Vietnam - Country Commercial Guide
Healthcare

This is a best prospect industry sector for this country. Includes a market overview and trade data

Last published date: 2022-12-15

Overview

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 3694.02 in 2021. According to the International Monetary Fund (IMF) World Economic Outlook, Vietnam’s GDP was approximately US$368 billion in 2021, making it the fifth-largest economy in Southeast Asia and 41st in the world.  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.  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.

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 262 by 2025 (USD 26 billion of the total market) , equivalent to 5.8% of the country’s GDP. 

Together with the birth rate decline, Vietnam’s aging population is resulting in higher demand for healthcare services and products.  According to the WHO, Non-communicable diseases (NCDs) is an increased mortality and morbidity burden that accounts for approximately 77% of death total in Vietnam.

Public and private hospitals are undergoing upgrades of their facilities and opening new departments for specialty treatment.  This provides opportunities to U.S. suppliers.  More than 90% of medical equipment in Vietnam is imported.  In 2019, the medical device market was valued at $1.4 billion USD.  The sector is forecast to grow at an average rate of over 10% every year over the next five years.Public hospitals dominate the healthcare system and account for 86 percent of the total hospital number in Vietnam. The main challenges that the Vietnamese healthcare sector is currently facing are:

  1. Most hospitals are outdated and face chronic overcrowding.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.
  2. 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. 
  3. 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.
  4. A shortage of qualified medical staff is common in many hospitals. Doctors and nurses work under stressful conditions and wages are relatively low. 

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.

Medical Equipment

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 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, and B medical devices. The Ministry of Science and Technology (MOST) performs regulatory functions for domestically made medical devices.  The Ministry of Finance issues regulations on the management and use of fees and charges related to medical devices.  The Ministry of Industry and Trade (MOIT) is responsible for issuing regulations on the import/export of goods.

On 8 November 2021, the Government issued Decree No. 98/2021/ND-CP on the management of medical devices (“Decree 98”) which took effect from 1 January 2022 and replaced Decree No. 36/2016/ND-CP, Decree No. 169/2018/ND-CP, and Decree No. 03/2020/ND-CP.Pharmaceuticals

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 September 5, 2022, the MOH signed Circular 08/2022/TT-BYT (Cir. 08), replacing Circular 32/2018/TT-BYT with an effective date of October 20, 2022.  The most notable changes of the Cir. 08 include:

- The Certificate of Pharmaceutical Products (CPP) content requirement: Cir. 08 removed Vietnam-specific requirements and now harmonizes with international practice, specifically the WHO-CPP template

- The CPP’s authenticity verification: is no longer a blanket requirement for all dossiers.  Instead, a risk-based approach is applied, and that verification can be done via different channels and in parallel with the Marketing Authorization review process.Leading Sub-Sectors

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.

Opportunities

There are four main classes of medical device purchasers.  The largest are government-funded hospitals, which account for 86 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.

Resources

For more information about the Vietnamese healthcare industry, please contact:

Ms. Nhung Nguyen, Commercial Specialist

The U.S. Commercial Service, U.S. Embassy in Hanoi

Email: nhung.nguyen@trade.gov  
 

Mr. Thao Nguyen, Commercial Specialist

The U.S. Commercial Service, U.S. Consulate General in HCMC

Email:  thao.nguyen@trade.gov