Vietnam Pharma Stocks Attract Foreign Investors as Drug Market Nears US$10 Billion

A growing medicine market draws global capital

Vietnam's pharmaceutical market is expected to approach US$10 billion in 2026, drawing foreign investors toward established local drugmakers with hospital networks, recognised brands and factories that meet demanding international standards. As of July 21, the investment story reaches beyond rising medicine sales: global companies are buying into businesses that could become a larger part of regional pharmaceutical supply chains.

Industry estimates put the market at about US$7 billion in 2023, compared with US$3.4 billion in 2015. Research groups estimate its size in 2025 at between US$7.9 billion and US$8.6 billion, with forecasts for the early 2030s ranging from US$13 billion to US$16 billion. Differences in market definitions and research methods explain the varying estimates. Together, they point to Vietnam remaining one of Southeast Asia's fastest growing medicine markets.

Annual spending on medicines has reached about US$75 per person. Spending remains below levels in Thailand and Malaysia, leaving room for growth as household incomes rise and healthcare becomes easier to access. Health insurance now covers about 95.2 per cent of Vietnam's population, helping support prescription medicine demand and treatment through public hospitals.

Foreign drugmakers see opportunities in that expanding demand, alongside improvements in manufacturing quality. For local companies, overseas investment can bring financing, production technology and access to markets beyond Vietnam. For investors in pharmaceutical shares, the attraction combines relatively steady demand for essential medicines with the prospect of changes in products, management and manufacturing capacity.

Several constraints remain central to this growth story. Factories meeting the strictest standards are scarce, most active pharmaceutical ingredients come from abroad, and domestic producers face higher costs than competitors in China and India.

Hospitals are driving the largest share of sales

Hospital medicine sales account for roughly 70 to 76 per cent of consumption in Vietnam and are growing at about 12 per cent a year. This market is known as the ethical drug, or ETC, channel. It covers medicines supplied through hospitals and treatment services, where prescriptions, insurance coverage and purchasing contracts shape demand.

Retail sales of medicines available without a prescription, known as over the counter products, are growing more slowly, at around 8 per cent a year. The faster expansion of hospital sales reflects greater use of hospital services, wider insurance coverage and more treatment for chronic diseases.

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

Modern pharmacy chains are also broadening access to medicines. 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. Their scale makes retail distribution an important part of the market even as hospitals account for the larger share of consumption.

An ageing population changes treatment needs

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

Cardiovascular disease, diabetes and cancer now account for roughly 77 to 80 per cent of deaths in Vietnam. These conditions often require treatment over many years, regular monitoring and prescription medicines that cost more than remedies used briefly for common illnesses.

Rising incomes and greater health awareness are reinforcing those needs. Consumers are seeking diagnosis and treatment earlier, while hospitals are expanding services for cancer, diabetes and other non communicable diseases. These are illnesses that do not spread from person to person.

Ageing therefore changes both the amount of medicine people need and the kinds of products manufacturers must supply. Companies with access to hospitals and the ability to make medicines for continuing treatment are positioned to serve a growing part of demand.

Foreign buyers choose established Vietnamese companies

International pharmaceutical groups are increasingly entering Vietnam through acquisitions and strategic shareholdings instead of constructing new factories from the ground up. An existing manufacturer offers distribution networks, relationships with hospitals, registered products, local brands and production licences in one business.

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

China's Livzon Pharmaceutical has become a major shareholder in Imexpharm. Research published in 2026 put Livzon's holding at 67.87 per cent, acquired for approximately VND6 trillion, or US$228.5 million. Several Imexpharm manufacturing plants meet EU GMP requirements, making their production capacity an important part of the investment's appeal.

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

South Korean investment 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 the role of a financial investor with a longer investment horizon.

These transactions give foreign groups an established route into Vietnam's medicine market. They also give local companies partners that can contribute technology, quality systems, research cooperation, international purchasing expertise and access to export customers.

