Vietnam Active Pharmaceutical Ingredients (API) Market Size, Share and Trends Analysis Report – Industry Overview and Forecast to 2032

Active Pharmaceutical Ingredients (API) Market Size

• The Vietnam active pharmaceutical ingredients (API) market size was valued at USD 63.40 billion in 2024 and is expected to reach USD 118.22 billion by 2032, at a CAGR of 8.10% during the forecast period
• The market growth is largely fueled by the increasing prevalence of chronic diseases, rising demand for generic and biologic drugs, and technological advancements in API manufacturing, leading to enhanced efficiency and scalability in production
• Furthermore, growing investments in R&D, expanding outsourcing activities to contract manufacturing organizations (CMOs), and the rising adoption of innovative synthesis technologies are establishing APIs as the backbone of pharmaceutical drug development. These converging factors are accelerating the uptake of Active Pharmaceutical Ingredients (API) solutions, thereby significantly boosting the industry's growth

Active Pharmaceutical Ingredients (API) Market Analysis

• Active Pharmaceutical Ingredients (API) demand in Vietnam is increasing due to the country’s rapidly expanding pharmaceutical manufacturing sector, supported by government initiatives to strengthen domestic drug production and reduce reliance on imports. Growing incidences of chronic diseases and the rising need for affordable generic medicines are further accelerating API demand
• The escalating adoption of advanced healthcare infrastructure and increasing investments by multinational pharmaceutical companies are also fueling the growth of the Vietnam API market. Partnerships between local manufacturers and global API suppliers are helping Vietnam enhance its production capabilities and regulatory compliance
• Vietnam accounted for a significant share of 28% the Southeast Asia active pharmaceutical ingredients (API) market in 2024, driven by its cost-effective manufacturing environment, availability of skilled workforce, and favorable government policies encouraging local API production
• The API market in Vietnam is expected to grow at a strong pace during the forecast period, supported by rising healthcare expenditure, expansion of the generic drugs segment, and strengthening distribution networks across both urban and rural areas
• The traditional potency API segment dominated the market with a revenue share of 72% in 2024, owing to its widespread use in generic drugs, conventional therapies, and large-scale production of essential medications

Report Scope and Active Pharmaceutical Ingredients (API) Market Segmentation    

Active Pharmaceutical Ingredients (API) Market Trends

Growing Importance of Advanced Manufacturing and Regulatory Compliance

• A significant and accelerating trend in the Vietnam active pharmaceutical ingredients (API) market is the increasing focus on advanced manufacturing technologies and compliance with international regulatory standards. Companies are investing in state-of-the-art production facilities and quality control systems to meet both domestic and export demands
  • For instance, several leading Vietnamese API manufacturers are upgrading their plants to adopt continuous manufacturing processes, ensuring higher efficiency, consistent product quality, and reduced production costs. These initiatives help companies remain competitive in the global API market
• The adoption of Good Manufacturing Practices (GMP) and alignment with international pharmacopoeia standards is driving the production of high-quality APIs, enhancing trust among domestic pharmaceutical companies and multinational partners
• Increased investment in research and development is enabling the development of innovative and complex APIs, expanding the product portfolio and catering to emerging therapeutic areas such as oncology, cardiology, and infectious diseases
• Vietnamese API manufacturers are also increasingly forming partnerships and licensing agreements with global pharmaceutical firms to gain access to advanced technology, knowledge transfer, and international markets
• This trend towards technologically advanced production and strict regulatory compliance is fundamentally strengthening Vietnam’s position as a regional hub for API manufacturing, enhancing both domestic healthcare capabilities and export potential

