IMPACT OF EVFTA ON VIETNAM’S PHARMACEUTICAL MARKET

After more than 5 years of implementation, the Vietnam – EU Free Trade Agreement (EVFTA) has had a strong impact on the Vietnamese economy in general and the pharmaceutical market in particular.

EVFTA takes effect from August 1, 2020. The emergence of EVFTA increases the competitiveness between Vietnamese pharmaceutical enterprises and enterprises in the same industry from the EU. EVFTA commits to opening up, allowing EU enterprises to establish facilities in Vietnam, not only to conduct clinical research/pharmaceutical testing, but also to import licensed pharmaceuticals. They are allowed to build warehouses to store imported pharmaceuticals and, although they are not allowed to directly distribute and supply pharmaceutical goods to users, they are allowed to resell pharmaceuticals to distributors or wholesalers licensed to distribute and circulate pharmaceuticals in Vietnam.

Domestic pharmaceutical manufacturing/distribution enterprises are under pressure to compete with EU enterprises in the pharmaceutical market, especially for proprietary drugs and specialized drugs that are not yet produced in Vietnam, because EVFTA almost eliminates all tariff barriers on pharmaceuticals, helping pharmaceuticals from the EU to be imported into Vietnam more directly and conveniently.

Vietnam also committed to strengthening intellectual property protection for pharmaceuticals through commitments to compensate for delays and commitments to protect proprietary data, making it more difficult for pharmaceuticals to become generic and reduce prices. However, this is also an advantage for Vietnamese enterprises to access high-quality raw materials at competitive prices and for consumers to have the opportunity to use strong pharmaceuticals from the EU.

The challenges from EVFTA commitments are also opportunities for Vietnamese pharmaceutical enterprises to seek development directions and increase their advantages, typically developing EU-GMP standard manufacturing plants among reputable domestic pharmaceutical enterprises. Products manufactured according to EU-GMP standards or equivalent are of high quality, helping to enhance the brand value of pharmaceutical enterprises, increase domestic consumption, and contribute to increasing the rate of Vietnamese pharmaceutical exports to the EU market. Currently, 25/240 pharmaceutical factories in Vietnam (accounting for 10.4%) have achieved one of the high GMP standards (EU-GMP, PIC/S-GMP, Japan-GMP, US FDA).

In addition, a number of Vietnamese pharmaceutical enterprises have been shifting their focus to developing domestic distribution channels to expand the supply of reputable pharmaceuticals, ensuring quality, timeliness, and convenience for patients, as well as strengthening business cooperation, supporting distribution and supply of goods between Vietnamese pharmaceutical enterprises and EU pharmaceutical enterprises (including FDI and parent companies in the EU) for the Vietnamese pharmaceutical market.

For EU pharmaceutical enterprises, in recent times, in addition to focusing on the pharmaceutical export segment to the Vietnamese market, they have also increased investment activities through establishing branches, expanding production plants and finding distribution partners, combined with promoting R&D of high-quality, safe, effective and greener pharmaceuticals, suitable for the pharmaceutical consumer market in Vietnam.

Since the EVFTA took effect, in order to institutionalize and realize its commitments, Vietnam has been adjusting many legal documents necessary for the development of the pharmaceutical industry, such as issuing documents to remove obstacles in the field of drug registration: Circular No. 08/2022/TT-BYT regulating the registration of drugs and pharmaceutical ingredients dated September 5, 2022, replacing Circular No. 32/2018/TT-BYT; Circular No. 55/2024/TT-BYT dated December 31, 2024 amending and supplementing a number of articles on the extension of registration certificates for drug circulation and pharmaceutical ingredients in Circular No. 08/2022/TT-BYT, in order to simplify the required documents for the dossier for the extension of registration certificates for drug circulation and pharmaceutical ingredients, etc.

In order to adjust the highest legal framework, in order to create a practical and effective legal corridor for the pharmaceutical sector, the National Assembly passed the Law amending and supplementing a number of articles of the Pharmacy Law No. 44/2024/QH15, with a number of new points such as: creating a legal corridor for new forms and business methods on the basis of organizing pharmacy chains. Regulations on trading drugs and pharmaceutical ingredients by e-commerce.

Specify the rights and responsibilities of foreign-invested pharmaceutical businesses in the Law to ensure publicity and transparency in state management…

In 2025, the pharmaceutical industry is assessed to have many opportunities and challenges. Regarding opportunities, Vietnamese pharmaceutical enterprises need to take advantage of the removal of tariff barriers to increase the export of high-quality pharmaceuticals to the EU market; enhance technology transfer and research cooperation, and expand production capacity in Vietnam.

Regarding challenges, in addition to fierce competition from large pharmaceutical companies present in Vietnam and the increasingly high standards of quality, safety and intellectual property rights from the EU, pharmaceutical enterprises will be affected by the arrangement and streamlining of the Government apparatus, leading to adjustments to corresponding policies and legal documents, so there will be a time lag in the implementation and enforcement of new policies.

Source: Báo Đầu Tư

About STELLAPHARM

Stellapharm J.V. Co., Ltd. is currently known as one of leading generics pharmaceutical companies and strong manufacturers in Vietnam. Established in 2000, Stellapharm was built on the foundation of a manufacturing factory in Vietnam and formed a joint venture with a partner from Germany. We focus on both prescription drugs and non-prescription especially in cardiovascular diseases, anti-diabetics drugs, etc. Products of Stellapharm are now used by millions of patients in more than 50 countries worldwide.

The company is globally recognized for its quality through our facilities have been audited and approved by stringent authority like EMA, PMDA, Taiwan GMP, local WHO and others.

Additional information for this article: Stellapharm J.V. Co., Ltd. – Branch 1
A: 40 Tu Do Avenue, Vietnam – Singapore Industrial Park, An Phu Ward, Thuan An City, Binh Duong Province, Vietnam
T: +84 274 376 7470 | F: +84 274 376 7469 | E: info@stellapharm.com | W: www.stellapharm.com