VIETNAM: ZERO CORONAVIRUS DEATHS

Greater demand for healthcare services combined with strained government public resources provide opportunities for a growing healthcare industry in Vietnam.

Bạn đang xem: Vietnam: zero coronavirus deaths

The EVFTA & the amended Law on Investment will benefit foreign producers and suppliers wishing lớn enter the Vietnamese market, which still largely relies on imported medical equipment và medicines. COVID-19 has accelerated created greater demand for technology-enabled services, a phenomenon that is likely to continue in the next decades with the arrival of Industry 4.0 innovations.

Vietnam is currently undergoing economic and demographic transformations that provide great potential for its healthcare industry. In 2019, Vietnam’s healthcare expenditure was approximately US$17 billion, equivalent lớn 6.6 percent of its GDP according lớn Fitch Solutions. The firm also expects that healthcare spending will reach US$23 billion in 2022 at a compound annual growth rate (CAGR) of 10.7 percent.

The COVID-19 outbreak certainly dampened economic activity in Vietnam, but it is unlikely to reverse ongoing socioeconomic changes. Rather, health stands firmly as the top priority và concern for both the Vietnamese people and the government.

We provide an overview of the opportunities for the healthcare industry in light of the current developments in Vietnam & survey three key sub-sectors: medical equipment and devices, pharmaceuticals, and digital healthcare.

Changes in society create opportunities & challenges

Fast-growing middle class and aging population

The healthcare sector in Vietnam has a lot of potential due lớn the demographic và socioeconomic changes currently underway. Vietnam’s rapid economic development has boosted demand for higher chất lượng and specialized healthcare services, especially among the growing middle class.


Related services

The COVID-19 outbreak has proven that health is, và will certainly continue khổng lồ be, a priority for most Vietnamese. Moreover, growing concerns over food safety, pollution, và unsafe living and working conditions have also made people more willing khổng lồ spend on medicines và healthcare.

According khổng lồ the United Nations Population Fund (UNFPA), the country has entered the “aging phase” since 2011. It is expected that by 2038, 20 percent of Vietnamese people will be over 60 years old. As more women join the workforce, a declining fertility rate will accelerate the aging of the population, straining the social welfare system.

Expansion of health insurance and hospital system

Social health insurance is the main public financing method for healthcare in Vietnam. With 87 percent of the population currently covered under this scheme according khổng lồ the World Health Organization (WHO), the government continues lớn work towards achieving universal healthcare coverage.

Under a new document issued by the Ministry of Health (MoH), provincial departments of health & Vietnam Social Security branches are asked khổng lồ encourage participation in & implementation of health insurance across the country. The government has also recently mix new social insurance, employment insurance, và health insurance contribution rates that apply to both national & expatriate workers & employers.

To prevent overcrowding & ensure that both urban & local patients can access medical services, the government continues lớn finance the construction of new hospitals. Since public hospitals rely on a government budget, the country will need lớn mobilize various sources of investment to upgrade its medical facilities. Further, the healthcare system also suffers from a shortage of qualified physicians, especially those in specialized fields.

Meanwhile, private hospitals and clinics have sprung up in major cities khổng lồ cater lớn the middle-class segment.

To help it shoulder the burden of rising healthcare costs, the government is increasingly looking at investment from the private sector & international firms. These changes mean that there will be more business opportunities in the healthcare sector in Vietnam in the upcoming years.

Medical equipment và devices

In February 2020, the government enacted Resolution No.20/NQ-CP to license the export of fabric face masks­ in response lớn high demand from different markets such as the US, the EU, and Canada. This has helped local businesses, namely textile và garment workers who reported rising orders after the enactment of the resolution. Face masks are not the only products that have been sought after during the pandemic: ventilators, gloves, gowns, & testing kits from Vietnam have also been accepted around the world. As a result, Vietnam shipped a total of 1.37 billion medical face masks as per the General Statistics Office (GSO) in 2020. Facemasks were exported khổng lồ the US, the EU, Singapore, và South Korea among others

Although the MoH has predicted that the country’s medical equipment market will grow at a rate of 18 to trăng tròn percent from năm nhâm thìn to 2020, most medical equipment, however, needs lớn be imported. There are very few local manufacturers of sophisticated and specialized devices that meet international standards. In fact, more than 90 percent of medical equipment is imported from countries such as Japan, Germany, the US, China, & Singapore, while domestic enterprises account for only 10 percent of market share. 