Active Pharmaceutical Ingredients (API) Market Dynamics

Driver

Growing Demand Driven by Pharmaceutical Expansion and Healthcare Needs

• The Vietnam Active Pharmaceutical Ingredients (API) market is witnessing significant growth, fueled by rising demand for high-quality pharmaceutical products to address chronic, infectious, and lifestyle-related diseases. Expansion of the domestic pharmaceutical manufacturing base and increasing healthcare infrastructure investments are contributing to this growth
  • For instance, in April 2024, leading Vietnamese API manufacturers announced expansion projects to increase production capacity and improve technological capabilities, with a focus on high-purity APIs for critical therapeutic segments such as oncology, cardiology, and infectious diseases. Such initiatives are expected to accelerate market growth during the forecast period
• Healthcare providers and pharmaceutical companies are emphasizing quality and consistency, driving investments in advanced manufacturing processes, stringent quality control measures, and adherence to international standards such as Good Manufacturing Practices (GMP) and pharmacopoeia compliance
• Furthermore, partnerships with multinational pharmaceutical companies and increased export opportunities are motivating local API producers to adopt cutting-edge technologies, streamline supply chains, and ensure reliability in production, enhancing Vietnam’s position in the global pharmaceutical landscape
• The expansion of hospitals, clinics, and diagnostic centers across urban and semi-urban regions is increasing the demand for APIs, as more patients require access to essential medications. Pharmaceutical companies are focusing on timely production and distribution to meet both domestic and international needs
• Investment in research and development is fostering innovation in API production, including the development of specialty APIs and high-potency compounds, which supports the country’s ambition to become a competitive player in the regional and global API markets
• Regulatory initiatives by the Vietnamese government aimed at strengthening the pharmaceutical sector, improving drug quality, and supporting local manufacturing further stimulate market growth and encourage international collaboration
• Overall, the Vietnam API market is being reshaped by rising healthcare needs, technological advancements, regulatory support, and increased production capacity, positioning it for sustained long-term growth

Restraint/Challenge

Regulatory Compliance and Production Costs

• Stringent regulatory frameworks, including GMP certification and international pharmacopoeia compliance, pose significant challenges for API manufacturers in Vietnam. Maintaining compliance requires continuous investment in quality assurance, validation processes, and facility upgrades
  • For instance, expansion projects often involve high capital expenditure for advanced equipment, process validation, and staff training to ensure adherence to regulatory standards. Non-compliance can result in production delays, penalties, or restrictions in international trade
• High production costs for complex or specialty APIs remain a barrier for smaller manufacturers, especially when competing with established global API suppliers with economies of scale
• Fluctuating raw material prices, supply chain disruptions, and import/export restrictions can further affect operational efficiency and overall profitability, making market navigation challenging
• Manufacturers must invest in technology, process optimization, and skilled workforce development to overcome cost and compliance hurdles, ensuring sustainable growth in a highly competitive environment
• Effective regulatory compliance, cost management, and quality assurance are critical for building credibility, expanding market presence, and meeting growing domestic and international demand.
• Overcoming these challenges will enable Vietnam to strengthen its global API footprint, enhance competitiveness, and secure long-term growth opportunities in the pharmaceutical sector

Active Pharmaceutical Ingredients (API) Market Scope

The market is segmented on the basis of therapeutic class, type, type of manufacturer, synthesis, type of drug, application, potency, molecule, end user, and distribution channel.

• By Therapeutic Class

On the basis of therapeutic class, the Vietnam active pharmaceutical ingredients (API) market is segmented into antibiotic, cardiovascular, lipid-lowering drugs, infectious disease, anesthetic, NSAIDs, analgesic, antiviral, dermatology, oncology, endocrinology, urology, gastroenterology, ophthalmology, hormonal agents, muscle relaxant, Parkinson, psoriasis, epileptic, immunology, hematology, antineoplastic, immunosuppressive agents, and others. The antibiotic segment dominated the market with the largest revenue share of 28.5% in 2024, driven by increasing prevalence of bacterial infections, expanding hospital networks, and rising consumption of generic antibiotics in both hospital and retail settings. The segment’s strong growth is further supported by enhanced regulatory approvals, government healthcare initiatives, and increasing awareness among physicians and patients regarding effective infection management. Widespread adoption in clinical treatment protocols and steady demand for pediatric and adult formulations reinforce the dominance of antibiotics in the therapeutic landscape.