Why certified factories command attention

Vietnam has about 288 pharmaceutical factories, but only an estimated 20 to 30 currently meet stringent EU GMP standards. That limited supply makes certified plants particularly attractive to overseas buyers seeking higher value hospital contracts and access to export markets with demanding quality rules.

EU GMP refers to Good Manufacturing Practice standards recognised by the European Union. The requirements govern how medicines are manufactured, tested and documented. Meeting them requires reliable equipment, controlled production areas, trained workers, careful quality checks and detailed records.

A certified factory therefore offers more than additional production space. It provides a manufacturing system capable of meeting demanding requirements, which can help a company compete for hospital tenders and sell medicines abroad.

Vietnam's procurement rules have strengthened that appeal. Under Circular 03 of 2024, medicines produced at facilities certified under EU GMP or Japan GMP standards receive preferential access in Group 1 and Group 2 public tenders. Together, those groups account for roughly 60 per cent of procurement value in the hospital channel.

A public tender is the process through which a hospital or public buyer selects suppliers for a purchasing contract. Access to the groups accounting for most hospital procurement value gives manufacturers a route into a large share of medicine spending.

Legal changes and patent expiries open opportunities

The amended Law on Pharmacy took effect on July 1, 2025. It streamlined registration procedures and introduced incentives for advanced generic medicines and biosimilars, supporting a shift toward products that require more sophisticated development and manufacturing.

Advanced generics reproduce complex medicines after patent protection ends. Biosimilars are biological medicines designed to closely match products that have already been approved. Both can offer local manufacturers opportunities beyond conventional generic production, provided they have suitable research capacity and certified factories.

Medicines with combined annual sales of about US$207 billion are expected to lose patent protection during the global patent expiry cycle through 2030. Vietnamese producers capable of developing alternatives could use that opening to supply medicines at lower cost than imported products.

The main dates connecting Vietnam's market growth, legal changes and longer term industrial ambitions are:

• 2015: Vietnam's pharmaceutical market was estimated at US$3.4 billion.
• 2023: The market reached about US$7 billion, while people aged 60 and above made up 13.9 per cent of the population.
• July 1, 2025: The amended Law on Pharmacy took effect.
• 2026: The pharmaceutical market is expected to approach US$10 billion.
• 2026 and 2027: Industry estimates anticipate five to seven healthcare and pharmaceutical transactions worth more than US$100 million each.
• 2030: Government targets call for local production to meet 80 per cent of domestic medicine demand and supply 20 per cent of pharmaceutical raw materials.
• 2045: The longer term ambition is a high technology pharmaceutical industry participating in global supply chains.

Pharma shares combine steady demand with growth expectations

Pharmaceutical shares have traditionally been regarded as defensive investments because people continue to need medicines when the economy weakens as well as when it grows. Foreign acquisitions, rising healthcare spending and changes within local companies are now adding a growth argument to that defensive appeal.

Share performance has varied since the beginning of 2026. Binh Dinh Pharmaceutical and Medical Equipment has recorded gains in double digits, supported by expectations of stronger oncology sales and hospital distribution. Oncology is the branch of medicine concerned with cancer treatment.

DHG Pharma and Imexpharm have maintained upward trends, supported by sound finances, established brands and backing from foreign strategic shareholders. Their position illustrates why investors are examining manufacturing quality and corporate development alongside demand for medicines.

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. Valuation and market volatility remain risks for investors, even in businesses with relatively stable demand.

Securities firms expect pharmaceutical sector earnings to grow by about 10 to 12 per cent in 2026. Rising medicine consumption, stronger hospital sales, wider insurance coverage and policies favouring products manufactured domestically are the main expected drivers.

Company results show the scale of the opportunity

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 targets 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 investors seeking income.

Traphaco is targeting 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 strategy for 2026 to 2030 includes expansion through modern retail and hospital distribution, together with technology cooperation with South Korean partners in higher quality medicines.

