This is a best prospect industry sector for this country. Includes a market overview and trade data
Once one of the poorest countries in the world, Vietnam has transformed into a lower-middle-income country with a GDP per capita of USD 2,715.28 in 2019. The middle and affluent class is expected to grow rapidly and as forecasted by The World Bank they will account for 26 percent of the country’s population by 2026.
According to the AmCham Vietnam, Vietnam’s healthcare expenditures per capita is expected to grow 9.2 percent per year over 2009 – 2025, reaching USD 184 in 2021 (USD 18 billion for the whole country), and USD 262 by 2025 (USD 26 billion of the total market).
Public hospitals dominate the healthcare system and account for 84 percent of the total hospital number in Vietnam. The main challenges that the Vietnamese healthcare sector is currently facing are:
- Most hospitals are outdated and face chronic overcrowding. Hospitals in Hanoi and Ho Chi Minh City receive up to 60 percent of the country’s patients and operate 200 percent of the capacity.
- Much of the existing medical equipment in public hospitals in Vietnam is obsolete and needs replacement. Many hospitals lack sufficient equipment for surgery and intensive care units.
- Vietnamese public hospitals rely largely on a state budget to upgrade their facilities, equipment, and services. The total budget for the health sector has increased but is still too low to meet the demands.
- A shortage of qualified medical staff is common in many hospitals. Doctors and nurses work under stressful conditions and wages are relatively low.
Vietnam’s continued economic development, growth of the middle class, and increasing demand for high-quality healthcare services are crucial drivers for healthcare service providers. To upgrade and expand their facilities, improve operational efficiency, and provide better services, they are making investments to equip their facilities with advanced medical devices.
In 2019, the medical device market was valued at USD 1.4 billion, making Vietnam the ninth largest market in the Asia-Pacific region for medical devices. Over 90 percent of medical equipment and supplies are imported into the country. The sector is forecast to grow at an average rate of over 10 percent every year over the next five years.
Similarly, the pharmaceuticals market is forecasted to grow at 10 percent per year from 2017 – 2028 with the sales per capita increase of nearly triple in ten years from 2017 to 2027 to USD 131. Pharmaceuticals were estimated to account for over 38 percent of the total healthcare expenditure and valued at approximately USD 6.6 billion in 2019.
These developments offer continued market opportunities for US suppliers of medical devices, pharmaceuticals and food supplements.
The Vietnamese government encourages the import of medical equipment because local production cannot meet demands. Imported medical equipment has low import duties and no quota restrictions. However, medical devices are subject to regulation and licensing requirements set by MOH. Only companies with a legal business entity registered in Vietnam and that have an import license are eligible to distribute medical equipment. To fulfill this requirement, foreign suppliers often sell through local distributors or agents. Good representatives should provide immediate access to an established marketing network and possess in-depth knowledge of pertinent regulations.
The MOH determines the guidelines for medical device purchases for all health systems. Within the Ministry of Health (MOH), the Department of Medical Equipment and Construction (DMEC) oversees medical devices, is in charge of issuing import licenses, issuing registration numbers for medical devices (Class B, C, and D), issuing Certificate of Free Sales, and confirming advertisement content. The Provincial Department of Health is responsible for the notification of Class-A medical devices. The Ministry of Science and Technology (MOST) performs regulatory functions for domestically made medical devices.
On May 15, 2016, the Government of Vietnam issued Decree 36/2016/ND-CP regulating the management of medical equipment, including the classification of medical equipment; production, circulation, procurement, supply of medical equipment, medical equipment labels, and the management and use of medical equipment.
Decree 36 is considered the highest legal document to date on the management of medical equipment. Under Decree 36, all medical devices imported into Vietnam are required to register for marketing authorization (MA) licenses. MOH began receiving registration dossiers on January 1, 2017, for medical devices categorized as Class A (low risk), and began receiving dossiers on July 1, 2017, for higher-risk medical devices in Classes B, C, and D.
On December 31, 2018, the Government of Vietnam issued Decree 169/2018/ND-CP, providing amendments and additions to Decree 36/2016/ND-CP. Following an extension by the Office of the Government, the registration deadline for classes B, C, and D to January 1, 2020. Then Decree 03/2020/ND-CP was issued on January 1, 2020, to amend article 68 of the Decree 169/2018/ND-CP and extend the registration deadline for class B, C, and D to December 31, 2021.
Vietnam’s 2016 Law on Pharmacy, which entered into force on January 1, 2017, is the primary legal framework governing the pharmaceutical sector, including registration, sale, and distribution of pharmaceuticals. Within the MOH, Drug Administration of Vietnam (DAV) is the functional department oversees pharmaceuticals and cosmetic.
Decree No. 54/2017/ND-CP dated May 8, 2017, provides guidelines for the Law on Pharmacy. The Decree provides stipulation for pharmacy practice certificate; pharmacy business; export and import of drugs; registration of herbal ingredients, excipients, capsule shells; assessment of overseas drug manufacturers; power, method, and procedures for recalling medicinal ingredients; handling of recalled medicinal ingredients; documents and procedures for issuance of the certification of drug advertisement and drug price management.
