Vietnam Healthcare Sector
Economic growth and demographic changes are driving demand for healthcare services throughout Vietnam. Public, provincial-level hospitals funded by the government are undergoing upgrades. Vietnam’s healthcare expenditure was approximately $17 billion in 2018 (6.6% of GDP) and will grow to $23 billion in 2022 – a compound annual growth rate (CAGR) of approximately 11 percent. Private healthcare expenditure is expected to grow at a CAGR of 7.5% mainly due to increasing insurance coverage for citizens.
Market Entry: Vietnam is not a market for inexperienced exporters. It can take one or two years to make commercial inroads. The north has a higher concentration of government ministries and regulatory agencies, and the south is the dominant industry hub. The two markets also differ in terms of consumer behavior and preferences. U.S. businesses may enter indirectly by appointing an agent/distributor or directly by establishing a commercial operation.
Market Trend: More than 85 million people, nearly 90% of the population, were covered by health insurance last year. The government is committed to reach 95% of the population by 2025.
Main Competitors: Primary foreign suppliers of pharmaceuticals, including food supplements, are from France, India, Germany, South Korea, Italy, the U.S., the UK, and Switzerland. While foreign suppliers of medical devices are from the U.S., Japan, Germany, Italy, the Netherlands, Singapore, Korea, Taiwan, and China. Vietnam’s medical equipment market is currently valued at nearly US$1.3 billion with an annual growth rate of 12% - 15%, and more than 90% of medical equipment in Vietnam is imported. Of these, more than half come from the United States, Japan, Singapore, Germany and China. The remaining 10% market share of medical equipment comes from roughly 300 firms that primarily manufacture simple and low value-added products, such as beds, trolleys and hospital furniture.
Current Demand/Registration Process: The Ministry of Health (MOH) is the main regulatory authority. The Ministry’s Department of Medical Equipment and Health Works has jurisdiction over the importation of medical devices. The Drug Administration of Vietnam and Vietnam Food Administration regulate pharmaceuticals and food supplements respectively.
Medical Equipment: Medical devices must receive authorization from the competent authority before sale in the Vietnamese market. The Government recently issued Decree No. 03/2020/ND-CP to amend Decree No. 36/2016/ND-CP and 169/2018/ND-CP, which currently regulates medical devices in Vietnam. The decree extends the date of expiration of the import licenses for medical equipment after December 31, 2021. Any company that received authorization for medical device types B, C and D between 2018 and 2021 can continue marketing them through 2021.
Pharmaceuticals: Decree No. 54/2017/ND-CP, guiding the implementation for the Law on Pharmacy, creates uncertainties for Foreign Invested Enterprises engaged in distribution related activities. In addition, the MOH released the Circular No. 07/2018/TT-BYT providing guidelines for the pharmaceutical sector. Under the circular, Representative Offices can no longer house medical representatives who provide drug information to doctors and hospital administrators. Additionally, the MOH promulgated Circular 32 on September 1, 2019 mandating pharmaceutical importers to provide a Certificate of Pharmaceutical Product for all application dossiers for the issuance, renewal and revision of marketing authorizations (MA) for drugs/medicinal ingredients. Circular 32 holds MA holders responsible for coordinating with the manufacturers and foreign government agencies of exporting countries in issuing the appropriate Vietnam-specific documentation.