Pharmaceutical Manufacturing Investment Vietnam: Typical FDI Projects and Emerging Trends

Vietnam's pharmaceutical industry is entering a historic growth phase, aiming for a market size of USD 20 billion by 2026, yet it has attracted only a modest USD 1.8 billion in foreign direct investment (FDI) so far. 

This significant gap highlights a massive, untapped potential for pharmaceutical manufacturing. Global pharmaceutical giants like AstraZeneca, Sanofi, Roche, and Novartis are revisiting Vietnam with renewed interest, driven by the country’s new Resolution 57-NQ/TW and the revised 2024 Law on Pharmaceuticals. The growth in the Vietnamese pharmaceutical market is undeniable.

Based on our work at Viettonkin Consulting, a leading ASEAN FDI advisory group, we are observing a structural shift among multinational clients from traditional import-based distribution models to developing localized manufacturing hubs designed to serve the entire regional supply chain. This shift is crucial for the long-term health of Vietnam's pharmaceutical sector.

Key Takeaways:

• Vietnam's pharmaceutical sector is accelerating, yet FDI remains underpenetrated at just USD 1.8 billion despite a projected USD 20 billion market size by 2026.
• Foreign direct investment is rapidly shifting from import/distribution to localized manufacturing and R&D, driven by strategic government policies like Resolution 57-NQ/TW.
• The 2024 Law on Pharmaceuticals, competitive production costs, and strategic trade agreements like the RCEP are key factors attracting foreign investors.
• Early entrants like AstraZeneca and Sanofi are establishing large-scale R&D and manufacturing facilities, while M&A activity is increasing with new players from France, Japan, and Korea.
• Emerging trends are pivoting toward high-value segments, including biologics, API localization, green manufacturing, and technology transfer alliances.

Current Landscape of Pharmaceutical Manufacturing Investment in Vietnam

Foreign direct investment in the pharmaceutical sector is still underpenetrated but is accelerating toward scale. While the cumulative FDI of approximately USD 1.8 billion across 160 projects represents less than 0.5% of Vietnam's total FDI, this figure has tripled in just five years, signaling robust and growing investor confidence. 

This momentum indicates a strategic pivot for Vietnam's pharmaceutical industry from initial market exploration to building long-term, high-value manufacturing assets.

Investment has traditionally been concentrated in the economic powerhouses of Ho Chi Minh City, Hanoi, and Da Nang. However, we are now seeing a strategic decentralization toward emerging secondary hubs like Bac Ninh and Binh Duong, where industrial parks offer attractive incentives for high-tech investment projects. 

The investor profile has been dominated by Asian capital from Singapore, Taiwan, and South Korea, leaving a significant opportunity gap for EU and US-based pharmaceutical firms.

This landscape is set against a supportive policy backdrop, particularly the national strategy for Vietnam's pharmaceutical development to 2030, which aims to dramatically increase local production of active pharmaceutical ingredients (APIs) from the current 20% to 80%. 

According to VnEconomy (2024), while overall inflows have been modest, emerging bio-tech clusters in provinces like Thai Nguyen are beginning to attract more specialized investment, fundamentally changing the geographic and technological scope of the industry. This strategy also aims to insulate the pharmaceutical market from domestic market fluctuations.

Key Drivers Attracting Pharmaceutical FDI to Vietnam

Vietnam now blends regulatory modernization with cost competitiveness, a rare dual advantage in Asia that is capturing the attention of global pharmaceutical executives. Key drivers attracting foreign investors include:

• Regulatory Reform: The 2024 Law on Pharmaceuticals is a critical catalyst, creating a more transparent regulatory landscape. The Vietnamese government is encouraging investment through streamlined administrative procedures.
• Government Commitment: As reported by VnEconomy (2024), recent dialogues with executives from AstraZeneca and Pfizer signal a strong commitment from Vietnamese policymakers to anchor global supply chains within the country, building the trust necessary for large-scale pharmaceutical investment.
• Cost Competitiveness & Favorable Incentives: With low labor costs and preferential corporate income tax rates for high-tech projects, the financial advantages are clear for any pharmaceutical business.
• Demographic Tailwinds: A rapidly aging population and rising healthcare spending are expanding the domestic market for pharmaceutical products, from essential medicines to prescription drugs.
• Strategic Market Access: The country's integration through trade agreements like the RCEP transforms it into an efficient export gateway to the 600-million-consumer ASEAN market. This strengthens the entire healthcare sector.

