Pharma industry picks up the pace in digital

Pharma industry picks up the pace in digital. Photo: freepik.com

Nguyen Hoang, co-founder and CEO of pharma supply chain specialists thuocsi.vn, realises that as there are no major multi-brand distributors in Vietnam, most pharma manufacturers and brands end up building their own networks, fragmenting the process of providing prescriptions and supplies to healthcare providers. This results in distributors serving over 40,000 independent pharmacies and an estimated 5,000 independent clinics.

“The pandemic has forced stakeholders in industry to go digital faster than ever before,” Hoang said.

Thuocsi.vn has resolved this fragmentation by building a pharmaceutical distribution marketplace to simplify the distribution system. The platform has an extended network of 700 verified suppliers, distributors, and manufacturers, serving over 7,000 healthcare providers. This month, the startup has secured $8.8 million in its latest funding round led by South Korea’s Smilegate Investment along with Nextrans and Cocoon Capital to expand its operation.

Likewise, POC Pharma also wrapped up a $4.5 million investment in April to digitalise pharmacies in Vietnam. POC Pharma is a technology solutions company offering omnichannel sales management, trade programme systems, remote selling, and proprietary data.

POC founder Thomas Miklavec, whose clients include global pharma firms like Bayer Pharma and Pfizer said, “We help stakeholders in the pharmaceutical industry to mix digital and physical interaction. We put on the table the solutions that enable stakeholders like manufacturers, distributors, small sellers, and pharmacies to implement the digital transition.”

Meanwhile, Chothuoctay.com is operated as an e-commerce platform in pharma. It helps independent pharmacies, manufacturers, and distributors to set up shops online to reach more customers.

CEO Huynh Suong said, “Drug trading is a conditional business so to operate in the platform we require pharmacies and manufacturers to provide their licenses. Meanwhile, customers will show their prescriptions if they want to buy any drugs.”

Along with digital health startups, big pharma retail chains have also formulated digital transformation strategies. Pharmacity, Vietnam’s largest pharmacy chain, has a plan to strengthen its digital infrastructure. In the next five years, Pharmacity will launch a super-app that will provide various services such as e-pharmacist and e-doctor, healthcare records, emergency ambulance booking, and at-home or in-patient care services.

In the latest move, Pharmacity’s parent company Maroon Bells issued more than VND1 trillion ($43.9 million) of convertible bonds to fund its upcoming expansion.

Meanwhile, FPT Retail with the backing of tech giant FPT continuously adopts digital tools to optimise product management for the Long Chau pharmacy chain. By using technology, staff at Long Chau can quickly locate the position of each drug box to give to customers. Meanwhile, its real-time system can monitor the expiration date of its 5,000 products, thereby cutting the cost of disposing of expired drugs. As a result, Long Chau has quickly improved its services and scaled up its presence with nearly 300 outlets.

According to the Digital Health in Vietnam report by KPMG, innovation and technology have touched many aspects of life in Vietnam and healthcare is no exception. In a concerted effort to embrace Industry 4.0, the Vietnamese government has committed to a national agenda that seeks to harness the potential of digital solutions across the health system. This has set a solid foundation for digital transformation in Vietnam.

In an age of growing challenges from non-communicable diseases and emerging threats from infections such as COVID-19, digital health has the potential to offer new solutions and alleviate pressure on overstretched health systems.

Market research firm IBM forecasts that the entire scale of the Vietnamese pharmaceutical industry could reach $7.7 billion by the end of 2021 and up to $16.1 billion by 2026, and the compound annual growth rate could reach 11 per cent. According to IQVIA, the total value of pharmaceutical products consumed in Vietnam will continue growing in 2021, estimated at VND123.6 trillion ($5.42 million), an increase of about 8.0 per cent compared to the same period last year.