The oncology segment is expected to witness the fastest CAGR of 12.1% from 2025 to 2032, fueled by rising cancer incidence, increased investment in oncology research, and growing adoption of targeted therapies. Expansion of oncology treatment centers, improved diagnostic facilities, and the introduction of high-potency active pharmaceutical ingredients for cancer therapy contribute to the rapid growth. In additions, increasing collaborations between biotech companies and research institutes, coupled with government support for cancer care programs, are accelerating market penetration. The development of novel formulations and targeted drug delivery solutions further drives adoption and revenue growth in this segment.

• By Type

On the basis of type, the Vietnam Active Pharmaceutical Ingredients (API) market is segmented into innovative active pharmaceutical ingredients and generic active pharmaceutical ingredients. The generic API segment dominated the market with the largest revenue share of 68% in 2024, driven by cost-effectiveness, widespread availability, and strong demand from local pharmaceutical manufacturers. Generic APIs are widely used in hospitals, retail pharmacies, and for mass production of essential drugs, making them a backbone of the pharmaceutical supply chain. Government support for generic drug adoption, coupled with regulatory incentives, further strengthens this segment. In additions, the increasing prevalence of chronic diseases and high demand for affordable medications ensure steady revenue growth.

The innovative API segment is expected to witness the fastest CAGR of 11.2% from 2025 to 2032, fueled by rising investment in R&D, growth in biotech-driven drug discovery, and the introduction of novel therapeutic compounds. Pharmaceutical and biotechnology companies are increasingly focusing on innovative APIs to develop new drugs with improved efficacy and reduced side effects. Strong patent protection and rising demand for targeted therapies in oncology, infectious diseases, and rare disorders are accelerating adoption. Expansion of research institutes and clinical trials further supports growth, making innovative APIs a high-potential area in the Vietnam market.

• By Type of Manufacturer

On the basis of type of manufacturer, the Vietnam active pharmaceutical ingredients (API) market is segmented into captive manufacturers and merchant manufacturers. The captive manufacturers segment dominated the market with a revenue share of 62% in 2024. This dominance is due to their ability to ensure consistent quality, maintain regulatory compliance, and provide a reliable supply for in-house drug production. Integrated production facilities and vertical supply chains allow captive manufacturers to produce high volumes efficiently. They also minimize dependency on external suppliers, which reduces supply chain risks. Captive manufacturers are particularly preferred by large pharmaceutical companies seeking stable, long-term API sources. Their established production capabilities and strong reputation in the industry further reinforce market leadership. In Vietnam, this segment is critical for supporting domestic pharmaceutical manufacturing and ensuring consistent availability of essential drugs.

The merchant manufacturers segment is projected to register the fastest CAGR of 10.5% from 2025 to 2032. Growth is driven by increasing outsourcing by pharmaceutical companies and the rising popularity of contract manufacturing. Merchant manufacturers provide flexible production options, catering especially to small and mid-sized pharma companies lacking in-house capabilities. They offer specialized synthesis processes, cost-effective solutions, and scalable production capacities. Expanding demand for innovative APIs, high-potency drugs, and customized orders further accelerates adoption. The segment benefits from partnerships with biotech firms and international suppliers, allowing rapid response to market needs. Rising investment in contract manufacturing facilities in Vietnam supports this growth trend.

• By Synthesis

On the basis of synthesis, the Vietnam active pharmaceutical ingredients (API) market is segmented into chemical synthetic and biotech. The chemical synthetic segment dominated the market with a revenue share of 70% in 2024, owing to established production methods, lower manufacturing costs, and broad applicability in generic drug production. It provides reliable output for high-volume requirements and is widely used for conventional APIs. The segment’s efficiency, scalability, and strong regulatory acceptance make it the backbone of Vietnam’s API manufacturing. Chemical synthetic APIs are crucial for mass production of antibiotics, cardiovascular drugs, and other essential medicines. Manufacturers prefer this approach for its proven quality control and predictable yields. Strong domestic infrastructure and supplier networks further reinforce the dominance of chemical synthetic methods.

