The UK-Vietnam Free Trade Agreement (UKVFTA), along with other new-generation trade agreements, offers Vietnam significant chances to attract more foreign direct investment (FDI) into the pharmaceutical sector, a particularly welcomed development given that Vietnam has been working to strengthen its regulatory framework to transform itself into a regional hub for pharmaceutical manufacture.
Vietnam’s pharmaceutical industry is capturing the interest of foreign investors due to the nation’s rapidly expanding middle class, growing demand for healthcare services, and government attempts to enhance the legal system and infrastructure for the industry. According to consulting firm Dream Incubator (DI), Vietnam has great potential, given the relatively low average of pharmaceutical expenditure per capita compared to its regional peers.
Market research firm IBM estimated that the country’s pharmaceutical sector will grow to USD 16.1 billion by 2026, indicating a significant rise from around USD 7.7 billion in 2021. Similarly, Fitch Solutions also predicted that Vietnam’s pharmaceutical spending per capita would expand at a compound annual growth rate of 7.8% between 2022 and 2026, from VND 1.46 million in 2021 to VND 2.21 million in 2026 (from USD 60.8 to USD 92).
Thanks to the UKVFTA, Vietnam is now able to access to UK’s high–quality innovative drugs, as it immediately eliminates tariffs posed on several UK products imported into Vietnam. In addition, under the UKVFTA, Vietnam allows UK firms to establish foreign–invested entities to import authorized pharmaceuticals, along with increased access to the public procurement market for pharmaceutical products in Vietnam. The UK is currently 9th largest supplier of pharmaceutical products for Vietnam.
(Source: Viet Nam News)