The demand for medicine and healthcare will gradually increase again in 2022

The speeding up of the Covid-19 vaccine vaccination process has been helping all life and economic activities return to normal. Therefore, healthcare demand is forecasted to recover and grow by 13% over the same period in 2022.

According to SSI Research, it is estimated that spending on healthcare services in the country will return to normal levels in 2022, when social distancing measures are eased. The impact from the Covid-19 epidemic will be less severe or even bring some positive benefits.

“With 70% of Vietnam's population already fully vaccinated with 2 doses, while new Covid variants may be less dangerous with lower hospitalization rates, we think healthcare demand in 2022 will soon surpass pre-Covid levels, with hospital visits recovering to normal levels and pharmaceuticals will see a significant additional revenue share from the antipyretic and vitamin lines (used regularly to treat mild Covid symptoms).

In particular, many Vietnamese pharmaceutical companies have received formulas for the production of Covid-19 drugs (transferred by Pfizer and MSD) and may soon be commercialized in 2022”- SSI Research pointed out.

Photo by Melany @ tuinfosalud.com on Unsplash

Along with that, the profits of healthcare companies are likely to grow strongly in 2022, with prices of medical services and medicines expected to increase slightly.

SSI Research estimates healthcare companies' profits to grow 15% year-on-year, driven by 12% revenue growth and an expected 4-6% price increase for both drugs and medical services. The price increase is inevitable because pharmaceutical companies have to cope with the high price of raw materials (API), while hospitals have faced many high operating costs in the past two years as the pandemic broke out.

The group of pharmaceutical companies may record high growth in the whole of 2022 while the group of hospitals will achieve high growth in the second half of the year:

For pharmaceutical companies, we think business results could be positive in the first half of 2022 as people stockpile drugs for the new variant of Omicron, while the group of hospitals must wait for a recovery in the second half of 2022, when Vietnam can cope with the new variant, while also easing travel restrictions completely.

Previously, in 2021, pharmaceutical sales decreased due to prolonged social distancing during the 3rd and 4th outbreaks in Vietnam.

Based on drug bidding data of the Vietnam Drug Administration and comments of listed pharmaceutical companies, it is estimated that the total revenue of Vietnam's pharmaceutical industry in 2021 will decrease by 6% compared to 2020, in which revenue from retail drug stores increased only 2% y/y and revenue from hospital channel decreased 14% y/y.

This is the impact from the application of strict social distancing in the provinces, especially the southern region, which has caused disruptions in the supply and distribution activities of pharmaceutical companies.

Meanwhile, many hospitals were forced to convert into Covid treatment centers, causing a sharp drop in drug procurement revenue, while the hospital channel currently accounts for more than 60% of pharmaceutical demand.

Source: congthuong.vn