Typical FDI Enterprises in Vietnam’s Pharmaceutical Sector

Early entrants in Vietnam's pharmaceutical market are shaping a hybrid model that moves beyond simple drug formulation to integrate production with robust R&D partnerships. 

AstraZeneca Vietnam’s USD 310 million investment plan (2020–2030) exemplifies this trend, with a dual focus on R&D for respiratory drugs and the development of green manufacturing facilities. Similarly, Sanofi's plant in Ho Chi Minh City is among the largest in ASEAN, supporting both domestic sales and regional export.

The market is also witnessing a surge of new entrants and strategic joint ventures. According to an industry analysis from Nhapthuoc.com (2025), the sector is experiencing a boom in M&A activity as foreign investors seek to acquire local companies to gain immediate market access and improve pharmaceutical distribution. 

This trend is mirrored by companies like Livzon Pharmaceutical Group Inc, which actively pursued international expansion to penetrate the Vietnamese market.

Table: Key FDI Pharma Enterprises in Vietnam 2025

Emerging Trends Shaping Vietnam’s Pharmaceutical Manufacturing FDI

The next wave of pharmaceutical investment will pivot from formulation to innovation, driven by new market demands and supportive government policies. Key trends shaping the Vietnamese pharmaceutical sector include:

• Shift to High-Value Products: The lessons of the COVID-19 era have created a sharp focus on bio-security, fueling investment in high-margin biologics and vaccines. This includes R&D for high tech drugs and rare drugs.
• API Localization: Government programs are aggressively promoting API localization to improve domestic manufacturing and reduce the country's heavy reliance on imports, which currently account for 80% of the domestic supply according to Decision 376/QD-TTg of 2021 on the Strategy for development of pharmaceutical, vaccine and biological industries to 2030 – QĐ 376/QĐ-TTg (2021).
• Green Manufacturing & Technology Transfer: New ESG standards are encouraged under Vietnam’s green growth strategy, becoming essential for pharmaceutical plants aiming to meet international standards. This is fostering a new generation of technology transfer alliances for drug development and localizing manufacturing capabilities.
• R&D Ecosystem Growth: This collaborative approach is building a sophisticated talent and R&D ecosystem, supported by universities and a growing skilled workforce to conduct more clinical trials locally. This strengthens the foundation of Vietnam's pharmaceutical industry.

Challenges and Strategic Outlook for 2030

Unlocking the full potential of Vietnam's pharmaceutical sector requires synchronized reforms. Foreign investors still face persistent regulatory challenges, including the need for robust regulatory compliance and complex procedures for clinical trials. 

Infrastructure and logistics for supply chains, particularly in cold-chain storage and drug distribution, can also add complexity.

However, the government's policy priorities for 2030 are designed to directly address these challenges and mitigate risks. For investors, the path forward involves a clear-eyed strategy. 

Our advisory work at Viettonkin consistently shows that success hinges on choosing the right market entry model and leveraging deep local networks to navigate Vietnam’s and ASEAN’s complex licensing and regulatory landscapes effectively. This is critical for the success of any pharmaceutical manufacturing operation.

Frequently Asked Questions

What are the most common challenges for foreign pharmaceutical investors in Vietnam?

The most common challenges include navigating complex regulatory approval processes, securing a reliable cold-chain logistics network, and overcoming the high dependency on imported raw materials subject to the Ministry of Finance’s list of incentivized pharmaceutical inputs. Based on our 3,000+ projects, building strong relationships with local distributors and healthcare providers is an effective strategy to address these issues in the pharmaceutical market.

How long does it typically take to get a new pharmaceutical product approved for sale in Vietnam?

The timeline for product registration, including securing an Investment Registration Certificate (IRC), can range from 12 to 24 months. This depends on the product type (e.g., generic drugs vs. new chemical entity) and meeting Good Manufacturing Practice (GMP) standards. For Fortune Global 500 clients, we often advise preparing for a 24-month cycle.

Should I prioritize building a new factory or acquiring a local Vietnamese manufacturer?

Building a new, wholly-owned factory provides full control over quality and intellectual property but requires a longer timeline and higher initial foreign investment. Acquiring local firms can provide immediate market access and an existing distribution network but requires extensive due diligence. The optimal choice for your pharmaceutical business depends entirely on your long-term strategic goals for the ASEAN region.

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