The biotech segment is expected to witness the fastest CAGR of 12% from 2025 to 2032. Growth is fueled by increasing adoption of biologics, vaccines, and high-potency APIs that require advanced biotechnological processes. Rising R&D investments, expansion of clinical trials, and government support for biotech innovations drive rapid market uptake. Biotech synthesis enables development of novel therapies with higher efficacy and targeted treatment options. The growing prevalence of chronic diseases and demand for personalized medicine further accelerates this trend. Partnerships between local manufacturers and international biotech firms also boost production capabilities.

• By Type of Drug

On the basis of type of drug, the Vietnam active pharmaceutical ingredients (API) market is segmented into prescription drugs and over-the-counter drugs. The prescription drugs segment dominated the market with a revenue share of 65% in 2024, driven by the high prevalence of chronic diseases, hospital-based therapies, and growing demand for specialty medications. Prescription APIs are widely used in cardiovascular, oncology, infectious disease, and neurological treatments. Hospitals, clinics, and retail pharmacies rely heavily on prescription APIs for reliable supply and consistent quality. Regulatory approvals, reimbursement frameworks, and physician-prescribed therapies further reinforce the dominance of this segment. Large-scale pharmaceutical companies continue to focus on prescription drug manufacturing, ensuring steady market growth. The segment benefits from established manufacturing infrastructure and strong domestic distribution networks in Vietnam.

The over-the-counter (OTC) drugs segment is expected to witness the fastest CAGR of 9.2% from 2025 to 2032, fueled by rising self-medication trends, increased consumer awareness about health and wellness, and expanding retail pharmacy networks. OTC APIs are widely used in analgesics, antipyretics, vitamins, and digestive products, driving demand for convenient access. E-commerce platforms and digital health channels further accelerate adoption by providing easy access to OTC medicines. Rising preventive healthcare initiatives and over-the-counter product launches by pharmaceutical companies also contribute to growth. The segment is increasingly attractive for small and mid-sized manufacturers due to lower regulatory barriers and growing market penetration in urban and semi-urban regions.

• By Application

On the basis of application, the Vietnam active pharmaceutical ingredients (API) market is segmented into clinical and research. The clinical application segment dominated the market with a revenue share of 68% in 2024, due to strong demand from hospitals, pharmacies, and healthcare providers for therapeutic purposes. Clinical APIs are essential for producing drugs used in routine treatments, hospital therapies, and chronic disease management. High consumption of antibiotics, cardiovascular, and analgesic APIs drives the segment. Established supply chains, quality standards, and physician reliance on clinically approved APIs reinforce market leadership. The segment’s growth is further supported by government healthcare programs and insurance coverage for prescription therapies.

The research segment is expected to witness the fastest CAGR of 10.5% from 2025 to 2032, supported by increasing investment in R&D, biotechnology innovation, and clinical trials. Rising demand for new drug development, novel therapies, and personalized medicines accelerates adoption of research-focused APIs. Pharmaceutical and biotech companies are actively collaborating with research institutes to develop targeted drugs. Expansion of laboratory infrastructure, government grants, and increasing interest in rare and orphan diseases further propel growth. In additions, growing partnerships between local and international research organizations are enhancing technology transfer and accelerating market expansion in Vietnam.

• By Potency

On the basis of potency, the Vietnam active pharmaceutical ingredients (API) market is segmented into traditional potency API and high potency API. The traditional potency API segment dominated the market with a revenue share of 72% in 2024, owing to its widespread use in generic drugs, conventional therapies, and large-scale production of essential medications. These APIs are widely applied across antibiotics, analgesics, cardiovascular, and gastrointestinal drugs. Established production technologies, cost efficiency, and regulatory familiarity make traditional potency APIs a stable and preferred choice for manufacturers. They form the backbone of Vietnam’s pharmaceutical supply chain, ensuring consistent availability of widely used medications.

