Russian pharma firms target burgeoning sector

As Vietnam imports 60-70 per cent of its medicines, foreign investors are keen to step in

In early November, Medipal-Onko, a Russian producer of drugs and medical devices, opened a representative office in Hanoi. This will allow the company to register its products, while studying business opportunities in Vietnam’s pharmaceutical market and popularising its products among locals.

“Medipal-Onko is the first Russian pharmacy firm that has opened a representative office in Vietnam. Vietnam, where the demand for imported medicines has grown strongly, has become an attractive market for international groups, including Medipal-Onko,” said Suvriugin Konstantin, business development manager at Medipal-Onko.

“As the ASEAN Economic Community (AEC) will be established by the end of this year, Vietnam would be a starting point for us to penetrate the ASEAN market, with its combined population of 600 million,” he added.

To serve its operations in Vietnam, Medipal-Onko has called on other Russian pharmacy firms to help develop and co-operate with the Vietnamese health sector. Addressing the opening ceremony, many other Russian firms, including Farmstandart, Rafarma, Soteks, Biotki, Nativa, and farmvestnik, also expressed their interest in the local market.

Talking to VIR at the opening ceremony, Maxim Stetsyuk, export sales director of Farmstandart, said, “Vietnam, home to a population of over 90 million people, has its pharmacy industry valued at around $3 billion. Each Vietnamese person spends an estimated $34 on medicines per year, compared to $150 million in Russia, and $800 in the US, and this spending is forecast to grow.”

“Despite the fierce competition due to the trend of expanding investment to Vietnam among foreign pharmacy businesses, we believe in our competitiveness,” he noted.

Addressing the event, Russian Ambassador to Vietnam Konstantin Vnukov stressed that the Free Trade Agreement between Vietnam and the Asia-Europe Economic Union would offer prospects for both Vietnamese and Russian businesses, and that the establishment of the office in Vietnam paved the way for Russian firms to expand their operations and increase their presence in the country.

Vietnam’s pharmacy market, which is said to have the highest growth rate in Southeast Asia, with 16 per cent per year, has become a magnet for foreign investors. Currently, about 171 pharmaceutical companies operate in Vietnam with 9 per cent of those being foreign invested enterprises and 4 per cent under joint ventures.