Inside a laboratory of DHG Pharmaceutical. — Photo dhgpharma.com.vn

HÀ NỘI — The pharmaceutical market is approaching the US$10 billion mark, reinforcing its position as one of Southeast Asia's fastest-growing healthcare markets and drawing increasing interest from both international drugmakers and equity investors.

According to industry research, the market is expected to reach around $10 billion in 2026, up significantly from approximately $7 billion a few years ago.

The sector's growth is being driven by multiple structural factors. 

Việt Nam is among Asia's fastest-ageing countries, while the expanding middle class is boosting demand for healthcare services. 

Annual pharmaceutical spending has risen to around $75 per capita but remains well below levels in Thailand and Malaysia, indicating considerable room for further growth.

Analysts said the domestic market continues to benefit from rising healthcare demand and expanding health insurance coverage, making Việt Nam an increasingly attractive destination for global pharmaceutical companies.

One of the most notable transactions was Japan's Taisho increasing its stake in DHG Pharmaceutical to a controlling level. The acquisition strengthened the country's largest pharmaceutical producer by enhancing its corporate governance and research and development capabilities while broadening its product portfolio.

At Imexpharm, the participation of foreign shareholder Livzon Pharmaceutical has also underscored the appeal of companies operating manufacturing facilities that meet EU-GMP standards.

Meanwhile, US-based Abbott Laboratories, through its subsidiary CFR International, raised its ownership in Domesco to 51.7 per cent, securing control of the company after a series of share purchases.

The transaction expanded Abbott's footprint in Việt Nam while strengthening its domestic manufacturing capacity to support its broader Asian growth strategy.

South Korean investors have also joined the wave of acquisitions. 

Daewoong Pharmaceutical, together with Mirae Asset, acquired 16.6 million shares of Traphaco from Mekong Capital and Vietnam Holding, equivalent to a 40.12 per cent stake, in a deal valued at more than VNĐ2.35 trillion.

Following the transaction, Daewoong became Traphaco's strategic shareholder, while Mirae Asset assumed the role of a long-term financial investor.

A drug store in Hà Nội. — VNA/VNS Photo

According to market analysts, overseas pharmaceutical groups increasingly favour mergers and acquisitions over building new factories, allowing them to gain immediate access to Việt Nam's distribution networks, customer base and manufacturing licences.

SHS Research said the 2025-2030 period marks a new growth cycle for Việt Nam's pharmaceutical industry as it shifts from traditional generic drug production toward a modern manufacturing ecosystem that complies with international standards and integrates more deeply into global supply chains.

Analysts at Viet Dragon Securities (VDSC) also expect merger and acquisition activity to accelerate, particularly among companies with strong hospital distribution channels (ETC), advanced manufacturing facilities and sufficient ownership capacity to accommodate strategic investors.

Despite the favourable outlook, domestic pharmaceutical companies continue to face challenges. Around 80-90 per cent of pharmaceutical ingredients are still imported, while limited research and development capabilities make it difficult for many firms to compete in high-tech drug segments.

The sector's long-term growth prospects, combined with rising foreign investment, are also reshaping investor sentiment toward pharmaceutical shares.

Traditionally viewed as defensive stocks because of stable healthcare demand, pharmaceutical companies are increasingly attracting attention as merger activity and rising healthcare expenditure prompt investors to reassess valuations.

Since the beginning of 2026, stock performance within the sector has diverged. 

Shares of Binh Dinh Pharmaceutical and Medical Equipment JSC posted double-digit gains on expectations of strong growth in oncology drugs and the hospital channel, while DHG Pharma and Imexpharm have maintained steady upward trends supported by solid financial positions and long-term growth prospects.

Notably, many pharmaceutical stocks remained relatively resilient even as the healthcare index on the Hochiminh Stock Exchange (HoSE) declined 8.9 per cent in April and more than 5 per cent in June, highlighting the sector's defensive characteristics.

According to several securities firms, earnings across the pharmaceutical sector could grow by 10-12 per cent in 2026, supported by increasing healthcare demand, expanding hospital distribution channels and policies favouring domestically manufactured medicines. 

Analysts also believe companies with EU-GMP-certified facilities, extensive distribution networks and sufficient ownership room for strategic investors are likely to remain key targets for foreign capital amid the ongoing wave of mergers and acquisitions. — BIZHUB/VNS