The high potency API segment is expected to grow fastest with a CAGR of 11.3% from 2025 to 2032, driven by rising demand for oncology, antiviral, and other targeted therapies requiring specialized handling and containment measures. Increasing prevalence of cancer, viral infections, and chronic conditions fuels adoption. High potency APIs also benefit from growing R&D investments, specialized manufacturing facilities, and technological advancements for safe production. Rising focus on precision medicine, regulatory support, and increasing collaboration between local and international manufacturers further accelerate growth in Vietnam.

• By Molecule

On the basis of molecule, the Vietnam active pharmaceutical ingredients (API) market is segmented into small molecule and large molecule. The small molecule segment dominated the market in 2024, accounting for approximately 65% of the revenue share. Its dominance is attributed to cost-effective production processes, well-established manufacturing techniques, and broad applicability across conventional therapeutics such as cardiovascular, analgesic, and anti-infective drugs. Small molecules are favored for their stability, ease of formulation, and compatibility with generic drug production. Regulatory familiarity, faster development timelines, and the ability to meet high-volume demand reinforce their position as the backbone of pharmaceutical manufacturing in Vietnam. Continuous demand from large pharmaceutical industries and integration into multiple therapeutic classes further consolidate this segment’s leading market position.

The large molecule segment is expected to witness the fastest CAGR of 11.2% from 2025 to 2032. This rapid growth is driven by increasing adoption of biologics, monoclonal antibodies, and complex therapeutic proteins. Rising investment in biotechnology, expansion of contract manufacturing organizations, and growing prevalence of chronic and rare diseases are boosting demand. Large molecules are increasingly used in high-value therapeutic areas such as oncology, immunology, and personalized medicine. Advancements in bioprocessing technologies, favorable regulatory frameworks, and strong industry-academia collaborations are further accelerating the expansion of this segment.

• By End User

On the basis of end user, the Vietnam active pharmaceutical ingredients (API) market is segmented into pharmaceutical industries, biotechnology industries, research and academic institutes, and others. The pharmaceutical industries segment dominated the market in 2024, holding around 60% of the revenue share. Its dominance stems from high-volume API consumption for mass drug manufacturing and the ability to leverage economies of scale. Pharmaceutical industries benefit from established distribution networks, large production capacities, and strategic collaborations with suppliers, ensuring consistent supply and market stability. This segment also leads due to its involvement across multiple therapeutic classes and its critical role in meeting nationwide healthcare demands.

The biotechnology industries segment is expected to grow fastest with a CAGR of 10.8% from 2025 to 2032. Growth is fueled by increasing investments in biotech R&D, expansion in biologics manufacturing, and rising focus on personalized medicines and biosimilars. Biotechnology companies are increasingly engaging in novel therapies that require high-value APIs, driving rapid adoption. Collaborations with research institutes, technological advancements in bioprocessing, and supportive government initiatives contribute to accelerating the segment’s growth and expanding its market footprint.

• By Distribution Channel

On the basis of distribution channel, the Vietnam active pharmaceutical ingredients (API) market is segmented into direct tenders, retail sales, and others. The direct tenders segment dominated the market in 2024, accounting for over 55% of the revenue share. Its dominance is driven by centralized procurement by hospitals, large pharmaceutical companies, and government agencies, which ensures cost efficiency, regulatory compliance, and a stable supply of APIs. Long-term contracts, bulk purchasing strategies, and established supplier relationships strengthen the segment’s position. Direct tenders are also preferred for critical and high-volume API supply, maintaining their leading role in the market.

The retail sales segment is expected to witness the fastest CAGR of 11.5% from 2025 to 2032. Rapid growth is supported by expanding pharmacy chains, the rise of e-commerce platforms, and increasing access to APIs for smaller pharmaceutical manufacturers. Enhanced distribution networks, flexible supply chain solutions, and greater penetration into urban and semi-urban areas further accelerate adoption. Rising demand from regional pharma companies and niche therapeutic applications also contributes to the strong growth trajectory of this segment. In additions, growing consumer awareness about high-quality medications and preference for locally accessible products are further driving retail sales expansion.

