VIETNAM INSISTS DRUG SECTOR ATTRACTING FOREIGN INVESTMENT
According to official statistics, Vietnam's consumer drug prices are increasing at a slower rate than inflation, 4.5% higher year-on-year in September and 0.5% higher than in August. The data suggests that government price restrictions are beginning to take effect. Vietnam has recently implemented legislation that prohibits drugmakers from raising prices without official blessing.
Drug importers have criticised the measures, claiming that they do not account for the country's spiralling inflation rate, which is roughly 7.8% at present, as well as Vietnam's currency troubles. There are also complaints over price differentials with neighbouring countries, with China now a key source of imports. Investors are also concerned over a likely supply agreement with Cuba, expected to take place next month.
Nevertheless, government officials insist that foreign investment in Vietnam's drug sector is in a healthy shape, with around 200 foreign firms involved in manufacturing drugs in the country. However, despite the presence of manufacturers based in India, South Korea and France, Vietnam has to date only approved 35 drug projects, with foreign capital totalling US$240mn. Less than half of this amount has actually been distributed.
Meanwhile, the country's drug demand is growing rapidly, with per capita consumption
rising from US$0.3 in 1990 to US$6 in 2004. Due to an under-developed drug industry,
foreign companies now account for 60% of sales.
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