Vietnam has the second-largest pharmaceutical market in Southeast Asia with a revenue of 8.9 billion USD in 2024. However, the largest company in Vietnam, Hau Giang Pharmaceuticals (DHG), is only valued at 511 million USD, while the “giant” of Indonesia, PT Kalbe Farma Tbk, has a market capitalization of 3.9 billion USD, greater than the total value of the ten largest Vietnamese pharmaceutical companies combined. The main reason for this discrepancy is not only the larger population size but also the fragmented Vietnamese pharmaceutical market, which mainly produces generic drugs with low profit margins and little innovation. Kalbe Farma has heavily invested in research and development (R&D), creating a diverse product portfolio. Vietnamese pharmaceutical businesses face challenges with declining revenues and profits, though foreign investment continues to flow into the sector through M&A activities. The amended Drug Law, effective from July 2025, promises to boost the pharmaceutical industry and ensure quality medications for the public.
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