Pharmaceutical Industry in Vietnam

by

Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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Abstract

The pharmaceutical industry has grown tremendously in the recent years. This study helps in analyzing the pharmaceutical industry of Vietnam, its potential. Furthermore, the study also highlights the challenges/hurdles that the domestic and foreign pharmaceutical companies are facing in Vietnam. The research was conducted using primary methodology. Senior managers from two domestic and two foreign firms were interviewed to obtain the data on the challenges/hurdles that the Vietnam pharmaceutical companies are facing. The results show that there are many problems that the domestic and foreign firms are facing in Vietnam. It is also found that there are many key factors that are providing a huge potential for the pharmaceutical industry of Vietnam. The Vietnam government is trying very hard to maximize the opportunities and minimize the threats so that the pharmaceutical industry can achieve its potential success.

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

The Need for Medicine1

Research Aims and Objectives2

Significance of the Study3

Research Question4

Organisations of the Report4

CHAPTER 2: METHODOLOGY6

Research Design6

Literature Search8

Literature Selection Criteria8

Data collection methods8

Instrument Design9

Participants9

Data Analysis10

Access10

Informed Consent11

Confidentiality11

CHAPTER 3: LITERATURE REVIEW12

Management Knowledge and Foreign Markets12

Strategies to Manage Risk15

Investing in Emerging Economies16

PEST Analysis20

Political factors20

Economic factors20

Social factors20

Technological factors21

Porter Five Competitive Forces21

Threat of New Entrants22

Intensity of Rivalry among Existing Competitors23

Threat of Substitute Products24

Power of Buyers25

Power of Suppliers26

CHAPTER 4: PHARMACEUTICAL INDUSTRY IN VIETNAM28

Global Pharmaceutical Industry28

Vietnam: Brief Overview31

Vietnam's Pharmaceutical Industry32

Determinants of Foreign Investment34

Host Market34

Natural Resource Endowment35

Host Inflation Rate35

Exchange Rate36

Political Risk36

Openness to FDI37

Infrastructure Development37

PEST Analysis38

Political analysis38

Economic Analysis38

Social Analysis40

Technological Analysis41

Porter's Five Forces Analysis42

Threat of New Entrants43

Intensity of Rivalry among Existing Competitors44

Threat of Substitute Products44

Power of Buyers45

Power of Suppliers45

CHAPTER 5: CASE STUDIES47

Domestic Firms47

Vinapharm - Company Profile47

Vietnam OPV Company Profile48

Interview Results48

Leading Multinational Firms50

Pfizer- Company Profile50

Novartis- Company Profile50

Interview Results51

Conclusion52

CHAPTER 6: DISCUSSION54

Key Concerns in the Vietnam Pharmaceutical Industry54

Trademark Infringement and Unfair Competition54

Enforcement Mechanisms55

Counterfeits56

Patent Protection and Enforcement57

Data Protection58

Pricing Regime58

Price Hikes60

Price Freeze61

Key Growth Factors - Industry62

CHAPTER 7: CONCLUSION65

REFERENCES68

CHAPTER 1: INTRODUCTION

The Need for Medicine

People have used medicine for thousands of years to treat the ailing. As our world becomes increasingly global, methods of treatment also blend cross-culturally. Aside from traditional medications, modem medications such as antibiotics have proliferated all parts of the world! Today, modem medicine is even used in most remote areas of the world, and is often times recommended by developing countries' government agencies over traditional methods. Therefore it is not striking to see the pharmaceutical industry as one of the top global industries. A testament to the pharmaceutical industry's prominence is the fact that most of the competitive multinational pharmaceutical companies are "eyeing" the emerging markets of developing countries. Furthermore, the growth of the global pharmaceutical industry has been astounding within the past thirty ...