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Healthcare Resource Guide: Vietnam

Vietnam Statistics

Summary

Policy

Market Entry

Current Market Trends

Main Competitors

Current Demand

Registration Process

Reimbursement

Barriers

Trade Events

FAQs


CS Contacts

Best Prospects

Market Size

Capital: Hanoi

Population: 95 million

GDP*: US$200.5 billion

Currency: Vietnamese Dong

Language: Vietnamese

Summary

Vietnam’s economy enjoyed a high GDP growth of 6.2 percent in 2016, and is forecasted to grow at 6.5 and 6.7 percent in 2017 and 2018 respectively. Vietnam’s healthcare sector is expected to continue to grow rapidly from 2017 to 2020 due to the following factors:

Ÿ Healthcare expenditure growth of 5.4% per year

Ÿ Vietnamese authorities’ commitment to build new hospitals and upgrade existing ones to resolve or ease overcrowding, especially at several public city hospitals

Ÿ Increased investment in high-tech and high-quality healthcare services from both the government and private sector to serve high-income patients and the estimated 40,000 people spending roughly US$2 billion per year on healthcare services overseas

Ÿ More available funding for healthcare projects thanks to public-private partnership (PPP) investments and low-interest commercial loans.

Policy

The Government of Vietnam recognizes and encourages the private sector's involvement in all aspects of healthcare service due to the significant lack of state funding. The government issued Decision 71/2010/QĐ-TTg in November 2010 regulating PPP investment in nine key sectors, including healthcare.

In February 2015, the government issued Decree 15/2015/NĐ-CP to replace Decision 71/2010/QĐ-TTg. Decree 15/2015/NĐ-CP prescribes the fields, conditions, and procedures for the implementation of investment projects in the form of public-private partnership; the mechanism for management and use of the State’s investment capital in the implementation of projects; policies on investment incentives and assurance and state management responsibility for investment projects in the form of public-private partnership.

Market Entry

Vietnam is not a market for inexperienced exporters. U.S. companies preparing to enter the Vietnamese market must plan strategically and be persistent and consistent with face-to-face follow-up. It can take one or two years to make a successful sale in this market. Building relationships is critical to success.

U.S. companies entering the Vietnamese market will need to consider two marketing strategies; one for the northern part of the country, which has a higher concentration of government ministries and regulatory agencies, and one for the south, which is the dominant industry hub. The two markets also differ in terms of consumer behavior and preferences.

To enter or expand in Vietnam, U.S. businesses may do so indirectly through the appointment of an agent or distributor. U.S. companies new to Vietnam should conduct sufficient due diligence on potential local agents/distributors to ensure they possess the requisite permits, facilities, manpower, and capital. Firms seeking a direct presence in Vietnam should establish a commercial operation utilizing the following options: a representative office license, a branch license, or a foreign investment project license under Vietnam's revised Foreign Investment Law.

Current Market Trends

  • improve the quality of healthcare service, the government encourages both public and private investments in developing or expanding healthcare facilities, training medical professionals, implementing IT solutions, and the management of healthcare facilities.
  • continues to rely on imported medical equipment, Health IT, hospital building material, and architectural design and management consulting services because local suppliers are not able to offer the same range of products and solutions.
  • report by Espicom Business Intelligence shows that Vietnam imports approximately 90% of medical equipment. The market for medical equipment was valued at US$837 million in 2016 and is forecasted to reach US$1 billion in 2018. Roughly 30% of imported medical equipment is imaging diagnostics, including MRI, CT scanner, ultrasound, and X-ray equipment.

Main Competitors

Primary suppliers of medical devices for Vietnam include those from the U.S., Japan, Germany, Italy, the Netherlands, Korea, Taiwan, and China.

There are roughly 50 domestic firms who make approximately 600 products licensed by Ministry of Health. Their product lines include hospital beds, scalpels, cabinets, scissors, and consumables.

Registration Process/Import License

The Ministry of Health regulates the management of medical devices.

Decree 36/2016/ND-CP governs the classification, registration, import/export, manufacturing, sales and purchases, technical consultant services, testing, and professional calibration of medical device. This decree was issued on May 15, 2016 and took effect July 01, 2016.

Medical devices are classified into four groups based upon risk assessment: A (low risk), B (average-low risk), C (average-high risk), and D (high risk).

