Pharma firms in fine health

Foreign pharmaceutical firms hiking stakes in local partners increased recently, with Chile-based CFR International SPA becoming a strategic partner of Domesco Medical Import Export Joint Stock Corporation (DMC), through holding a 44 per cent stake and having three board DMC members.

“It will help CFR grow its presence in fast growing markets like Vietnam through leveraging on DMC’s extensive distribution and supply network. In exchange, our technology development and pharmaceuticals trading expertise will help DMC boost investment and governance efficiency,” said CFR’ chief executive officer Alejandro Weinstein.

Earlier in February 2012, Vietnam Azalea Fund offered to purchase 1.24 million shares of Ho Chi Minh City-based Traphaco to raise its stake in the company from 25 to 35 per cent.

Last year saw a number of deals involving stock purchases and the transfer of firms operating in pharmaceutical and healthcare fields.

For instance, Dutch-based Stada Service Holding, a subsidiary of German-based Stada Group, got a 25.29 per cent stake in Pymepharco, which specialises in pharmaceuticals production and trading from Wellite International Limited with headquarters in Thailand. After the transaction Stada Service Holdings has a 49 per cent stake in Pymepharco.

According to the Ministry of Health’s (MoH) Drug Administration of Vietnam statistics, Vietnam is one of largest pharmaceuticals importers worldwide with an average 25 per cent per year pharmaceutical market growth.  

In fact, having foreign investors as shareholders does not always bring smiles to local pharmaceutical firms, take Mekophar Chemical Pharmaceutical as an example.

In light of Vietnam’s commitments to World Trade Organization in opening the pharmaceutical sector from January 1, 2009 businesses with direct foreign investment are illegible to distribute pharmaceuticals in the Vietnamese market.

Mekophar was listed on Vietnam’s stock market from October 2010. As of April 2011 foreign investors held 4.7 per cent chartered capital at Mekophar tantamount to VND4.33 billion ($204,000). This was why the firm was not green-lighted to add ‘pharmaceuticals wholesale and retail’ to its functions.

This stopped the firm from taking part in auctions to sell drugs to hospitals, distribute products to drugstores or apply for good production practice drugstore chain certification.

In respect to this matter, the prime minister has assigned the MoH to review current undertakings with WTO in pharmaceutical field and recommend remedies. The MoH must send relevant reports to the premier before July 31, 2012.