Vietnam’s pharmaceutical sector is at a crossroads, as the country undertakes its most significant legislative reform in two decades with the introduction of a new Pharmaceutical Law. Aimed at aligning with Vietnam’s long-term healthcare strategy, the law brings both opportunities and serious challenges. As key provisions are being drafted and debated, concerns are mounting across the industry – particularly among high-quality local generic drug manufacturers – about the feasibility of implementation and the potential disruption to the supply of essential medicines.

This pivotal moment builds on legislative developments that began with the first Pharmaceutical Law, passed by the National Assembly in 2005 and has since undergone two major amendments, coming into effect in 2017 and now again with further provisions set to take effect from 2025. This update reflects the growing importance of the pharmaceutical sector in national development strategies.

According to the Prime Minister’s Decision No. 1165/QĐ-TTg (2023), which approves the National Strategy for the Development of Vietnam’s Pharmaceutical Industry through 2030 with a vision to 2045, the government aims to develop the country’s pharmaceutical sector to be on par with advanced nations in the region, ensuring public access to medicines at reasonable costs. The top priority and strategic goal is to achieve pharmaceutical self-reliance by promoting the development and manufacturing of high-quality, affordable medicines locally.

Obstacles From The Maximum Price Difference Policy

Among the most debated aspects of the draft decree guiding the new Pharmaceutical Law is the proposed maximum price difference policy—which sets a cap on the difference between the wholesale price and the winning bid price in public procurement.

According to Mr. Michal Wieczorek, General Director of Davipharm, a member of Adamed Group, this policy could severely limit the development and production of high-quality medicines by domestic manufacturers, especially those adhering to stringent EU-GMP production standards.

Photo: Davipharm’s HP Zone meets EU-GMP standards to produce high-quality products including oncology drugs.

Public data from the National Bidding Network System indicates a consistent decline in winning bid prices since 2017 to date. In many cases, the prices have dropped to alarming levels, leading to a decline in the number of manufacturers participating in tenders.

One contributing factor is the trend of non-profit bidding strategies where companies offer ultra-low prices to secure market share. While these bids may cover production and logistics, they often fail to account for operational expenses, marketing, administrative costs, and market volatility such as rising raw material prices or unpredictable logistics costs, not mentioning high costs of drugs development, localization of the production (tech transfer) or certifications to the stringent quality standards (like EU-GMP). For many, the wholesale market is used to compensate for the unsustainable tender pricing.

Risks to Domestic Production and Market Sustainability

If enforced, this policy might discourage domestic pharmaceutical manufacturers from improving production capacity and products quality due to high investment costs. It also impacts high-quality imported generic drugs, leading to the situation where there will be only very costly on-patent medicines or low-price and low-quality products from countries  which are famous for poor quality medicines – ultimately pushing locally produced medicines out of the market.

Additionally, it may hurt Vietnam’s export potential. According to the data reported by the Ministry of Health[1], in 2024, Vietnam’s pharmaceutical imports surpassed USD 3.8 billion, accounting for 75% of the total winning bid value in hospitals. In stark contrast, pharmaceutical exports amounted to only USD 280 million, highlighting a massive trade imbalance. With the proposed maximum price difference policy, the export and domestic production of high-quality medicines is at risk of being completely eliminated, significantly reducing the competitiveness of Vietnamese pharmaceutical companies in the international market and hindering Vietnam’s ability to improve its pharmaceutical trade balance.

The Need for Balanced Regulation

To foster the sustainable development of the pharmaceutical sector in line with national strategies, the Ministry of Health should consider creating more favorable conditions for domestic EU-GMP-certified manufacturers and actively listen to feedback from healthcare units, pharmaceutical companies, and industry associations in regulatory consultations. This will help ensure appropriate drug pricing management that considers cost structure factors, product types (such as specific drugs, new medicines, and first generics), as well as classification based on supplier characteristics—distinguishing between local and imported sources.

The new Pharmaceutical Law presents an important opportunity for Vietnam to strengthen its pharmaceutical industry. To truly realize its pharmaceutical self-sufficiency ambitions, Vietnam must embrace pragmatic, evidence-based, and inclusive policymaking—one that enables domestic industry to grow and compete globally.

Prime Minister Pham Minh Chinh, Minister of Health Dao Hong Lan, and other Ministers met with representatives of Adamed Group in Warsaw in January 2025. Photo by Government Portal.

Adamed and Davipharm – a member of Adamed Group – fully support the Vietnamese government’s long-term vision for healthcare and pharmaceutical development. Through active engagement, investment, and knowledge-sharing, the company is committed to playing a meaningful role in Vietnam’s journey toward achieving its healthcare and economic goals. Drawing on Poland’s successful experience, where a working group model has brought together business leaders, key organizations, and experts to co-create solutions that strengthen economic competitiveness, Adamed has expressed openness to supporting the establishment of a similar advisory group in Vietnam. If considered beneficial by the government, such a platform could foster stronger public-private cooperation, facilitate the exchange of international best practices and scientific expertise, and support the continued development of Vietnam’s healthcare system and regulatory framework.

Read the article on Vietnam Times for more information.

[1] https://vneconomy.vn/bo-y-te-viet-nam-nhap-khau-hon-3-8-ty-usd-thuoc-trong-nam-2024.htm