Deal may hit VN drug firms

The Vietnamese sector has seen an annual growth rate of 16 per cent in the Southeast Asian region, with total consumption reaching approximately $3.3 billion (Bt115.3 billion).

However, the market share is likely to shrink when foreign pharmaceutical firms enter the market once Vietnam joins the TPP. The Vietnamese pharmaceutical industry would find it difficult to compete with foreign companies since the country’s pharmaceutical industry is heavily dependent on raw materials.

Like other trade agreements, TPP will increase the amount |of imported medicines being |sold in Vietnam.

According to the TPP, taxes on pharmaceutical products will be reduced from 2.5 to zero per cent. This will encourage competition from foreign businesses, where patent drugs have more advantages than branded generics.

Le Van Truyen, former Minister of Health, said domestic businesses would face difficulties if international pharmaceutical brands prolong their patent period by adjusting minor details in patent drugs.

They would also eliminate the opportunities for other countries to manufacture generic drugs.

This is the major challenge for local pharmaceutical businesses, which have predominantly manufactured branded generic drugs, Truyen added.

However, TPP would also bring certain benefits to the pharmaceutical industry, as well as local patents. Specifically, TPP calls for reducing the duration of patents on medicines to seven years. This would create an opportunity for all companies, and the local pharmaceutical industry would be able to manufacture branded generic drugs.