Medical devices need to be registered and issued a registration number before they are allowed into the country. A registration number is valid for five years. This registration requirement replaces the previously-used import license one.

Reimbursement

According to the Ministry of Health, approximately 99.5 percent of 48,547 healthcare establishments have connected their data with Vietnam’s Social Insurance Agency. Medical insurance coverage, as of the first quarter of 2017, is 81 percent and is predicted to reach 90 percent by 2020.

 

Barriers

Regulation on registration of medical devices and pharmaceuticals is cumbersome and time-consuming.

Procurement & Tenders

Prior to December 2016, municipal or provincial departments of health were responsible for the procurement of pharmaceuticals and medical devices. However, because of problems with this arrangement, the Government of Vietnam issued Resolution 112/NQ-CP that established the Centralized Pharmaceutical Procurement Center under the Ministry of Health. At the same time, some municipal or provincial governments, including HCMC government are decentralizing the procurement of medical devices to hospitals.

Trade Events

Vietnamese Government and Associations

Ministry of Health: http://moh.gov.vn/Pages/Index.aspx

Vietnam Medical Equipment Association: http://www.hoitbyt.vn/

Private Hospital Association http://hiephoibenhvientu.com.vn/

Hanoi Department of Health http://www.soyte.hanoi.gov.vn

HCMC Department of Health: http://www.medinet.hochiminhcity.gov.vn/

HCMC Medical Equipment Association: http://www.hoithietbiytetphcm.com/

FAQs

What do you recommend a U.S. manufacturer of medical device do as they consider selling to Vietnam?

They are recommended to first do some initial research on the market prospect for their device. Vietnam’s Country Commercial Guide is a great resource. Then it’s advisable for them to find a local distributor. They should conduct careful due diligence to make sure that they have the right distributor. This distributor should be able to educate them how to do business effectively and successfully in Vietnam, and proactively explore and pursue business opportunities.

How long does it take to register a medical device?

It typically takes 60 days.

Who can register a medical device in Vietnam?

Answer: It’s an authorized distributor or an official representative office of the manufacturer of the medical device.

U.S. Commercial Service Contact Information

Ms. Ngo Phuong, Commercial Specialist

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

Email: Ngo.Phuong@trade.gov

Mr. Triet Huynh, Sr. Commercial Specialist

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

Email: Triet.Huynh@trade.gov


Best Prospects

U.S. suppliers of healthcare products and services are widely known and favorably regarded by Vietnamese healthcare authorities, end-users, and distributors in Vietnam, due to innovative technologies, lifecycle cost efficiency, and professional customer service.

The medical device sector in Vietnam is expected to grow at an average rate of 7.9 percent per year from 2014 to 2019, and is projected to reach US$1 billion in 2019 from US$837 million in 2016 (Source: Espicom Business Intelligence). According to the HCMC Medical Equipment Association, Vietnam will still need to import approximately 90 percent of medical devices. From 2016 to 2020, Vietnam healthcare authorities and hospitals are predicted to have growing demand and more funding to buy medical devices to equip new hospitals and replace outdated and incompatible devices in the following sub-sectors:

  • Imaging diagnostics
  • Cancer treatment
  • Surgical devices
  • Devices for operating theaters
  • Intensive care unit equipment
  • Test kits

The sub-sector of Health IT also presents growing opportunities and holds high potential for U.S. suppliers of IT hardware and Electronic Health Record software. A report of International Data Corporation shows that expenditure on Health IT was estimated at US$20 million in 2015 with the growth rate of 11.1 percent over 2014.

In addition, the growing healthcare sector in Vietnam provides opportunities to U.S. suppliers of design, engineering and management services, and medical training services since local suppliers are still new to these sub-sectors, and are not yet able to provide the same level of sophisticated services as international suppliers.

Finally, the sub-sector of specialty building materials for healthcare facilities will also provide significant opportunities as Vietnamese healthcare authorities and hospital administrators have come to better understand and appreciate the benefits of building operationally efficient facilities.

Market Size

Healthcare spending (including investment)

 
 

6.58 as percent of GDP

Hospitals, Procedures, Healthcare Professionals

Number of hospitals

 

…Public

1068

…Private

268

Number of hospital beds:

300,000

Demographics

Population:

95 million

Life expectancy men/women:

70.9 years/76.2 years

Infant mortality:

17.8 deaths/1,000 live births

Percent of population older than 65:

6 percent


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