Vietnam's drug industry will need a total investment of US$102mn through to 2010 to finance development, according to a new plan submitted by the Ministry of Industry. Officials expect the financing to come primarily from bank loans, foreign investors and the local pharmaceuticals sector.

Approximately US$90mn of the funds will be spent building five production plants in the country, each with a capacity of 2,200 tonnes. One of the plants will produce raw materials for antibiotics, aiming to meet around 40-45% of demand in this area.

The remainder of the financing will be allocated for R&D and technology transfer activities, with the government giving priority to companies that serve national healthcare programmes. Vietnam has been struggling to control drug prices of late due to the country's reliance on imported medicines and materials. Since 2001, pharmaceutical prices have risen 40%.

Domestic drug manufacturing in Vietnam is characterised by obsolete facilities, weak financial resources and poor management. As a result, foreign imports — which are perceived to be of higher quality — have captured a dominant market share in recent years. Vietnamese drug makers account for only 40% of the total medicines market, while the country imports around 90% of the active pharmaceutical ingredients (APIs) used in drug production.