However, Foreign pharmaceutical companies still face significant regulatory restrictions in Vietnam, as the government does not permit them to directly engage in the importation or distribution of pharmaceutical products. This creates a considerable challenge for foreign firms seeking market entry, as they must navigate complex licensing processes and rely on local distributors or establish partnerships with domestic entities to operate within the country. However, a notable advantage is that Vietnam does not strictly regulate pharmaceutical selling prices, allowing foreign companies greater pricing flexibility compared to markets with stringent price controls. This regulatory environment presents both obstacles and opportunities, requiring strategic approaches for foreign pharmaceutical firms to successfully enter and compete in Vietnam’s growing healthcare market.
Strict regulations by the government that prohibits foreign companies from directly engaging in importation and distribution of pharmaceuticals, necessitating partnerships with local entities. As depicted in the value chain [Figure. 3], foreign firms such as Sanofi and Hisamitsu can obtain import and manufacturing licenses but must outsource wholesale distribution to local partners or subsidiaries. Companies like DKSH and Zuellig Pharma specialize in import services but do not participate in direct retail distribution. Meanwhile, domestic companies such as Gigamed, Hoang Duc, and Imexpharm hold full-spectrum licenses, enabling them to manufacture, import, and distribute pharmaceuticals within the country. The retail sector is dominated by local pharmacy chains, reinforcing the necessity for foreign companies to navigate Vietnam's regulatory framework strategically.