Healthcare & Medical Technologies Vietnam Market Study
MARCH 2019
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EU Business Avenues in South East Asia
Central Management Unit
Vietnam Market Study
March 2019
Submitted to the European Commission on 12 March 2019
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Table of Contents
LIST OF FIGURES ...... 6
LIST OF TABLES ...... 7
TABLE OF ABBREVIATIONS ...... 8
1. EXECUTIVE SUMMARY ...... 9
2. WHAT ARE THE CHARACTERISTICS OF VIETNAM? ...... 14 2.1. POLITICAL OVERVIEW ...... 15 2.2. ECONOMIC OVERVIEW ...... 15 2.3. TRADE OVERVIEW ...... 16 2.4. MARKET ACCESS ...... 18 2.5. BUSINESS AND COMPETITIVE ENVIRONMENT ...... 18
3. MARKET OVERVIEW & EU ENTRY OPPORTUNITIES IN VIETNAM...... 20 3.1 THE VIETNAMESE HEALTHCARE & MEDICAL TECHNOLOGIES SECTOR ...... 20 3.1.1 The Vietnamese Healthcare System ...... 20 3.1.2 The Public Healthcare Infrastructure ...... 22 3.1.3 Research & Development ...... 27 3.1.4 Key Associations ...... 28 3.1.5 Entry Strategies ...... 29 3.1.6 Challenges & Entry Barriers ...... 30 3.2 ASSISTIVE TECHNOLOGIES ...... 31 3.2.1 Market Overview ...... 31 3.2.2 EU Entry Opportunities ...... 36 3.3 MEDICAL EQUIPMENT ...... 40 3.3.1 Market Overview ...... 40 3.3.2 EU Entry Opportunities ...... 44 3.4 ICT FOR HEALTHCARE ...... 49 3.4.1 Market Overview ...... 49 3.4.2 EU Entry Opportunities ...... 54 3.5 TELEMEDICINE AND REMOTE HEALTH MONITORING ...... 58 3.5.1 Market Overview ...... 58 3.5.2 EU Entry Opportunities ...... 62 3.6 NANOTECHNOLOGY HEALTHCARE ...... 65 3.6.1 Market Overview ...... 65 3.6.2 EU Entry Opportunities ...... 68
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3.7 LIFE SCIENCE AND BIOTECHNOLOGY FOR HEALTH ...... 69 3.7.1 Market Overview ...... 69 3.7.2 EU Entry Opportunities ...... 73 3.8 RESEARCH & DEVELOPMENT TECHNOLOGIES AND SERVICES ...... 75 3.8.1 Market Overview ...... 75 3.8.2 EU Entry Opportunities ...... 79 3.9 DENTAL PRODUCTS ...... 84 3.9.1 Market Overview ...... 84 3.9.2 EU Entry Opportunities ...... 87
4. REGULATIONS ...... 91 4.1 GENERAL IMPORT PROCEDURES ...... 91 4.2 MEDICAL DEVICE IMPORT LICENCE ...... 92 4.3 MEDICAL DEVICE REGULATIONS ...... 93 4.4 GOVERNMENT TENDERS ...... 94
5. ANNEX ...... 98 5.1 LIST OF USEFUL CONTACTS ...... 98 5.2 STARTING A BUSINESS IN VIETNAM ...... 100 5.3 USEFUL STATISTICS ...... 103 5.4 BIBLIOGRAPHY ...... 108
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List of Figures
Figure 1: Map of Vietnam ...... 14 Figure 2: Top 10 causes of death in Vietnam in 2017 and percent change, 2007-2017 ...... 20 Figure 3: Overcrowding in a public hospital in Ho Chi Minh City ...... 21 Figure 4: Vietnam’s healthcare system ...... 23 Figure 5: Imports of medical equipment sorted by application ...... 32 Figure 6: A powered wheelchair from Harima ...... 35 Figure 7: Walkers from Kien Tuong ...... 35 Figure 8: The Department of Geriatrics in Hanoi Dong Da General Hospital ...... 36 Figure 9: Sonion’s factory in Vietnam ...... 38 Figure 10: Vulcan Augmentic’s “click & go” prosthetic arms ...... 39 Figure 11: Medical equipment market structure ...... 40 Figure 12: Doctors from Thanh Hoa Hospital being trained under the Satellite Hospital Project ..... 42 Figure 13: The AMDD creates opportunities in the ASEAN Market ...... 43 Figure 14: Danameco’s product range is typical of local medical device manufacturers ...... 44 Figure 15: Novaerus’ airborne pathogen control technology ...... 48 Figure 16: Training course for Vietnamese healthcare workers on digital systems ...... 49 Figure 17: FPT eHospital is a comprehensive hospital management system ...... 53 Figure 18: Telemedicine solutions at the Quang Ninh Department of Health...... 