Vietnam Pharma Stocks Draw Foreign Interest as Drug Market Nears US$10 Billion

Vietnam pharmaceutical market enters a new growth phase

Vietnam’s pharmaceutical market is approaching US$10 billion in 2026, attracting global drugmakers and investors who see strong demand, improving manufacturing standards and a growing role for local companies in regional supply chains.

Industry estimates place the market at about US$7 billion in 2023, after expanding from US$3.4 billion in 2015. Other research groups have put the 2025 market at between US$7.9 billion and US$8.6 billion, with longer term forecasts ranging from US$13 billion to US$16 billion by the early 2030s. The different estimates reflect variations in market definitions and research methods, yet they point to the same trend: Vietnam remains one of Southeast Asia’s fastest growing drug markets.

Annual medicine spending has risen to about US$75 per person. That figure remains below spending levels in Thailand and Malaysia, leaving room for further growth as household incomes increase and healthcare becomes more accessible. Health insurance now covers about 95.2 per cent of the population, supporting demand for prescription medicines and treatment through public hospitals.

The market is also changing in composition. Hospital sales, known as the ethical drug or ETC channel, account for roughly 70 to 76 per cent of medicine consumption and are growing at about 12 per cent a year. Retail over the counter sales are expanding more slowly, at around 8 per cent. The difference reflects the rising use of hospital services, wider insurance coverage and increasing treatment of chronic diseases.

Why demographics and disease patterns matter

Vietnam is moving rapidly from a relatively young population toward an older one. People aged 60 and above made up 13.9 per cent of the population in 2023, a share projected to exceed 25 per cent by 2050. The country is expected to become a super aged society by 2074.

Ageing is changing the type of medicines in demand. Cardiovascular disease, diabetes and cancer now account for roughly 77 to 80 per cent of deaths in Vietnam. These conditions often require long term treatment, regular monitoring and more expensive prescription medicines than short term remedies for common illnesses.

Prescription drug sales are forecast to rise from about VND127.9 trillion, or US$4.87 billion, in 2025 to VND187.7 trillion by 2030. By 2035, the segment could reach VND260 trillion, or about US$9.9 billion, and account for nearly 80 per cent of the total pharmaceutical market.

Rising incomes and greater health awareness are reinforcing that demand. Consumers are seeking earlier diagnosis and treatment, while hospitals are expanding services for cancer, diabetes and other non communicable diseases. Modern pharmacy chains are also making medicines more widely available. FPT Long Chau had 2,417 stores at the end of 2025 and controlled more than one quarter of the modern retail pharmacy market. Pharmacity had about 1,040 outlets.

Foreign investors choose established local platforms

International companies are increasingly using acquisitions and strategic stakes to enter Vietnam rather than building new factories from the ground up. Buying into an established manufacturer provides immediate access to distribution networks, hospital relationships, product registrations, local brands and production licences.

Japan’s Taisho has increased its holding in DHG Pharmaceutical to a controlling position of about 51 per cent. The investment has supported changes in governance, product development and research capacity at Vietnam’s largest domestic drugmaker.

China’s Livzon Pharmaceutical has also become a major shareholder at Imexpharm. Research published in 2026 put Livzon’s stake at 67.87 per cent, acquired for approximately VND6 trillion, or US$228.5 million. Livzon’s participation highlights the value of Imexpharm’s manufacturing plants, several of which meet EU GMP requirements.

Abbott Laboratories, through its subsidiary CFR International, raised its ownership in Domesco to 51.7 per cent. The transaction gives Abbott control of a Vietnamese producer and strengthens its domestic manufacturing base for wider Asian operations.

South Korean capital has entered through Traphaco. Daewoong Pharmaceutical and Mirae Asset acquired 16.6 million shares from Mekong Capital and Vietnam Holding, representing a 40.12 per cent stake in a transaction worth more than VND2.35 trillion. Daewoong became the strategic shareholder, while Mirae Asset took a long term financial investment role.

What makes EU GMP plants so valuable?

