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Post-Covid-19: The reversal of Vietnamese pharmaceutical production against the M&A wave

Vietnam is one of the fastest-growing economies in Southeast Asia and its pharmaceutical industry is no exception. With a rapidly growing population and high demand for quality healthcare, the pharmaceutical sector in Vietnam has and continues to attract significant investment from both domestic and foreign companies. This growth is due to a number of factors, including the country's rapidly growing middle class, the demand for healthcare services, and the government's efforts to improve regulations and infrastructure in the sector, especially after the Covid-19 pandemic. According to Vietnam Report, the healthcare market in Vietnam reached a value of USD 16.2 billion in 2020, accounting for 6.0% of GDP. Total healthcare expenditure increased from USD 16.1 billion in 2017 to over USD 20 billion in 2021 and is projected to reach USD 23.3 billion in 2025 and USD 33.8 billion in 2030, with a CAGR of 7.6% (2020-2030).

In terms of the pharmaceutical production segment in Vietnam, the most notable development in recent years has been the acquisition of local pharmaceutical manufacturers by foreign drug companies. The Vietnamese pharmaceutical market is one of the most promising and attractive investment pieces in the region. Along with rapid growth, Vietnam's production capacity can only meet 53% of the country's pharmaceutical demand. According to the General Statistics Office, in 2021, Vietnam spent nearly USD 4 billion importing pharmaceuticals.

It can be seen that foreign "big players" are attracted to the Vietnamese market due to the potential for growth and expansion within the country and they are seeking to penetrate the market through mergers and acquisitions (M&A) of local companies. This allows them to quickly establish a presence in the market, access local distribution networks, and exploit the expertise of local companies.

On the other hand, local companies such as Dược Hậu Giang, Imexpharm, and Pymepharco... can also access technology, expertise, and new capital; contributing to improving the competitiveness of companies, expanding product services, and entering new markets.

In a context where many businesses are struggling due to interest rate pressures and capital difficulties, pharmaceutical companies reported record profits in 2022 due to the large demand for post-Covid-19 consumption. One of the reasons that companies are reporting strong growth in profits is due to the high demand for medicines in 2022, especially for antiviral products and disease prevention products, as well as strengthening the immune system after the COVID-19 pandemic.

However, alongside the big names that shone in the social distancing era, there are also many small and medium-sized pharmaceutical producers that were directly impacted by the pandemic and suffered a decline in business results.

Sanofi Vietnam

Sanofi is a leading global pharmaceutical company from France that is involved in the research, development, production, and commercialization of healthcare products and services. It has been present in Vietnam for over 60 years and was the first multinational pharmaceutical company in Vietnam to be qualified to import drugs.

In Vietnam, Sanofi has three main business areas: prescription drugs, vaccines, and consumer healthcare products (CHC). The company produces both generic drugs and patented drugs in Vietnam, and also provides contract manufacturing services for other pharmaceutical companies, both for patented and generic drugs.

Sanofi has three factories in Vietnam: Sanofi-Synthelabo, Sanofi-Aventis, and ACE Sanofi. The ACE Sanofi factory has an investment capital of USD 75 million and is the largest investment project of Sanofi in Vietnam.

Sanofi's revenue in Vietnam has been growing rapidly in recent years, with its 2020 and 2021 revenue reaching nearly VND 7,000 billion, nearly double the revenue achieved in 2019. In 2021, while Sanofi-Synthelabo's revenue decreased three times compared to the previous year, Sanofi-Aventis and ACE Sanofi continuously recorded record-breaking growth, contributing to bringing Sanofi Vietnam's revenue to nearly VND 7,000 billion.

Sanofi Vietnam recorded cumulative after-tax profits in 2020 and 2021 of over VND 640 billion and over VND 900 billion, respectively, an increase of over 60% and over 130% compared to 2019. Previously, ACE Sanofi recorded losses for three years before the factory began operations and accelerated at the end of 2018.

Sanofi Vietnam is replacing the Sanofi Indonesia facility as the main research and production center in the pharmaceutical supply chain for the region and globally. Sanofi is developing in a green direction, reducing emissions, which is in line with global trends and the targets and strategic direction that Vietnam is aiming for in the National Green Growth Strategy for the 2021-2030 period, to minimize negative impacts on the environment, improve the quality of growth, develop a green economy, sustainable, and able to withstand the impacts of climate change.