Active Pharmaceutical Ingredients (API) Market Regional Analysis

• Vietnam accounted for a significant 28% share of the Southeast Asia active pharmaceutical ingredients (API) market in 2024, driven by its cost-effective manufacturing environment, availability of a skilled workforce, and favorable government policies encouraging local API production
• The country’s strategic location and well-established supply chain infrastructure support efficient distribution of APIs both domestically and for export markets, enhancing its competitive position in the regional pharmaceutical industry
• Investment in modern manufacturing facilities, process automation, and compliance with international quality standards such as GMP and pharmacopoeia requirements has strengthened Vietnam’s API production capabilities
• Rising domestic demand for essential medicines and the expansion of hospitals, clinics, and diagnostic centers further bolster the need for locally produced APIs, enabling pharmaceutical companies to meet healthcare requirements efficiently
• Partnerships with multinational pharmaceutical companies are fostering technology transfer, skill development, and adoption of advanced manufacturing processes, contributing to growth and innovation in the Vietnam API market
• Research and development initiatives, focusing on specialty APIs, high-potency compounds, and innovative formulations, are supporting the country’s long-term growth objectives in the pharmaceutical sector
• Government incentives, including tax benefits, subsidies, and streamlined regulatory approvals, encourage both domestic and foreign investors to expand API production capabilities in Vietnam

Active Pharmaceutical Ingredients (API) Market Share

The Active Pharmaceutical Ingredients (API) industry is primarily led by well-established companies, including:

• Dr. Reddy’s Laboratories Ltd. (India)
• Sanofi (France)
• Pfizer Inc. (U.S.)
• GSK plc (U.K.)
• Aurobindo Pharma Limited (India)
• AstraZeneca (U.K.)
• Novo Nordisk A/S (Denmark)
• Unichem Laboratories (India)
• Jubilant Pharma Limited (India)
• MEKOPHAR (Vietnam)
• Lupin (India)
• Sun Pharmaceutical Industries Ltd. (India)
• Divi's Laboratories Limited (India)
• C.H. Boehringer Sohn AG & Co. KG (Germany)
• BASF SE (Germany)

Latest Developments in Vietnam Active Pharmaceutical Ingredients (API) Market

• In March 2025, Vietnam's Ministry of Health announced a national program aiming to expand domestic production of pharmaceutical ingredients and increase exports of pharmaceutical chemical products. This initiative targets annual industrial production growth of 8-11% by 2045, reflecting the government's commitment to developing the pharmaceutical chemical industry into a high-tech sector integrated into the global pharmaceutical value chain
• In May 2025, Sanofi and Vietnam Vaccine JSC (VNVC) launched a new vaccine manufacturing facility in Long An province, southern Vietnam. The plant, covering 2.6 hectares, represents an initial investment of 2 trillion dong (approximately USD 77.19 million) and is projected to produce 100 million vaccine doses annually, with operations expected to commence by the end of 2027. This collaboration underscores the growing capacity for local vaccine production in Vietnam
• In July 2025, Imexpharm, a leading Vietnamese pharmaceutical company, reported a 28.9% increase in profit for the first half of 2025 compared to the same period in 2024. The company's revenue reached VND 633 billion (USD 24.2 million), with a gross profit margin improving from 38.7% to 40.1%. This growth was attributed to a recovery in over-the-counter (OTC) sales and efficient cost management strategies
• In August 2025, Vietnam's top pharmaceutical companies, including Imexpharm, Pharmacity, and Traphaco, are driving growth through innovation, EU-GMP-certified manufacturing, and strong research and development (R&D) pipelines. These companies are expanding their market share across over-the-counter (OTC), ethical (ETC), and export segments, capitalizing on rising healthcare demand and government support

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