Results from 2025 show growth at several leading companies. DHG Pharma reported net revenue of VND5.27 trillion, up 7.8 per cent, while pretax profit rose 12.8 per cent to VND1.02 trillion.

Imexpharm recorded revenue of VND2.44 trillion, an increase of 11 per cent, and a record net profit of VND349 billion. Vinapharm reported a 38.5 per cent increase in pretax profit to VND705 billion.

Analysts are focusing on businesses with long operating histories, trusted brands, wide distribution networks and room for foreign ownership. Such companies can develop through better products and operating systems while using commercial networks they already have.

Imported ingredients keep manufacturers exposed

Vietnam's pharmaceutical industry depends on imports for about 80 to 90 per cent of its active pharmaceutical ingredients. These ingredients are the substances that produce a medicine's medical effect. Nearly 90 per cent of the ingredient imports come from China and India.

Manufacturers consequently face risks from 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 competition on price more difficult.

The government aims for local production to meet 80 per cent of domestic medicine demand by 2030. A separate national programme seeks to have local industry supply 20 per cent of pharmaceutical raw materials by that year. The targets address different parts of production: making finished medicines and supplying the materials used to manufacture them.

Vietnam's longer term goal is to build a high technology pharmaceutical industry capable of joining global supply chains by 2045. Specialised projects, including the Thai Binh Bio Pharma Industrial Park, are intended to support chemical production, research and medicine manufacturing.

Meeting these goals will require substantial investment in laboratories, skilled workers, chemical plants and quality control. Foreign capital can help improve finished medicine production, while stronger domestic ingredient supply would reduce manufacturers' exposure to disruptions abroad.

Cold storage investment supports distribution and exports

Vaccines, biologics and other temperature sensitive medicines need storage and transport within a narrow temperature range. Reliable cold storage and refrigerated transport are therefore part of the production and distribution system, particularly for companies seeking export customers.

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 develop facilities with automated storage, digital tracking and temperature monitoring in real time. These systems can help keep medicines within their required storage conditions as they move from factories to customers.

Long An, Dong Nai and Binh Duong form a major logistics cluster in southern Vietnam 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.

Lotte Global Logistics has begun developing a cold chain centre worth US$34 million in Dong Nai. 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. Companies with foreign investment accounted for about US$230 million of the total. Exports remain modest compared with domestic consumption, but they signal growing confidence in medicines produced locally.

What will shape the next investment cycle?

Research from SHS describes 2025 to 2030 as a new growth cycle in which Vietnam moves from conventional generic production toward international quality standards and medicines with greater value. Viet Dragon Securities expects more acquisitions involving companies with strong hospital channels, modern factories and sufficient 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. Companies with foreign investment could control 40 to 50 per cent of the domestic medicine market by 2030. These are forecasts, dependent on future regulations, valuations and local companies' ability to upgrade.

Investors are likely to focus on manufacturers combining EU GMP or Japan GMP certification, reliable finances, hospital access and research plans. Companies heavily dependent on products with low profit margins, or lacking the capital to modernise, may face greater pressure as international groups raise the standard of competition.

Vietnam's pharmaceutical expansion is a story of rising consumption and industrial change. An ageing population and wider insurance coverage are increasing demand, while foreign shareholders are helping local producers improve manufacturing, governance and market access. Turning that investment into stronger domestic research and raw material capacity is the central challenge.

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.
• Only an estimated 20 to 30 of Vietnam's roughly 288 pharmaceutical factories meet stringent EU GMP standards.
• Sector earnings are forecast to grow by about 10 to 12 per cent in 2026.
• Vietnam imports about 80 to 90 per cent of its active pharmaceutical ingredients.
• Cold chain investment is improving distribution for temperature sensitive medicines and supporting export ambitions.
• Future growth depends on research, advanced manufacturing and stronger domestic production of pharmaceutical raw materials.