Bayer Vietnam

Bayer is a German multinational Life Science and Pharmaceutical Company. Bayer focuses on manufacturing and distributing prescription drugs, especially in the fields of cardiovascular and women's health care, contrast agents in diagnostic imaging, and specialty drugs in oncology, hematology, and ophthalmology.

Bayer Vietnam Co., Ltd., a part of Bayer Group, has been operating in Vietnam since 1994, operating mainly in the fields of pharmaceuticals, consumer health care, crop science, and veterinary medicine. In the domestic market, Bayer Vietnam left the most impression on the field of cardiovascular, and women's health care, ... along with famous products such as Elevit, and Becozyme...

In addition, the company also invested in a Veterinary and Fisheries factory in Binh Duong, but in 2020 it completely separated from this branch. At the end of 2020, Bayer completed the sale of the Veterinary-Fisheries branch to Elanco, accordingly, the divestment of the Veterinary–Fisheries segment is the largest transaction in a series of Bayer portfolio restructuring activities, which kicked off in November 2018.

In the period of 2019 - 2021, Bayer Vietnam's revenue still achieved impressive numbers. Specifically, in 2019, Bayer brought in revenue of more than VND 4,500 billion this number increased to more than VND 4,600 billion by the end of 2021 and will continue to grow in 2022. However, in 2021, due to the impact of the epidemic along with the restructuring of the investment portfolio, the company's revenue decreased to nearly VND 3,300 billion.

It can be seen that the revenue structure of Bayer Vietnam still contributes mainly from the field of Crop Science with the main products of plant protection products and seeds. After the pandemic, the contribution of the pharmaceutical segment became important as the people's demand for nutrition and health care recovered. In 2021, the company also recorded a profit after tax of nearly VND 300 billion. Previously, in 2020, the company's profit after tax increased by more than VND 3,000 billion compared to 2019 due to the sale of the Veterinary-Fisheries branch being completed.

In the future, Bayer Vietnam will continue to invest in drug research for chronic diseases; increase resources for the frontline to carry out education activities to raise awareness, detect and treat disease conditions early; Leverage the power of digital to promote more efficient and convenient access to medical solutions for patients and doctors.

DHG Pharma

In September 2004, DHG Pharma was officially established with an initial charter capital of VND 80 billion. As one of the enterprises listed on the stock exchange early, DHG Pharma has created impressive business achievements and results.

During its operation, DHG Pharma has always set the goal of maintaining its core product, along with developing new drug products. Antibiotics, pain relievers, and fever reducers are still the core products that contribute the largest proportion of revenue for the company, accounting for over 50% of total revenue.

From 2016 to now, the revenue and profit of DHG Pharma have grown steadily. Pioneering in expanding the foreign room, DHG Pharma (DHG) has been approved to expand its overseas ownership to 100% and officially became a subsidiary of Taisho Pharmaceutical in 2019 after Japanese shareholders held more than 51% of the shares. The company's revenue in the period of 2019 - 2022 in general increased rapidly, despite a slight "shortage" in 2020 with the figure of VND 3,755 billion, down 4% compared to 2019. Accordingly, in 2021 and 2022, the company's revenue was VND 4,003 billion and VND 4,676 billion, respectively, exceeding the growth rate in 2019 - the year the Covid pandemic began.

DHG Pharma continuously recorded a record-breaking profit after tax and increased rapidly year by year. In 2020 and 2021, the business reported a profit of VND 738 billion and VND 776 billion, respectively, both double-digit growth compared to 2019, an increase of 17% and 23% respectively. Not stopping there, 2022 continues to be a successful year for DHG Pharma when net revenue and profit after tax hit VND 4,676 billion and VND 988 billion respectively.

DHG Pharma continuously recorded a record-breaking profit after tax and increased rapidly year by year. In 2020 and 2021, the business reported a profit of VND 738 billion and VND 776 billion, respectively, both double-digit growth compared to 2019, an increase of 17% and 23% respectively. Not stopping there, 2022 continues to be a successful year for DHG Pharma when net revenue and profit after tax hit VND 4,676 billion and VND 988 billion respectively.