In public hospitals across the country, there is a lack of sufficient equipment for surgery và intensive care units. Furthermore, the existing equipment is outdated và needs to lớn be replaced. As such, because local production cannot meet demand, the Vietnamese government encourages the import of medical equipment by setting low import duties và no quota restrictions.

Medical device producers can look forward khổng lồ opportunities created by trade agreements such as the European Union Vietnam không lấy phí Trade Agreement (EVFTA). Improvements in regulatory standards, exchange of information on customs requirements, và the simplification of customs procedures are a few of the anticipated benefits from the implementation of the EVFTA.

Xem thêm:

Pharmaceuticals

Although the government aims to lớn increase the giới thiệu of locally produced pharmaceuticals to lớn 80 percent, an average of 55 percent of medicines in Vietnam are imported every year. One of the reasons for Vietnam’s reliance on imports is that most domestic companies lack research & development capabilities, & do not meet the European Union Good Manufacturing Practice (EU-GMP) or Pharmaceutical Inspection Co-operation Scheme Good Manufacturing Practice (PIC/S-GMP) standards required to manufacture high-quality generic drugs.

Further, Vietnam imports more than 90 percent of drug inputs, half of which are from China. With the closure of many Chinese factories due to environmental concerns, the price of raw materials has surged, decreasing the profit margins of Vietnamese companies.

The implementation of the EVFTA will remove tariffs for pharmaceutical products from the EU, và allow foreign companies to import and sell pharmaceuticals khổng lồ Vietnamese distributors và wholesalers.

Currently, there are only two multinational companies, Sanofi-Aventis (France) và AstraZeneca (Britain-Sweden), that have medicine import licenses. Although the presence of more foreign pharmaceutical companies will improve the supply of high-quality medicines, domestic companies may be negatively affected by the increased foreign competition.

Seventy percent of drugs in Vietnam are sold through hospitals, while the remaining 30 percent comes from pharmacies. The growing number of private hospitals & a greater concern for health among the public has led lớn an increasing demand for drugs.

Buoyed by increasing demand for medicine amid the COVID-19 pandemic, pharmaceutical companies registered positive results in the first quarter of 2020. The country’s largest pharmaceutical firm, DHG Pharmaceutical Joint Stock Company had a US$5 million profit, which represented a 31 percent year-on-year increase.

Other major firms also saw their profits going up from the same period last year. While it’s clear that the pandemic benefitted the pharmaceutical industry in the short term, firms may have khổng lồ consider diversifying và importing raw materials from other regions rather than đài loan trung quốc in case a similar pandemic strikes again.

Hospital system

The hospital network in Vietnam is fairly extensive. There is a total of 1,531 hospitals, 86 percent of which are public & 14 percent are private mostly concentrated in major urban areas such as Ho chi Minh City, Hanoi, và Da Nang. The 1,318 public hospitals are administered in a decentralized system, classified at the central, provincial, and district or commune level.

Though the system is well-established, Vietnamese hospitals are facing a number of important challenges. Most public hospitals in the country were built more than two decades ago và need to be upgraded.

*

Hospitals also face an overcrowding issue. The beds-to-inhabitants ratio, or bed occupancy rate in Vietnam far exceeds the threshold occupancy rate of 80 percent recommended by the World Health Organization (WHO).

Adding lớn the problem is the inequality of care: patients would rather get treated in overcrowded national cấp độ hospitals than provincial or district màn chơi ones due lớn the availability of higher quality medical equipment and staff in the former. Meanwhile, doctors và nurses have lớn tend to lớn a large number of patients, working long hours under stressful conditions with relatively low wages.

Thus, the Vietnamese hospital system needs an upgrade to its facilities, equipment, & services. The current gaps create opportunities for foreign investment in the construction & management of infrastructure facilities, medical equipment, and vocational training.

Digital healthcare

In light of the current challenges faced by public hospitals in Vietnam và the COVID-19 pandemic, the digital healthcare sector holds a lot of promise.

On April 18, 2020, the MoH in coordination with the Ministry of Information and Communications (MIC) launched a telemedicine program. Developed by Viettel Group, the country’s largest telecommunications service company, the program provides remote healthcare services by connecting patients và doctors through a virtual platform. With 70 percent of the Vietnamese population living in a rural or remote area, telehealth will help improve access to unique healthcare while reducing its costs.

The private sector was also quick lớn take advantage of the shift towards technology-enabled healthcare services. Many start-ups already present in Vietnam before the COVID-19 outbreak have expanded and optimized their operations.