 2012 2013f 2014f 2015f 2016f 2017f Government health expenditure (US$bn) 2.5 2.6 3.4 3.8 4.3 4.9 5.4 6.1 6.7 Government health expenditure (US$bn), . Pharmaceutical 113 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 © Business Monitor International Page 5 Vietnam Pharmaceutical Corporation (Vinapharm) 115 Vietnam OPV Pharmaceutical Co 118 Vietnam. Q3 2013 www.businessmonitor.com VIETNAM PHARMACEUTICALS & HEALTHCARE REPORT INCLUDES 5-YEAR FORECASTS TO 2017 ISSN 1748-2305 Published by:Business Monitor International Vietnam Pharmaceuticals. Methodology 143 Vietnam Pharmaceuticals & Healthcare Report Q3 2013 © Business Monitor International Page 6 BMI Industry View BMI View: Vietnam& apos;s pharmaceutical and healthcare sectors