The company also said that the increase in revenue and profit of the company is because the company focuses on key products, especially nutritional products and related products to treat Covid such as Hapacol, Klamentil, Medlon, and Bocalex…. On the other hand, the company closely organizes the distribution system and connects with customers well, and at the same time, good management of receipts and inventory helps to improve cash flow and increase efficiency for the company.


Traphaco Joint Stock Company, formerly the Drug Production Team of the Railway Medical Company, was established on November 28th, 1972. After half a century, Traphaco has grown spectacularly to become one of the prominent enterprises in the field of pharmaceutical production, especially oriental medicinal products in Vietnam. As of the second half of 2022, foreign shareholders hold about 45% of shares in this company, of which the two largest holdings are Magbi Fund Limited (25%) and Super Delta Pte Ltd (15.12%).

Traphaco's revenue in the period of 2019 - 2022 has grown steadily over the years, according to the chart, Traphaco is the enterprise with the most "uniform" double-digit growth among the 10 pharmaceutical manufacturing enterprises in this period. Specifically, in 2020 and 2021, the enterprise's net revenue will reach VND 1,909 billion and VND 2,161 billion, respectively, the growth rate is nearly 12% and 13% compared to the previous year, respectively. From 2021, the double wave strategy of Oriental medicine - Western medicine that Traphaco embarked on strongly implemented has brought brighter results. In 2022, continuing the growth momentum from previous years, Traphaco's revenue reached more than VND 2,300 billion, up 17% compared to 2021, and profit before tax reached about VND 400 billion.

The strategy of "Maintaining the No. 1 position in Oriental Medicine, focusing on promoting non-Traditional Medicine" that Traphaco implements is to maintain the position of Oriental Medicine thanks to key products such as Active blood nourishing brain, Boganic; Besides traditional medicine, the company combines technology transfer from its partner Daewoong (Korea) and overcomes limitations due to unfavorable effects from the Covid-19 pandemic. Currently, the company has received delivery of 12 new products and strengthened comprehensive cooperation with Daewoong.

Traphaco's profit after tax shows that the strategies the company has applied have been effective. Specifically, the company recorded a profit of VND 217 billion and CND 264 billion in 2020 and 2021, with growth rates of 28% and 22% over the previous year. Profit increased steadily partly thanks to the company's initiative in sourcing, stabilizing selling prices, and innovating the direct selling system through pharmacies (OTC), in parallel, the company also developed the market, improve the sales management software system and optimize the transportation system to promptly meet the demand for goods during the epidemic.

Traphaco clearly shows its ambition to protect its growth capacity by implementing effective strategies. The products TRA received from Daewoong in the first phase of technology transfer from 2021 have been deployed to the market and have had positive and positive signals. Here, high-quality Western medicine products received from Daewoong and distributed to the market in 2023 - 2024 are key product groups to meet increasing demands such as Cardiovascular, Blood Pressure, Blood Fat, Diabetes …


Imexpharm Company was developed from its predecessor Dong Thap Pharmaceutical Union Enterprise in 1983. On July 25th, 2001, the Company officially transformed its business form from a state-owned enterprise to a joint-stock company and was renamed Imexpharm Pharmaceutical Joint Stock Company under the decision of the Government.

With the appearance of foreign giants occupying most of the pharmaceutical manufacturing market, Vietnam has up to 8/10 enterprises that meet EU-GMP standards (good manufacturing practices according to European standards) are FDI enterprises. Rare among them is Imexpharm - a domestically listed company, according to the website GMPC Vietnam announced on September 13th, 2022. As of the end of December 2022, Imexpharm's shareholder structure includes SK Investment Vina III Pte.Ltd (47.67%), Vietnam Pharmaceutical Corporation (22.03%), Binh Minh Kim Investment Joint Stock Company 9.74%, KBA Investment Joint Stock Company 7.37%, and the rest are other shareholders.

Imexpharm's net revenue in the period of 2019 - 2021 is not positive as the results recorded in the financial statements decrease year by year. In 2019, the net revenue of this business was VND 1,402 billion, only VND 1,369 billion and VND 1,266 billion in 2020 and 2021, respectively "evaporating" 2.3% and 9.7% compared to 2019. According to IMP, revenue results gradually decreased due to the impact of the epidemic, business activities were stalled while costs increased and the supply of imported materials was interrupted.

