Winning in Vietnam means mastering execution, not chasing forecasts.

EU companies are increasingly using Vietnam as their first ASEAN entry. The logic is: a ~100-million-person market, a tender architecture that rewards EU-GMP quality (Categories 1–2), and EVFTA tariff and procurement tailwinds. Yet performance hinges less on the molecule than on how you execute against hospital types, shelf-life and labeling rules, and a partner agreements that often over-promises with high forecasts, and under-delivers. Circular 07/2024/TT-BYT locked in multi-year, centralized procurement with 5 technical groups, pushing discipline and longer planning horizons. For prepared companies, the queue becomes an advantage; for others, it becomes a margin sink.

Winning in Vietnam means mastering execution, not chasing forecasts.

The 5 tiers set your price corridor

Vietnam’s generic tenders sort drugs into five technical groups, with higher groups anchoring higher acceptable prices and lower groups constrained beneath them. Category 1 (EU-GMP/SRA/PIC/S lines; selected brand/reference products) and Category 2 (EU-GMP/PIC/S) are where EU portfolios defend value; Category 3 layers recognized BE; Category 4 is Vietnam WHO-GMP; Category 5 is the general WHO-GMP floor. Circular 07/2024 reaffirms this logic and allows up to 36-month frameworks—meaning your pricing discipline must survive inflation/FX for multiple years.

Who buys: central vs local—and hospital “routes”

Vietnam runs a hybrid buying map: a national centralized procurement unit (can split awards by region/quarters) plus local centralized and individual hospital tenders. Mechanically, you’re bidding into several buyer layers at once, with different calendars and compliance habits. The circular explicitly empowers centralized units and sets reporting cadence and 36-month ceilings for frameworks—great for predictability, unforgiving for sloppy execution.

On the care-delivery side, hospitals are organized by technical levels (special-class/level-1 central, provincial/basic, district/initial, etc.), which drive referral flows and procurement patterns. Central hospitals and top provincial units act as clinical bellwethers; private hospitals and chains often follow their lead. Know which route/level you’re winning, because it determines real retail pull-through and substitution power.

The rules behind hospital acceptance

Winning a tender ≠ moving product. Hospitals and customs apply hard gates that can sink offtake:

• Shelf-life at import/customs. Recent guidance (Decree 163 implementation) clarifies minimum remaining shelf life at customs clearance—e.g., if total shelf life ≤ 9 months, at least one-third must remain; if total shelf life ≤ 30 days, it must still be valid at clearance. Earlier rules required ≥ 1 year remaining (or 18 months for >24-month products); the new framework resets thresholds and formalizes control.

• Hospital pharmacy governance. Hospital pharmacy circulars require tight expiry monitoring, segregation of short-dated/compromised lots, and adherence to storage/temperature specs—practically, many central/provincial facilities refuse short-dated stock, and they scrutinize stability under hot-humid conditions.

Implication: production timing, shipping windows, and post-clearance lead times must be engineered so product still meets hospital shelf-life minima upon delivery—not just at port. The further you are from central hubs, the tighter the clock.

Why forecasts are high—but offtake isn’t

It’s common to see distributors promise high forecasts, but finally don't achieve the agreed volumes. Causes are structural:

1. Calendar slippage & fragmentation. Centralized packages get split by region (North/Central/South) or quarter; provincial/hospital events shift. A “national” forecast quietly assumes every split goes your way—few do.

2. Category surprises. Assessment drops a product to a lower group than the partner expected (e.g., Cat 3 not Cat 2), compressing price and pushing you out of top demand blocks.

3. Working-capital gaps. Partners win on paper but can’t pre-finance inventory across multiple regions or quartered drawdowns; deliveries stall.

4. Shelf-life attrition. By the time goods clear and flow to provincial stores, remaining shelf life fails hospital policy; lots get refused or partially accepted.

5. Spec/pack variance. Hospitals ask for different SKUs (packs, strengths), splitting awards; the initial forecast quietly assumed consolidation.

Controls that work:

• Contract by lot/region/quarter, not by “national” totals; link rebates to audited GRN/offtake.

• Co-own a tender calendar with go/no-go gates per buyer and per group.

• Demand evidence of credit lines sized to awarded volumes (and test drawdown speed).

• Work backwards from hospital delivery shelf-life requirements (not only customs gates) when scheduling production.

Why EU firms pick Vietnam first—and how hospital types amplify the choice

• Tier monetization. Only a few ASEAN markets structurally monetize EU-GMP. In Vietnam, Cat 1/2 status secures a superior price corridor that central hospitals can sustain and provincial hospitals follow—your route matters.

• EVFTA tailwind. Tariffs phase down and access to public procurement opens in stages. Combined with Cat 1/2, it’s a double advantage—cost and access—especially visible in central/provincial hospital lots.

• Positioning signal. Wins at central hospitals shape prescribing norms and retail sell-through; private hospitals tend to mirror central/provincial choices.

Private market: gravity flows from hospitals

Syndicated retail data can overstate independence. In practice, hospital initiation/substitution drives retail. When you win central/provincial hospital lots in Cat 1/2, you set the brand standard; when you lose there, retail rarely compensates. Plan your consumer and e-pharmacy spend as amplifiers of hospital wins, not substitutes for them.

Executive playbook

• Engineer to Category 1/2. Site/CMC decisions determine your price corridor; everything else is second-order.

• Underwrite 36 months. The new circular allows multi-year frameworks; price for FX/inflation and include extraordinary re-opener clauses.

• Design for hospital acceptance. Align label/pack, stability, and delivery shelf-life to central/provincial policies, not just customs.

• De-risk partner optimism. Tie MDF/rebates to quarterly GRN/offtake; demand bank letters showing available working capital sized to wins.

• Sequence wins by route. Target central hospitals (or top provincial “basic” units) first to set clinical gravity; scale to districts and retail after.

Vietnam is a filter market. It rewards EU-GMP quality, but only if you run the full gauntlet: category placement, hospital-route targeting, shelf-life/label readiness, and having a reliable partner. That’s why many EU entrants choose it as their first ASEAN step—and why many stumble. We help clients map SKUs to tiers and pressure-test partner forecasts. In this system, preparation isn’t prudence—it’s profitability.

Sources: Circular 07/2024/TT-BYT, Decree 163/2018 + 2024 updates, Hospital Pharmacy Management Circulars, Vietnam Ministry of Health / DA, EVFTA Agreement.

Produced by MedExport Asia Co,.Ltd, a consortium of pharmaceutical professionals supporting market access in ASEAN.