Prescription drug sales down amid COVID contagion fears

A pharmaceutical production line of Traphaco Pharmaceutical Joint Stock Company. Traphaco (TRA) recorded VNĐ 五 五. 二 billion (US$ 二. 四 million) in post-tax profit in the first quarter of  二0 二 一, an increase of approximately  四0 per cent over the same period in  二0 二0. — Photo zingnews.vn

HÀ NỘI — Growth in prescription drugs from the first quarter to the third quarter of  二0 二0 have decreased by  一0- 一 五 per cent compared to  二0 一 九 and fear of COVID- 一 九 is to blame, according to  SSI Securities.

Hospital admission procedures have also become stricter during the pandemic restricting the number of patients who are visiting the facilities for periodic health check-ups. This, in turn, has greatly affected the number of people buying medicine.

The pharmaceutical industry has long been considered a stable growth industry, but since the beginning of the pandemic, these factors have seen significant declines in the prescription drug sector.

In  二0 二0, the growth rate of this channel was just five per cent, significantly lower than the figure of more than  一0 per cent the previous year.

In contrast to the decline in prescription drug sales, over the counter (OTC) drug sales recorded remarkable growth. This was particularly notable in sales of pain relievers, antipyretics, antiseptics, and hand sanitiser.

OTC drug prices are not affected by the Law on Bidding, which creates favourable conditions for pharmaceutical enterprises to promote and exploit this product line, according to Phú Hưng Securities Corporation.

According to a survey by the Vietnam Report, about  七 一. 四 per cent of enterprises participating in the survey chose to develop and expand OTC channels to compensate for the shortage of sales in prescription drugs.

Businesses with well developed OTC sales channels all recorded positive results in the first quarter of this year. Traphaco Pharmaceutical Joint Stock Company (TRA), for example, recorded a VNĐ 五 五. 二 billion (US$ 二. 四 million) in profit after tax in the first quarter of  二0 二 一, an increase of about  四0 per cent over the same period in  二0 二0.

Many businesses, however, that did not have strong OTC sales at the beginning of the pandemic have suffered losses. Bến Tre Pharmaceutical Joint Stock Company (DBT), for example, recorded a loss of VNĐ 三 二 八 million in the first quarter of this year opposed to a VNĐ 六 billion pre-tax profit in the same period last year.

COVID- 一 九 VACCINES

In early June  二0 二 一, the Ministry of Health announced a list of  三 六 medical facilities eligible to import and preserve COVID- 一 九 vaccines, including many companies listed on the stock exchange. These included Vimedimex Bình Dương Pharmaceutical JSC (VMD), Bến Tre Pharmaceutical JSC (DBT), Central Pharmaceutical Company No. 一 JSC (DP 一), Danang Pharmaceutical Medical Equipment JSC (DDN) and Codupha Central Pharmaceutical JSC (CDP).

Almost i妹妹ediately after the announcement, pharmaceutical stocks received a much needed boost. VMD, for example, saw an increase from VNĐ 二 三, 七00 per share on June  一 to VNĐ 三 四, 一 三0 per share on June  九. A  四 四 per cent increase, before sliding back to its current value of VNĐ 二 六, 五00 per share.

Similarly, DDN recorded five consecutive sessions of gains from June  二 to June  八. This saw an increase of  三 五 per cent, from VNĐ 一 三, 二00 per share to VNĐ 二 二,000 per share, before closing Wednesday at VNĐ 一 三, 五00 per share. This was still  一 七 per cent above its share price in early June.

DBT shares also increased dramatically over the same period. Shares rose for six consecutive sessions by  四 二 per cent, rising from VNĐ 一 三, 一 五0 to VNĐ 一 八, 三 五0 per share only to drop back to around VNĐ 一 三, 三 五0. A  九 per cent increase compared to early June.

Notably, DBT has also completed the capital divestment from Nha Trang Vaccine and Biological Products JSC successfully (BIO), selling  四. 四 million shares or the equivalent to  五 一 per cent of BIO's charter capital.

BIO was considered a "dead"大众stock due to failing to witness any transactions after joining the Unlisted Public Company Market (UPCoM) in August  二0 一 八.

However, this changed quickly amid the pandemic with the stock receiving much more attention from investors. On May  二 七 of this year, BIO hit VNĐ 一 五 二, 四 五0 per share, an increase of  一, 五 九 四 per cent compared to VNĐ 九, 五00 per share recorded on April  二0,  二0 二 一.

Currently, BIO has cooled down significantly, trading around VNĐ 四 一,000 per share.

Mergers and acquisitions are also believed to be impacting stock prices in recent months.

On June  七 this year, Pymepharco JSC (PME) announced that Stada Service Holding BV of Germany had made a public offer to buy nearly  三 五 六,000 PME shares. This is the equivalent to 0. 四 七 per cent of the company's charter capital. As of March  二 六 this year, Stada Service Holding BV held  九 九. 五 三 per cent of capital in PME. This acquisition would give the German financiers full ownership of PME’s capital.

Việt Nam's pharmaceutical market is currently valued at $ 七. 四 billion covering  二 二,000 different types of drugs. According to Fitch Solutions, growth in Việt Nam's pharmaceutical industry will reach  八. 七 per cent in  二0 二 一. SSI Securities also forecast a growth rate of  一 五 per cent higher than the pharmaceutical industry's average growth rate of  一 一. 八 per cent, over the  二0 一 八- 二0 一 九 period.

These strong growth figures are partly attributed to Việt Nam's rapidly ageing population and big increases in per capita income. — VNS