Imexpharm before the pandemic was an enterprise that operated mainly on the ETC channel (the channel for selling drugs through hospitals), so the business results of the business during this period also faced many fluctuations. The profit after tax report also shows the "up and down" the company has to face when the profit increases to VND 209 billion in 2020, declines in 2021, and then increases to VND 234 billion in 2022.

Only in 2022, when the regulations on social distancing are relaxed, will Imexpharm recover and record growth again. Accumulated for the whole year, Imexpharm's net revenue reached VND 1,643 billion, and profit after tax of VND 234 billion, up 30% and 24% respectively compared to 2021 and set record results. This result is due to the recovery of people's demand after the epidemic, plus market expansion activities that have helped the company report profit growth after tax.


Bidiphar was established in 1980 and was originally the Pharmaceutical Factory II Nghia Binh, under the management of the Nghia Binh Medical Department. Bidiphar specializes in the production, sale, and distribution of medicines, herbal products, medical equipment, and chemicals. Over the course of more than 40 years of building and development, Bidiphar has been recognized for its innovative plans in researching and applying new technologies in management, production, and business.

The company boasts a diverse product portfolio with several products that meet the needs of customers during and after the Covid pandemic, such as antibiotics (Augidil, Bicebid, Tazopelin), fever-reducing drugs (Biragan), vitamins (Kingdomin), and oral rehydration solutions (Oresol). In addition, Bidiphar's strength lies in its longstanding products such as Bocartin for cancer treatment, Waisan for muscle relaxation, and Phospha Gaspain for antacids.

During the period of 2019-2022, Bidiphar's production and business overall had many bright spots. In 2021, the company's OTC sales coverage increased by 2 times compared to 2020, reaching 15,000 drugstores. As a result, the company exceeded its revenue target (VND 500 billion) on the OTC channel, reaching VND 570 billion, an increase of 130% compared to 2020, contributing to the company's overall revenue of over VND 1,500 billion in both 2021 and 2022, an increase of more than 23% compared to 2019. In 2021, in response to the Covid pandemic, Bidiphar not only invested in products but also prioritized health equipment, such as face masks and hand sanitizers. 2021 is also the year that the company's management makes a breakthrough in the OTC channel by expanding coverage points, increasing product presence at retail outlets,

build a professional distribution system in accordance with international standards.

In 2020, businesses have a slight decrease in revenue, specifically a "shortage" of VND 5 billion compared to 2019. The reason for this is an overview of the context in 2020, the company is still facing many difficulties, and challenges related to epidemics, market policies, and competition is increasingly fierce...

In addition, the 1-year delay in putting the cancer drug factory project into operation compared to the plan led to financial pressure on investment loans. Due to restrictions on the movement of foreign experts to Vietnam, the installation and appraisal of the operating system were extended to the first quarter of 2021, before that was expected in March 2020. The one-year delay that prevented the factory from operating production and recording revenue also greatly affected the company's growth plan.

Bidiphar's profit after tax is also growing steadily over the years. Accordingly, the company reported a profit of VND 189 billion and VND 244 billion in 2021 and 2022, respectively, recording double-digit growth compared to 2019, namely an increase of 33% and 72%.

With a vision in 2026, Bidiphar sets the goal of building an OTC channel coverage of 30,000 pharmacies, and at the same time, building a modern warehouse system for three North - Central - South regions. Thus, in the OTC channel, Bidiphar expands its coverage in retailers instead of focusing only on large drugstores; on the ETC channel, the company aims to upgrade 4 production plants to meet GMP EU standards (good manufacturing practices according to European standards).


The company was formerly known as Phu Yen Pharmaceutical and Medical Supplies Company established on July 23rd, 1989. Over 30 years, from a local pharmaceutical company specializing in the distribution of medical supplies and equipment, Pymepharco is now one of the major pharmaceutical manufacturers in Vietnam. Pymepharco has a system of pharmaceutical factories that meet EU-GMP standards, more than 19 branches nationwide, representative offices, and specialized stores.