EU GMP, or Good Manufacturing Practice standards recognised by the European Union, cover the way medicines are produced, tested and documented. Meeting these requirements requires reliable equipment, controlled production areas, trained staff, careful quality checks and detailed records.

Vietnam has about 288 pharmaceutical factories, yet only an estimated 20 to 30 currently meet stringent EU GMP standards. This limited supply makes certified plants attractive to overseas groups. A buyer can gain access to higher value hospital tenders and improve its ability to export medicines to markets with demanding quality rules.

Vietnamese procurement rules have added to that appeal. Under Circular 03 of 2024, medicines made at facilities certified under EU GMP or Japan GMP standards receive preferential access in Group 1 and Group 2 public tenders. Those groups represent roughly 60 per cent of procurement value in the hospital channel.

The amended Law on Pharmacy, which took effect on July 1, 2025, also streamlined registration procedures and created incentives for advanced generic medicines and biosimilars. Biosimilars are biological medicines designed to closely match already approved products, while advanced generics reproduce complex medicines after patent protection ends.

A global patent expiry cycle through 2030 could create a major opening for Vietnamese manufacturers. Medicines with combined annual sales of about US$207 billion are expected to lose patent protection during this period. Local producers with suitable research capacity and certified factories could develop lower cost alternatives to imported products.

Stock performance reflects more than defensive demand

Pharmaceutical shares have traditionally been viewed as defensive investments because people need medicines in both strong and weak economic periods. Foreign acquisitions and higher healthcare spending are now giving investors another reason to examine the sector: the prospect of structural growth and corporate transformation.

Share performance has varied since the beginning of 2026. Binh Dinh Pharmaceutical and Medical Equipment has recorded double digit gains on expectations of stronger oncology sales and hospital distribution. DHG Pharma and Imexpharm have maintained upward trends, supported by sound finances, established brands and foreign strategic backing.

The sector has shown resilience during periods of market pressure. The healthcare index on the Hochiminh Stock Exchange fell 8.9 per cent in April and more than 5 per cent in June, while several pharmaceutical shares held up better. This does not remove the risks of valuation or market volatility, yet it shows why investors continue to regard drugmakers as relatively stable businesses.

Securities firms expect sector earnings to grow by about 10 to 12 per cent in 2026. The main drivers are rising medicine consumption, stronger hospital sales, wider insurance coverage and government policies that favour domestically manufactured products.

Foreign ownership can bring technology and governance

Recent transactions show that foreign investment is bringing more than capital. Strategic shareholders can provide production technology, quality systems, research partnerships, international procurement expertise and access to export markets.

Hau Giang Pharmaceutical, known as DHG Pharma, has set a 2026 revenue target of about US$221.2 million and an after tax profit target of US$40.3 million. Those goals represent increases of 5 per cent and more than 18 per cent respectively. The company also plans to maintain a high cash dividend policy, which may appeal to income focused investors.

Traphaco has set targets of nearly US$120 million in revenue and US$12.2 million in after tax profit for 2026, with both figures expected to rise by about 10 per cent. Its 2026 to 2030 strategy includes expansion in modern retail and hospital distribution, along with technology cooperation with South Korean partners in higher quality medicines.

Results from 2025 show the strength of several leading companies. DHG Pharma reported net revenue of VND5.27 trillion, up 7.8 per cent, while pretax profit increased 12.8 per cent to VND1.02 trillion. Imexpharm recorded revenue of VND2.44 trillion, up 11 per cent, and a record net profit of VND349 billion. Vinapharm reported a 38.5 per cent rise in pretax profit to VND705 billion.

Analysts are focusing on companies with long operating histories, trusted brands, wide distribution and room for foreign ownership. Such businesses can grow through better products and systems without having to build an entirely new commercial network.

Imported ingredients remain a major weakness

Vietnam’s drug industry still depends on imports for about 80 to 90 per cent of its active pharmaceutical ingredients. Nearly 90 per cent of those imports come from China and India. Active pharmaceutical ingredients are the substances that produce the medical effect in a finished drug.

