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Vietnam wants more FDI into drug sector
Vietnam is wooing foreign investors into its largely-untapped drug industry as the local demand for medicine is now heavily relied on imports, a top official said on Tuesday.
Truong Quoc Cuong, head of the National Drug Administration, said at an online meeting on Tuesday that foreign direct investment (FDI) into the sector had come to a standstill since 2007.
“In the past two years, no foreign investors have shown interest in the sector. Economic recession is to blame for the decline,” Cuong said, adding all operational foreign-invested projects in the industry had been licensed earlier.
According to the administration, the country now has 37 foreign invested projects in the medicine industry, 25 of which are operating with registered capital of US$286.6 million.
Currently, the country has 89 drug factories which meet Good Manufacturing Practice standards, 22 of which are foreign invested ones, he said.
Cuong observed that FDI in the sector was a modest number compared to the country’s total foreign investment capital. It is all the more worrying as not a single foreign investors showed up last year when Vietnam attracted a record US$60 billion of pledged FDI.
Deputy Prime Minister Nguyen Thien Nhan agreed, saying that it is a bad signal to the sector. Nhan noted that the country was now in need of stronger investment as local manufacturers could only meet nearly half of the country’s medicine demand.
To accelerate the sector’s development, Nhan suggested establishing an agency mandated to provide information on the drug market to potential investors.
“The agency should be a bridge between investors, particularly foreign investors, and the Government to promote investment and trade in the industry,” Nhan added.
Last year, Vietnam spent nearly US$1 billion on drug imports, an increase of nearly 14% year-on-year, according to the administration. Of the amount, only US$164 million was spent on imported pharmaceutical materials.
Meanwhile, local drug makers earned only US$33 million from exports, equal to only 17% of the target.
According to the administration, the country now has 300 drug manufacturers. However, these companies mainly produce generic medicine, while most specialized medicine must be imported from other countries.
Currently, drug spending in Vietnam averages out at US$16 per capita a year.
VietNamNet, SGT
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