At the end of 2021, Pymepharco with stock code PME announced to delist on the stock exchange. Before delisting, PME was considered the second most valuable stock on the market, just behind the market price of Hau Giang Pharmaceutical (DHG). The market value of PME's capital is more than VND 6,158 billion. This move took place after the company "sold itself" to STADA Service Holding B.V (Germany) with an ownership of more than 99% of the capital. Accordingly, Pymepharco no longer meets the conditions of a public company when the German partner controls 99.5% of shares in Pymepharco.

Pymepharco's net revenue in 2019 reached VND 1,847 billion, and the company's revenue continued to increase by nearly 5% in 2020, touching VND 1,934 billion.

Also in 2019, Pymepharco brought an after-tax profit of VND 321 billion, the second highest in the market, and a slight decrease in 2020, specifically a slight decrease of 1.2% with a profit of VND 317 billion.

In August 2022, Pymepharco's reputation has been affected due to its violation of administrative regulations and failure to carry out the necessary procedures for change of registration and pre-market approval for major changes that require approval with Ciprofloxacin STADA 500 mg (registration number VD-34964-21). The company must pay a fine of VND 100 million.

Domesco Medical Import-Export Joint Stock Company

Domesco Medical Import-Export Joint Stock Company was established on May 19th, 1989, a company specializing in research, development, production, marketing, and sales of pharmaceuticals, drugs derived from Medicinal materials, functional foods, purified drinking water, and herbal drinks... Domesco company operates in the field of import and export of drugs, medicinal ingredients, food-functional foods, medical supplies, and medical equipment for medical examination and treatment for the entire population.

In 2011, CFR International SPA, a pharmaceutical group from Chile, bought shares very early and owned nearly 45% of Domesco shares. After Abbott Laboratories acquired CFR, the US-based multinational medical services and healthcare equipment group continued to increase its ownership in Domesco,

currently controls over 51% of the shares, making the Vietnamese company an affiliated member.

Like a number of other pharmaceutical manufacturing enterprises, Domesco's revenue picture in the period of 2019 - 2022 generally has many bright spots. In 2022, the company's revenue recorded a record of VND 1,593 billion, up 8.5% compared to 2019.

Previously, in 2020, the overall influence of the industry under the pandemic, Domesco also recorded poor business results with net revenue of VND 1,452 billion, down 1.1% compared to 2019.

From 2019 onwards, Domesco's after-tax profit results were not satisfactory, the company continuously "evaporated" part of its profits. The business situation continued to decline and only prospered in 2022, however, with a profit of VND 200 billion, the company recovered by 86% compared to 2019.

Explaining the reason for the decrease in profit, the company said that the high cost of capital was due to the impact of Covid-19 on the global supply chain, so the price of raw materials and packaging increased over the same period. During the period, the company maintained the supply of drugs at the winning bid price in 2020 for hospitals, so when the cost of goods increased, it greatly affected the profit margin.

Regarding the development plan for the coming years, on January 6th, 2023,

Domesco and the consortium of BV Pharma Company and Pomax Joint Stock Company conducted a signing ceremony of strategic cooperation in the production and distribution of medicinal products. This cooperation is targeted by the parties to bring products of good quality but still ensure a suitable price; at the same time, helping Vietnamese consumers have more choices about healthcare products.

OPC Pharmaceutical Joint Stock Company

OPC Pharmaceutical Joint Stock Company, formerly known as TW 26 Pharmaceutical Enterprise, was established in 1977. In February 2002, Central Pharmaceutical Enterprise 26 – OPC was transformed into OPC Pharmaceutical JSC. OPC's main business areas include growing and processing medicinal herbs; manufacturing and trading pharmaceuticals, materials, machinery, and equipment...

OPC has made its mark in a number of fields of activity in the industry such as applying high science and technology in research, information technology in management, and applying GMP-WHO standards in the production of traditional medicines. Currently, OPC is one of the largest traditional medicine manufacturers in Vietnam.

At OPC, business results grew to double digits when the company's net revenue in 2021 and 2022 was VND 1,124 billion and VND 1,172 billion, up 16% and 4% compared to the previous year. In 2020, the company's revenue decreased by VND 965 billion, down 2.4% compared to 2019. The decline of OPC comes from the pressure of expense items, typically the increase in corporate management expenses, which has eroded the company's revenue results.