Decree No. 155/2018/ND-CP date November 12, 2018, amended some articles related to business conditions under state management of the Ministry of Health, allowed foreign companies operating representative offices to establish foreign investment enterprises (FIEs).
On November 12, 2018, MOH published Circular 32/2018/TT-BYT regulating the Marketing Authorization of drugs and medicinal ingredients, which goes into effect on September 1, 2019. While implementing the Circular, U.S. companies face several difficulties, including the issues with Marketing Authorizations Renewals, Variations, Brand name (IPP) Listing, and content of Certificate of Pharmaceutical Product.
As an effort to support the industry from the Government of Vietnam, on December 31, 2020, MOH issued Circular No. 29/2020/TT-BYT provides amendments to and abrogation of some legislative documents promulgated or jointly promulgated by the Minister of Health. Accordingly, effective periods of marketing authorizations that expire during the period from January 01, 2018, to December 31, 2021, including those that have their effect maintained, will be extended for 12 more months.
The demand for investment in medical equipment will continue to increase and focus on imaging equipment, operating rooms, and emergency resuscitation testing. A recent BMI report shows that about 90 percent of medical equipment in Vietnam is imported, with major suppliers from Korea, PRC, Japan, the United States, and Germany, which account for 71 percent of medical equipment imports. Domestic manufacturers can only meet the demand for basic medical supplies. They produce products such as hospital beds, scalpels, cabinets, scissors, and disposables. They generally offer limited/no warranty or after-sales services, especially in isolated areas of the country.
Other strong areas of growth include operating theaters, orthopedics, emergency equipment, sterilizing equipment, monitoring equipment, and diagnostic equipment such as CT scanners, ultrasound machines, MRI, and X-ray machines.
There are four main classes of medical device purchasers. The largest are government-funded hospitals, which account for 84 percent of the market. Foreign owned hospitals and clinics are also large purchasers; however, these facilities usually purchase supplies from their sponsoring country. Local private hospitals will show the strongest growth, while research and educational institutions will also account for some of the demand. Several medical education and research institutions are open to experimenting with new systems and innovative methods. These end-users present an excellent strategic opportunity to develop partnerships, given their desire to explore new technologies.
Large amounts of public funds have been allocated to upgrade hospitals in the provinces. Major national-scale hospital upgrades and construction projects have been approved by the central government.
Vietnam also receives a large amount of international aid in the form of loans and donated medical equipment. Several small projects are currently taking place in Vietnam, including those funded by the World Bank and the EU.
- 2016 Law on Pharmacy: 2016 Vietnam Law on Pharmacy
- Decree 54: Guidelines for Implementation of the Law on Pharmacy: https://vanbanphapluat.co/decree-54-2017-nd-cp-guidelines-for-implementation-of-the-law-on-pharmacy
- Decree 155: Amendments to Some Articles Related to Business Conditions Under State Management of the Ministry of Health: https://thuvienphapluat.vn/van-ban/Thuong-mai/Decree-155-2018-ND-CP-amendments-articles-related-to-business-conditions-under-the-Ministry-of-Health-402263.aspx?tab=1
- Circular 32: Marketing Authorization of Drugs and Medicinal Ingredients: https://thuvienphapluat.vn/van-ban/The-thao-Y-te/Circular-32-2018-TT-BYT-marketing-authorization-of-drugs-and-medicinal-ingredients-412358.aspx?tab=1
- Circular 29: Amendments to and Abrogation of Some Legislative Documents Promulgated or Jointly Promulgated by the Minister Of Health: https://thuvienphapluat.vn/van-ban/The-thao-Y-te/Circular-29-2020-TT-BYT-2020-abrogation-of-some-documents-promulgated-by-the-Minister-of-Health-463431.aspx?tab=1
- Decree 36: Medical Equipment Management: https://vanbanphapluat.co/decree-36-2016-nd-cp-medical-equipment-management
- Decree 169: Amendments to the Government’s Decree No. 36/2016/ND-CP dated May 15, 2016 on Medical Device Management: https://vanbanphapluat.co/decree-36-2016-nd-cp-medical-equipment-management
- Decree 03: Amending Article 68 of Government’s Decree No. 36/2016/ND-CP dated May 15, 2016 on Medical Device Management Amended by Government’s Decree No. 169/2018/ND-CP dated December 31, 2018: https://thuvienphapluat.vn/van-ban/Tai-chinh-nha-nuoc/Decree-03-2020-ND-CP-amending-Article-68-of-the-Decree-36-2016-ND-CP-medical-device-management-433036.aspx?tab=1
- Vietnam’s Ministry of Health
- The World Bank
- Amcham VietnamFor more information about the Vietnamese healthcare industry, please contact:
- Ms. Nhung Nguyen, Commercial Specialist
The U.S. Commercial Service, U.S. Embassy in Hanoi
- Mr. Thao Nguyen, Commercial Specialist
The U.S. Commercial Service, U.S. Consulate General in HCMC