The global pharmaceutical industry has entered a period of transformation and its impact on the Vietnamese market

The global pharmaceutical industry is entering a period of strong transformation. Geopolitical upheavals, rapid technological advancements, and increasing regulatory pressures have been reshaping the way the pharmaceutical industry operates, with many innovations and expansions of its scope and impact on human life.  Latham & Watkins' "Healthcare & Life Sciences Market Update"[1] report, one of the world's leading law firms, recently pointed to key global strategic trends. Notably, many of these trends have been creating obvious spillover effects on Vietnam – a pharmaceutical market that is on the verge of strong development in Southeast Asia.

Global pharmaceutical industry landscape in 2025

Wave of M&A and strategic restructuring

The year 2025 will see an explosion of mergers and acquisitions (M&A) in the pharmaceutical and biological sectors. The main drivers come from growth pressure, the demand for innovation and the need to occupy new markets. Global pharmaceutical giants are prioritizing the acquisition of biotech companies, artificial intelligence (AI) platforms for drug research, and businesses with advanced biomanufacturing technology.

In addition to market dynamics, the current M&A process is also driven by the trend of "global value chain restructuring" – where corporations want to diversify geopolitical risks and seek production capacity in emerging markets.

Supply chain instability and geostrategic shifts

From the consequences of the COVID-19 pandemic to the protracted conflict between Russia and Ukraine, the global supply chain of pharmaceutical raw materials, medical devices and biologicals is facing many risks. In particular, excessive dependence on some supplier countries such as China or India is forcing corporations to restructure their production and logistics networks need.

The trend of "friendshoring"[2] is becoming more and more popular. Countries with reasonable production costs, good infrastructure and stable policies are considered attractive destinations for international pharmaceutical investors.

Legal reform and global compliance pressures

The European Union (EU) is undertaking a comprehensive revision of the Medicines Law – the largest effort in more than two decades – to simplify drug approval, accelerate innovation and increase access to medicines. At the same time, regulations on medical data protection and research ethics are tightening, especially in the context of patient data becoming a strategic asset.

In the U.S., the Department of Justice (DOJ) and federal health agencies are stepping up criminal investigations into fraud in health insurance, clinical research, and the commercialization of medical products. This is a stark warning that pharmaceutical companies cannot delay investing in internal compliance systems[3].

The revolution in medical data and artificial intelligence

Medical data – especially medical record data, test results, and genetic information – is becoming an important input for developing new drugs and personalized care models. AI in pharmaceuticals is no longer a distant prospect, but a tool that is deployed in practice to shorten research time, detect side effects, and support clinical trials.

However, the ability to exploit this data is limited by strict privacy regulations from the EU, the United States, and many countries around the world. These regulations require businesses to comply with multiple layers of legislation at the national and regional levels to protect people's personal data.

Shifting to a value-based healthcare model

Value-based care – in which medical payments are based on outcomes rather than volume of services – is thriving in the US, the EU and some OECD countries. This model requires comprehensive data, accurate measurement of treatment efficacy, and deep cooperation between the parties: hospitals, pharmaceutical companies, and insurers.

Impacts on the pharmaceutical industry in Vietnam

Vietnam – A new destination in the supply chain shift

With its strategic location near China, the major economic center of Southeast Asia and an increasingly complete seaport system, Vietnam is being considered by global pharmaceutical corporations as a potential destination to locate factories or process pharmaceuticals. However, in order to truly become a "strategic link" in the global supply chain, Vietnam is facing and needs to solve huge problems such as: (1) Almost absolute dependence on pharmaceutical raw materials imported from China and India[4]; (2) Newly formed, unclear and complete investment incentive policies to attract the world's leading pharmaceutical manufacturing corporations to set up investment projects in pharmaceutical production in Vietnam; (3) Access to industrial land for large-scale pharmaceutical projects is still limited[5].