This dependence exposes manufacturers to currency movements, shipping disruptions, international trade tensions and changes in supplier prices. Domestic production costs are estimated to be 20 to 25 per cent higher than those of manufacturers in China and India, making it harder for Vietnamese companies to compete on price.

The government has set a target of meeting 80 per cent of domestic medicine demand through local production by 2030. A separate national programme aims for local industry to supply 20 per cent of pharmaceutical raw materials by that year, with a longer term goal of creating a high technology industry that can join global pharmaceutical supply chains by 2045.

Specialised industrial projects, including the Thai Binh Bio Pharma Industrial Park, are intended to support chemical production, research and medicine manufacturing. Reaching the targets will require large investment in laboratories, skilled workers, chemical plants and quality control.

Logistics and exports add another layer of growth

Medicine production depends on reliable storage and transport, especially for vaccines, biologics and other products that must remain within a narrow temperature range. Vietnam’s cold storage capacity grew by nearly 45 per cent between 2020 and 2023, reaching about 1.3 million pallets by late 2024. The country had 117 cold storage facilities, 1,499 refrigerated trucks and 47 specialised transport units.

Capacity could exceed 1.7 million pallets by 2028 as investors build facilities with automated storage, digital tracking and real time temperature monitoring. Southern provinces such as Long An, Dong Nai and Binh Duong form a major logistics cluster because of their ports, industrial zones and access to the Mekong Delta. Northern centres including Hai Phong, Bac Ninh and Hung Yen are also expanding services for medicines and export manufacturing.

International logistics groups are investing in this network. Lotte Global Logistics has begun developing a US$34 million cold chain centre in Dong Nai, while Nichirei and Daiwa House have backed projects in Long An. Better temperature control can reduce medicine losses and help manufacturers meet export standards in Europe, Japan and the United States.

Vietnam exported medicines and pharmaceutical ingredients worth US$312 million in 2025, ranking fourth in Southeast Asia. Foreign invested companies accounted for about US$230 million of that total. Export growth remains modest compared with domestic consumption, yet it signals rising confidence in locally produced medicines.

What investors will watch next

Research from SHS describes 2025 to 2030 as a new growth cycle, marked by a shift from conventional generic production toward international quality standards and higher value medicines. Viet Dragon Securities expects more acquisition activity among companies with strong hospital channels, modern factories and enough ownership capacity for strategic investors.

Industry estimates suggest that five to seven healthcare and pharmaceutical transactions worth more than US$100 million each could take place during 2026 and 2027. Foreign invested companies could control 40 to 50 per cent of the domestic drug market by 2030, although that forecast depends on future regulations, valuations and the ability of local firms to upgrade.

For investors, the strongest candidates are likely to combine EU GMP or Japan GMP certification, reliable finances, hospital access and research plans. Companies that depend heavily on low margin products or lack capital for modernisation may face greater pressure as global groups raise the standard of competition.

Vietnam’s drug market is therefore becoming a story of both consumption and industrial change. An ageing population and wider insurance coverage are expanding demand, while foreign investment is helping local manufacturers improve production, governance and market access. The central challenge will be turning this capital inflow into stronger domestic research and raw material capacity.

The Bottom Line

• Vietnam’s pharmaceutical market is expected to approach US$10 billion in 2026.
• Hospital medicines account for roughly 70 to 76 per cent of consumption and are growing faster than retail products.
• Taisho, Livzon, Abbott, Daewoong and Mirae Asset have taken major positions in Vietnamese drugmakers.
• EU GMP certified factories are scarce and highly attractive to foreign investors.
• Sector earnings are forecast to increase by about 10 to 12 per cent in 2026.
• Vietnam still imports about 80 to 90 per cent of its active pharmaceutical ingredients.
• Cold chain investment is improving the storage and distribution of temperature sensitive medicines.
• Future growth will depend on research, advanced manufacturing and stronger domestic raw material production.