In 2022, OPC also recorded the highest profit milestone ever with a net profit of VND 142 billion, up 15% over the same period. Thus, by the end of 2022, OPC has completed and exceeded 2% of the revenue plan and exceeded 3% of the profit plan. In the period of 2019 -2022, OPC's profit grows steadily year by year thanks to the increase in revenue and cost reduction. Specifically, the company reported a profit of VND 103 billion and VND 123 billion in 2020 and 2021, both increasing by nearly 2% over the same period. OPC has invested in and owned many medicinal growing areas to help the company standardize products and preserve and develop medicinal sources, creating livelihoods for many farmers.

Ha Tay Pharmaceutical Joint Stock Company

Ha Tay Pharmaceutical Joint Stock Company (DHT), formerly known as Ha Tay Pharmaceutical Enterprise, was established in 1965. In 2001, the company transformed into a joint stock company specializing in the production and trading of pharmaceuticals, pharmaceuticals, cosmetics, nutritional foods, and medical equipment. The company has a distribution system in most of the northern provinces. At the end of 2020, Ha Tay Pharmaceutical has a major strategic shareholder, ASKA Pharmaceutical Ltd - Japan owns 24.9% of the shares, equivalent to more than 5.28 million shares.

In the whole year of 2022, the business earned VND 1,837 billion in net revenue, up 14% compared to the whole year of 2021. Net profit reached VND 99 billion, up 39%. With the newly achieved results, the business has exceeded 22.4% of the revenue target and nearly 60% of the profit target.

Like Imexpharm, Ha Tay Pharmaceutical was previously also heavily affected by the Covid pandemic, which is reflected in the decrease in the company's revenue and profit in the period of 2019 - 2021.

The company's net revenue in 2020 and 2021 is VND 2,006 billion and VND 1,609 billion, respectively, down 2% and 21% compared to 2019. The company also encountered a number of "controversies" about the explanation with unclear shareholders, being investigated for using the allocated land located at the intersection of Tram Troi town (Hoai Duc, Hanoi) for improper purposes. In February 2022, Ha Tay Pharmaceutical was asked to recall a batch of Levosum drugs that this company imported because it did not meet quality standards in terms of content uniformity and quantification.

Currently, the total area of the company's drug factory is 17,000 m2, and the total area of the functional food factory is approximately 2,000 m2, including 5 workshops producing a variety of dosage forms, and independent, self-contained drug production lines. The factory's machinery and equipment system is regularly upgraded, and the total investment value for the factory is up to VND 200 billion.

Overview and trends of the pharmaceutical industry in Vietnam

According to market research firm IBM, the scale of Vietnam's pharmaceutical industry could reach USD 16.1 billion by 2026. The industry has a growth rate of 2%, achieving a compound annual growth rate of 6% in the period 2018-2020. Overall, the trend in the Vietnamese pharmaceutical manufacturing industry is positive with strong growth expected to continue in the coming years.

In the short term, it will be difficult for Vietnam's pharmaceutical industry to have a breakthrough because raw materials for production depend on 90% of imports, and China and India account for more than 80% of the supply. Unpredictable developments of COVID-19 will still have a great impact on imports, causing supply to continue to be a big problem for businesses.

In the long term, the pharmaceutical industry has a lot of growth potential for both manufacturing companies and retail groups due to Vietnam's large population size and rapidly aging population.

However, the industry still faces a number of challenges, including limited access to technology and expertise and relatively weak infrastructure, especially in rural areas.

One of the biggest challenges is access to limited capital, which makes it difficult for pharmaceutical companies to invest in research and development, limiting the number of drugs and the development of new treatments.

Another challenge is competition from cheap generic drugs. Many people in the country cannot afford expensive brand-name drugs, so they often choose cheaper alternatives. This can make it difficult for pharmaceutical companies to maintain high margins and limit their ability to invest in research and development.

Besides these challenges, the issue of intellectual property protection in Vietnam is also a matter of concern.

Overall, the wave of M&A in the pharmaceutical manufacturing industry in Vietnam is expected to continue to grow, as both domestic and foreign firms seek to capitalize on growth opportunities in the market. Most of the leading pharmaceutical manufacturers in Vietnam have been in the "sight" of foreign investors. It is important to note that these transactions can also bring challenges, such as cultural differences, integration issues, and regulatory barriers.

Source: Vietdata's 2022 Pharmaceutical Industry Report


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