Pharma Group expects new pharmaceutical law to open up potential

Darrell Oh, Pharma Group chairman

How much have Pharma Group member companies invested in Vietnam?

Pharma Group currently has 21 members, comprising leading innovative pharmaceutical companies from Europe, the US, and Japan. We have been investing in Vietnam for several decades.

Since 2019, following the introduction of the Pharma Law, companies have transitioned to a foreign-invested model, allowing them to directly import medicines and vaccines into Vietnam, thereby expanding our investment. Collectively, we employ more than 3,000 people directly and create over 15,000 indirect jobs. Our charter capital investment exceeds $100 million. Additionally, Pharma Group members invest substantial amounts annually in medical education, scientific activities, patient support programmes, corporate social responsibility initiatives, and donations, positively impacting hundreds of thousands of people.

Beyond these areas, our members are actively investing in clinical trials and local manufacturing, in line with the sector’s development goals. More companies are increasing their investment in clinical trials, both pre-marketing and post-marketing, and this area is expected to see significant growth in the future.

What should Vietnam focus on to attract investment from the pharmaceutical industry?

Vietnam has great potential to attract foreign investment, thanks to its growing domestic market, political and economic stability, and 16 active free trade agreements. However, while there has been progress in the pharma sector, Vietnam has not yet fully capitalised on its strengths and competitive advantages.

With intense competition from neighbouring countries offering incentives and continuously streamlining their regulations, it is essential for Vietnam to accelerate its efforts to attract foreign direct investment and innovation.

To do this, Vietnam should focus on three key areas: creating a business and investment-friendly environment through predictable and sustainable policies, ensuring early access to innovation, and providing a reliable foundation for long-term investment. A strong commitment to a streamlined regulatory process, adherence to regulatory timelines, and robust intellectual property protection are also critical.

Additionally, the government should offer incentives that prioritise innovation, such as establishing R&D hubs and encouraging investment in the early stages of product development, including clinical trials and advanced manufacturing capabilities.

An effective implementation process for the National Strategy for the pharmaceutical sector is also crucial. The recent establishment of the National Steering Committee is a positive step, but we recommend ongoing dialogue with the industry to monitor progress and quickly adapt to changes. Vietnam must introduce policies and incentives that are competitive with those offered by other countries in the region.

Are you satisfied with the current draft of the revised Pharmaceutical Law?

We support the new policies in the current draft law, particularly the regulatory reliance mechanism, which aims to speed up access to new medicines, vaccines, and biologics. The simplification of the marketing authorisation renewal process is another welcome change, as it will help avoid supply shortages like those seen in previous years. Additionally, the law includes policies to develop the pharma industry, with some improvements for foreign-invested enterprises, and offers incentives for local manufacturing of innovative medicines and R&D activities.

We appreciate the efforts of the drafting committee in consulting with the industry and other stakeholders throughout the law revision process. We expect the law to be ratified by the National Assembly in 2024, with a smooth transition period for marketing authorisation renewal. The industry looks forward to applying the new mechanism to existing dossiers, allowing medicines to maintain validity from January 2025 onwards to avoid any disruption.

We hope the government will issue guiding regulations in a timely manner to bring these advancements into action. Most importantly, we hope these regulations do not introduce additional administrative barriers and are accompanied by capability-building activities for both regulators and the industry. Pharma Group remains committed to supporting the finalisation and effective implementation of this important legislation.

Opportunities abound for innovative pharma industry Countries around the world are hoping to entice investment for their innovative pharmaceutical industries in order to bring socioeconomic benefits towards sustainable development strategies. Emin Turan, chairman of Pharma Group, talked to VIR’s Bich Thuy about the specific opportunities for Vietnam in this regard.

A more conducive environment needed for investors Last year marked Pharma Group’s 25-year journey of partnership in Vietnam. That year was even more significant for healthcare as we have witnessed several key laws issued with great improvements, notably the Law on Bidding and the Law on Medical Examination and Treatment.

Legal landscape adjusted for global pharma groups Multinational corporations operating in Vietnam are expected to benefit from new legal changes in the months to come, after years of delay.

Global pharma expects bumper year Increasing footprints in Vietnam in 2023, multinational corporations continue to eye stronger local partnerships to bring more new innovative medicines and vaccines to the local market in 2024 and beyond.