Vietnam is often remembered as a country torn apart by years of war, occupation and economic decline. Many believe it will take take years of rebuilding for it to match up to the strength of Asia's other countries.

However, thanks to the concerted efforts of its government, Vietnam is finally seeing a silver lining behind the dark cloud. The 'land of the ascending dragon' is hailed as one of the best performing developing economies with an average annual growth of 7.5%. As the country transforms itself to a modern and globalized economy, there will be opportunities abound for both local and foreign investments.

A promising market

A twist of fate

Perhaps the greatest change of event for Vietnam is its entry into the World Trade Organisation (WTO) in November 2006. Its WTO status has spurred the development of the pharmaceutical industry as the government sets standards in line with WTO's requirements, and begins to address the problems related to corruption, IP and counterfeit drugs.

On the go...

Changing environment

As Vietnam opens its doors to the world, it has attracted the attention of foreign companies form countries such as France, with incentives such as low import duties, which are less than 5%, and drug tariffs that are likely to average at 2.5 % within 5 years. Even though the government has taken a strong stance against advertising, firms can market their prescriptive drugs through a number of ways including representatives, and attending product conferences and health seminars.

Jamie Davies, Analyst and Head of Pharmaceuticals of BMI (UK) points out that early entry is the key to gaining market advantage. "The key strategy is to be the first mover into a subsector that will raise brand awareness. Eventually, a well-positioned product will be very hard to displace because consumers are used to it and reluctant to try rival products."

Riding the local wave

Although policies are favourable to foreign players, it is the weak domestic market that opens doors because the country is still highly dependent on foreign support as 90% of its APIs are imported.

The domestic market is generally weak with local players making up 40% of the total medicines market. There are only 180 producers and many of them have poor and outdated facilities. To make matters worse, only a third are GMP compliant and the position of the remaining two-thirds will deteriorate when GMP requirements come into force in 2010.