The Traditional Medicine Hospital in the northern province of Phu Tho. Viet Nam has huge potential as a producer of herbal medicine but has failed to develop the sector, according to industry experts. Experts say it is a wasted opportunity.

Viet Nam, home to thousands of medicinal plants as well as knowledge and practice of oriental traditional medicine, imports most of the herbs used in making medicines.

The country harvests 10,000 tonnes of medicinal herbs annually and imports 40,000 tonnes, or 80 per cent, mostly from China.

Experts note that Viet Nam has around 3,850 species of medicinal plants, including valuable ones like aloe vera (aloe barbabdensis mill), used widely in comestic products, and star anise (also called illicium verum), used to make tamiflu.

As recently as a decade or two ago, Viet Nam earned hundreds of millions of US dollars exporting medicinal herbs, both rare and common, that flourished in the fertile soil and suitable climatic conditions in different parts of the country. Mango leaves, for instance, were exported to Russia, valued for the mangiferin element in it that is used to fight viruses and treat shingles.

Since then, the global market for pharmaceutical raw materials has developed rapidly with increasing demand. Viet Nam was well placed to take advantage of this demand and increase its exports, but the industry has gone in the opposite direction instead, experts and industry insiders rue.

From the hundreds of millions of dollars a year earned a few decades ago, export revenues from medicinal plants and other raw materials have dropped to around US$20 million.

Foremost among several reasons cited for this debacle is uncontrolled exploitation without plans for new cultivation.

"Local residents and businesses have rushed to exploit medicinal herbs growing naturally in the jungles but have not cared that this green resource is not endless and is being depleted rapidly," said Dr Tran Van Tre, head of the Pharmaceutical Faculty of HCM City's Institute of Traditional Medicine.

He said a lot of valuable medicinal herbs, exported in huge quantities, like dandelion (taraxacum), saboo leard (stephania rotunda), the coin-leaf desmodium (desmodium styracifolium) were at risk of disappearing in the country.

Industry insiders, meanwhile, blamed a few individual dealers for undermining the general prestige of Vietnamese medicinal herbs by exporting sub-standard quality to foreign partners a few years ago. This created barriers for other Vietnamese businesses in accessing foreign markets, they said.

Another main reason that is stymieing the growth of the Vietnamese medicinal herbs industry is the lack of modern extraction technology. Star anise, a spice that is grown and used in the country, is a main raw material for tamiflu, the drug being used to treat various kinds of flu including influenza A/H1N1. However, Vietnamese star anise is being exported to foreign markets as a pharmaceutical raw material.

Pharmaceutical factories in foreign countries extract the essence of star anise imported from Viet Nam and re-export it to third countries to make tamiflu, and Viet Nam is losing out on a valuable chance to expand its export market and earn more foreign exchange.

Panacea

Vietnamese pharmaceutical experts have several recommendations to make on improving the current situation.

Tre of the HCM City Institute of Traditional Medicine said first of all, the Government should take a leading role in developing the industry. It should carry out careful research on market tendencies, disadvantages and advantages before formulating and issuing suitable policies and mechanisms to develop the industry.

The Government should also invest in works that are beyond the capabilities of local businesses, such as supporting scientists in research programmes, developing extraction technology and conserving Vietnamese medicinal herbs by designating large areas for their cultivation.

"Viet Nam does not have any recognised laboratory to help businesses prove their products meet international quality standards, and the country needs to develop this capacity," Tre said.

A similar situation prevails regarding extraction technology. There are no large factories that can extract the essence of medicinal herbs that grow well in the country.

Tran Hung, head of the Pharmaceutical Faculty of HCM City's University of Medicine and Pharmacy, emphasised that developing extraction technology is an essential choice for the industry. He wanted the Government to offer greater support for local businesses including preferential loans and taxes.

He noted that some Vietnamese businesses, after realising the global demand for medicinal herbs, were actively investing in setting up their own cultivation areas and building extraction factories but these were small-scale efforts.

They still lacked the know-how to generate huge output meeting international quality standards that can compete with similar products made in other countries, he said.

Nguyen Huu Hau, a pharmaceutical expert, also highlighted the importance of cooperating with leading corporations in developing the domestic industry.

He said leading pharmaceutical corporations like Roche and Aventis already had the most advanced technologies, global distribution systems and popular brand names. However, they still purchased raw materials from other partners, he said.

If these corporations set up large areas for raw material supply as well as production facilities in Viet Nam, they could effect significant savings in transportation and labour costs, he said. Products made in Viet Nam would not only gain prestige of popular brand names, but they could also expand their market share by offering more competitive prices.

In return, Vietnamese businesses would benefit from the transfer of advanced technologies as well as the experience of major partners, Hau said.

The Government has issued many decisions about developing the pharmaceutical industry since 2007, but these have not gained positive results thus far.

It was important to have a long term view and plan because it would take a few years to develop a cultivation hub for medicinal herbs as well as build and operate pharmaceutical factories, Hau said.

Experts were unanimous in saying that if urgent action was not taken to address several problems facing the industry, the nation's valuable green resource would run out, and the loss of hundreds of millions of US dollars in potential export revenues would continue.

Source: VietNamNet/Viet Nam News