The impact of the global M&A wave on Vietnam

M&A deals in the pharmaceutical industry in Vietnam are increasing in volume and value, especially with the participation of investors from Japan, South Korea and Europe. This trend brings benefits in terms of capital, technology, modern management standards and a large output market for Vietnamese enterprises.

However, the major challenge is the lack of a specialized legal framework to regulate M&A in the pharmaceutical sector, which is closely related to health security and drug pricing policies. In addition, with lengthy administrative procedures and complex legal documents, it has become a significant barrier for multinational corporations to set foot in Vietnam's potential pharmaceutical market. Not to mention, pharmaceutical enterprises are considered large in Vietnam, if compared in terms of scale, technology, and development potential compared to pharmaceutical enterprises in the region as well as in the world, there are still many limitations and losses. Therefore, although the wave of M&A in the pharmaceutical sector globally is very exciting, M&A deals in Vietnam in this field are very trickle.

Opportunity to join global value chains – but with legal reform

The fact that international corporations are looking for partners to carry out clinical trials, product research or drug processing opens up opportunities for Vietnamese pharmaceutical enterprises. At the same time, international standards on research ethics, data governance and reporting of results are also required to be strictly applied.

Vietnam's current Law on Pharmacy lacks specific regulations on personal medical data. The current regulations on handling personal data are not in line with international standards such as GDPR (EU) or HIPAA (USA). This is a major barrier that makes foreign research or investment funding organizations hesitant to cooperate in the long term with pharmaceutical units in Vietnam when the regulations on personal data protection, especially personal data in the field of medicine, are still incomplete.

Digital health data – An asset that is being "forgotten"

Public and private hospitals in Vietnam are gradually digitizing medical records, tests, diagnostic images, etc. However, the lack of a legal framework to "establish legal ownership and use" of health data makes this valuable resource impossible to exploit commercially.

If strictly but flexibly managed, Vietnam's health data can completely become an "input material" for medical AI projects, epidemiological research, and new drug development – similar to how India and Singapore are implementing in practice.

Launching a value-based care model – Long-term trends

Although not yet popular, the Value-Based Care model is a potential trend in health system reform in Vietnam. Integrating data between health providers, insurers, and drug manufacturers will help optimize costs, make treatment transparent, and improve the quality of care.

However, in order to implement it, Vietnam needs to have a national data infrastructure on health, develop a policy framework for measuring the value of treatment, and more flexible payment mechanisms instead of relying only on current health insurance norms. In particular, the formation of a legal corridor for personal data protection, especially personal data in the health sector, is necessary. However, we are also very concerned that the protection of personal data, without exceptions to this field, if not carefully and carefully considered, will be more of a barrier than a convenience for this model to exist and develop in Vietnam as an inevitable and long-term trend.

The global pharmaceutical industry in 2025 is entering a period of far-reaching change at a rapid pace. Fluctuations in technology, legal, supply chains and medical care models have been creating a "global thrust" that Vietnam cannot stand by. To take advantage of the opportunity, Vietnam's pharmaceutical industry needs to take reasonable steps and strategies to be able to adapt to the global pharmaceutical market, namely, legal policies in line with international standards and the context of Vietnam's industry development; the strategy of attracting and screening foreign investors, especially valuable investors in the pharmaceutical sector, needs to take different and wise steps; along with Vietnam's data infrastructure and governance capacity are modern enough to be able to respond to the new situation.

In addition to the efforts of businesses, the role of the State in reforming the "institution" and coordinating the strategy of the pharmaceutical industry is a decisive factor whether Vietnam can go with the global wave or not.

 DUSA Pharmaceuticals has reached a resolution with the US Department of Justice (DOJ) concerning the promotion of Levulan Kerastick and BLU-U on payment of $20.75 million (around Rs 148.51 crore). Source: MoneyControl

Appendix: Several high-value pharmaceutical M&A deals globally in Q1, 2025

Lawyer Nguyen Van Phuc

HM&P Law Firm