Vietnam's Rehabilitation & Healthcare Markets Remain Untapped
In line with its growing economy, Vietnam’s health spending is the highest in the region, accounting for 7.2 percent of its gross domestic product (GDP). However, the rehabilitation market remains nascent. For industry players looking to enter this emerging market, we take a closer look at the nation’s potential.
Demand outstrips supply Owing to limited investment in healthcare in the past, Vietnam faces challenges, including: ● High death rates of preventable chronic diseases, such as cancer and type 2 diabetes ● Lack of rehabilitation facilities for veterans of the Vietnam War ● Limited access to healthcare in rural areas, with less than 60 percent of the total population covered under the current healthcare system ● Fragmented medical technology sector, with over 90 percent of medical devices being imported |
With Vietnamese life expectancy reaching a record high of 75 years for people born after 1975, the demand for healthcare significantly exceeds supply. The public healthcare sector is overloaded, while private healthcare has grown more than 240 percent.
Government efforts in healthcare
The Vietnamese government is addressing these issues by investing US$25 billion in the healthcare system by 2020, including improving public health insurance coverage, providing more access to medication, reinforcing hospital service, and investing in e-health systems. For instance, a recent project to digitalize healthcare records for Vietnamese citizens is expected draw foreign investment for healthcare management platforms and healthcare information technology (IT) business.
What’s more, the nation’s trade participation in the Association of Southeast Asian Nations (ASEAN) Economic Community and Trans-Pacific Partnership have attracted business. Vietnam, located in the middle of the Pacific Ocean and the ASEAN members, is a regional emerging market. With foreign funds flowing into the market, Vietnam’s healthcare market is expected to soar over the next decade.
New regulations open door to foreign makers
For international firms, the regulation Decree 36, introduced May 2015 and effective on July 2016, was a game changer. Two major differences were the synchronization of medical device classifications with ASEAN regulations and the progress of Marketing Authorized (MA) Licenses.
Before Decree 36, foreign makers were required to apply for MA Licenses for each shipment. Nowadays, foreign makers can apply for MA Licenses directly from their representative offices in Vietnam. The new regulations give device makers improved efficiency for time, money and labour.
Increased demand for medical devices in early diagnosis and health management
In line with the development of IT and information communication technology in Vietnam, over 22 million people have adopted mobile technologies in their daily lives, accounting for one-fifth of the population. This number is expected to increase over time. Vietnamese consumers have high acceptance for wearable devices to monitor health and chronic diseases. Users of such devices consider medical equipment and devices offering early diagnosis to reduce treatment cost in the long run, especially general health and chronic diseases such as cancer, type 2 diabetes and heart disease.
The current market demand is high for medical devices related to cardiovascular disease, liver cancer, diabetes and orthopedics.
A number of suppliers have entered the personal medical device market, bringing international standards to the field. They include Accu-Chek, Beurer, Boso, Johnson & Johnson, MaxCare, Microlife, Rionet, Rossmax, Sanitas and Siemens.
Some suppliers have established operations in Vietnam to manufacture medical devices. For instance, Swiss provider Sonova has expanded with two branches in Vietnam, investing more than $10 million a year to produce over 5 million assistive hearing devices for local distribution and regional export.
Vietnam holds potential for international makers and channel players in healthcare with growing demand from the government, the private sector and citizens. Not only can we expect more foreign investment into Vietnam’s healthcare industry, we see industry providers establish Vietnam as a stepping stone for development in ASEAN and the Asia Pacific region.
Government efforts in healthcare
The Vietnamese government is addressing these issues by investing US$25 billion in the healthcare system by 2020, including improving public health insurance coverage, providing more access to medication, reinforcing hospital service, and investing in e-health systems. For instance, a recent project to digitalize healthcare records for Vietnamese citizens is expected draw foreign investment for healthcare management platforms and healthcare information technology (IT) business.
What’s more, the nation’s trade participation in the Association of Southeast Asian Nations (ASEAN) Economic Community and Trans-Pacific Partnership have attracted business. Vietnam, located in the middle of the Pacific Ocean and the ASEAN members, is a regional emerging market. With foreign funds flowing into the market, Vietnam’s healthcare market is expected to soar over the next decade.
New regulations open door to foreign makers
For international firms, the regulation Decree 36, introduced May 2015 and effective on July 2016, was a game changer. Two major differences were the synchronization of medical device classifications with ASEAN regulations and the progress of Marketing Authorized (MA) Licenses.
Before Decree 36, foreign makers were required to apply for MA Licenses for each shipment. Nowadays, foreign makers can apply for MA Licenses directly from their representative offices in Vietnam. The new regulations give device makers improved efficiency for time, money and labour.
Increased demand for medical devices in early diagnosis and health management
In line with the development of IT and information communication technology in Vietnam, over 22 million people have adopted mobile technologies in their daily lives, accounting for one-fifth of the population. This number is expected to increase over time. Vietnamese consumers have high acceptance for wearable devices to monitor health and chronic diseases. Users of such devices consider medical equipment and devices offering early diagnosis to reduce treatment cost in the long run, especially general health and chronic diseases such as cancer, type 2 diabetes and heart disease.
The current market demand is high for medical devices related to cardiovascular disease, liver cancer, diabetes and orthopedics.
A number of suppliers have entered the personal medical device market, bringing international standards to the field. They include Accu-Chek, Beurer, Boso, Johnson & Johnson, MaxCare, Microlife, Rionet, Rossmax, Sanitas and Siemens.
Some suppliers have established operations in Vietnam to manufacture medical devices. For instance, Swiss provider Sonova has expanded with two branches in Vietnam, investing more than $10 million a year to produce over 5 million assistive hearing devices for local distribution and regional export.
Vietnam holds potential for international makers and channel players in healthcare with growing demand from the government, the private sector and citizens. Not only can we expect more foreign investment into Vietnam’s healthcare industry, we see industry providers establish Vietnam as a stepping stone for development in ASEAN and the Asia Pacific region.