Vietnam has a strong medical background, and the Government has had proper attention in healthcare sector, resulting in great achievements in healthcare and medical services in the past decades, especially in the recent years. These medical achievements are mainly in 11sectors: organ transplants, cardiovascular/oncology interventions, endoscopic surgery, intervention trauma/orthopedic applications cells principal, assisted reproduction, ophthalmology, traditional medicine, vaccine production/biological, pharmaceuticals and technology transfer.

Besides that, the realization of projects regarding the healthcare market in Vietnam meets several regulatory challenges, for example when foreigners wish to invest in medical institutions or import medical products. The Government have given interested investors an overview of the most important legal aspects that introduces Vietnam’s rapidly growing healthcare market, foreign investment in medical and dental institutions, and regulations on medical equipment and pharmaceuticals in Vietnam.

Over the years, Vietnam has made considerable efforts to ensure access to quality healthcare services for the entire population by upgrading its health system, expanding insurance coverage and increasing state spending in this sector. Examples of central policies in the past are the introduction of user fees, the legalization of private medical practices (1989), the initiation of public health insurance schemes at the national level (1992) and the central government takeover of the responsibility to pay salaries to public health staff at commune level (1994).

Currently, Vietnam spends almost 7% of its GDP on healthcare. This is almost twice what India spends and not much less than the 9% spent by much richer Japan of its GDP on healthcare. Vietnam’s healthcare services and pharmaceuticals markets were worth $10.6 and $3.3 billion respectively in 2013, plus, an annual nominal growth rate of approximately 15 per cent until 2018 for both is expected. According to the World Health Organization (WHO), Vietnam has a population of 93,448,000 people in 2015. The growth rate is about 1% per year, which equals roughly a million births per year.

The combination of rapid economic growth, upgrade of the healthcare system and a growing population make Vietnam’s healthcare market interesting to invest in. As the demand for better healthcare is increasing from a population that is becoming wealthier, there are many challenges to Vietnam’s healthcare market that foreign investors aim to address through their involvement. Therefore, it remains important to keep an eye on this flourishing market and stay updated on this field.

According to Vietnam’s WTO commitments, there are no limitations in market access for foreign investors in the hospital, medical and dental services in cross border supply and consumption abroad. Considering commercial presence in Vietnam, foreign service suppliers are permitted to provide services through the establishment of 100% foreign-invested hospital, joint venture with Vietnamese partners or through business cooperation contract. Only certain minimum capital requirements apply in this field. The minimum investment capital for a commercial presence in hospital services should be at least US$20 million for a hospital, $2 million for a policlinic unit and $200,000 for a specialty unit.

The demand for imported medical equipment is growing. According to research by the Danish Embassy in Vietnam, demand is especially high for operating theatres; whereas, increased demand is expected for emergency equipment, sterilizing equipment, patient monitoring equipment and imaging diagnostic equipment such as CT scanners, color ultrasound machines, MRIs and X-ray machines.

Currently, the main medical device purchasers are government-funded hospitals, which account for 70% of the market and purchase equipment through bidding. The regulation of Vietnam’s medical devices falls under the Department of Medical Equipment and Health Works (DMEHW) within the Ministry of Health (MOH). Locally manufactured medical devices are regulated by the Ministry of Science and Technology (MOST).

Hospitals in Vietnam mostly purchase pharmaceuticals through bidding, which is subject to a price ceiling per medicament set by the regional health department. Foreign investors are prohibited from distributing pharmaceuticals and should cooperate with a domestic wholesaler. Approximately 60% of pharmaceutical end products, 90% of active pharmaceutical ingredients, and most raw materials for the production of pharmaceuticals are currently imported. Foreign enterprises are responsible for an estimated 20% of domestic pharma production. Domestic clinical trials are required for marketing approval pertaining to pharmaceuticals that have not been made available in their country of origin for more than five years. This includes newly imported medical devices associated with new therapies or new functions. Imported biological products and new batches of vaccines should undergo quality testing by the National Institute for Control of Vaccine and Biologicals. The capacity for such trials and tests is very limited, which causes delays. Furthermore, approvals are valid for five years. Lastly, pharmaceuticals require a free sales certificate, GMP certification and authorized letter, plus certificate of analysis and samples. Imported goods additionally require a certificate of pharmaceutical product (CPP) from the country of manufacture or packaging.