59 Figure 19: CLAS Healthcare developed an app called BacSi24x7 ...... 61 Figure 20: Medcubes’ telehealth MedCase ...... 63 Figure 21: PARSYS Télémédecine’s telecardia station ...... 64 Figure 22: Scientists spent three years producing the turmeric-based nano-drug ...... 66 Figure 23: Carbon nanotubes with medical applications ...... 67 Figure 24: Biotechnology in Vietnam is focused on agricultural applications ...... 69 Figure 25: Biotechnology Centre of HCMC and RMIT MOU Signing Ceremony ...... 71 Figure 26: Nhi Đồng Hospital overloaded with HMFD patients ...... 76 Figure 27: Clinical research in Vietnam ...... 78 Figure 28: IONYX endodontic products ...... 88 Figure 29: Kohler dental instruments ...... 90 Figure 30: Registration process in Vietnam ...... 94
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List of Tables
Table 1: Key indicators...... 15 Table 2: Ease of doing business in Vietnam ...... 19 Table 3: Insurance coverage types ...... 25 Table 4: Imports of Instruments and Appliances Used in Dental Sciences (HS Code 901849) ...... 86 Table 5: Imports of Instruments and Appliances Used In Medical, Surgical, Dental or Veterinary Sciences (HS Code 9018) ...... 103 Table 6: Imports of Electro-cardiographs (HS Code 901811) ...... 103 Table 7: Imports of Ultrasonic Scanning Apparatus (HS Code 901812) ...... 104 Table 8: Imports of Magnetic Resonance Imaging Apparatus (HS Code 901813) ...... 104 Table 9: Imports of Electro-diagnostic Apparatus (HS Code 901819) ...... 105 Table 10: Imports of Syringes (HS Code 901831) ...... 105 Table 11: Imports of Needles, Catheters, Cannulae and Similar (HS Code 901839) ...... 106 Table 12: Imports of Instruments and Appliances Used in Dental Sciences (HS Code 901849) ... 106 Table 13: Imports of Ophthalmic Instruments and Appliances (HS Code 901850) ...... 107
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Table of Abbreviations
AMDD ASEAN Medical Device Directive ASEAN Association of South East Asian Nations BI Dashboard Business Information Dashboard CAGR Compound Annual Growth Rate CTU Clinical Trial Unit DNA Deoxyribonucleic Acid ECG Electrocardiogram EMR Electronic Medical Record EPZ Export Processing Zones EVFTA European Vietnam Free Trade Agreement FTA Free Trade Agreement GDP Gross Domestic Product HIS Hospital Information System HIV human immunodeficiency virus HMIS Health Management Information System HMFD Hand-Foot-and-Mouth Disease ICT Information & Communications Technology IOL Intraocular lens IT Information Technology IZ Industrial Zones JE Japanese encephalitis LIS Laboratory Information System MoH Ministry of Health MoU Memorandum of Understanding NCD Non-communicable diseases NGO Non-governmental Organisation O&P Orthotists and Prosthetists PACS Picture Archiving and Communication System PCTA Percutaneous Transluminal Coronary Angioplasty PHR Patient Health Record POC Point-of-Care R&D Research & Development TB Tuberculosis VND Vietnamese Dong
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1. Executive Summary
Economic growth and demographic changes are driving demand for Healthcare & Medical Technologies in Vietnam. It is estimated that in 2018, the market value was approximately EUR 1.2 billion. Over 95% of the medical device market in Vietnam is made up of foreign goods, with an increasing number of foreign companies entering the market. The steady influx of investments and increasingly liberal government policies have triggered shifts in the entire healthcare system. Today, the Vietnamese Healthcare & Medical Technologies market is considered one of the fastest growing in Asia.
Assistive Technologies
An estimated 500,000 amputees are currently living in Vietnam, with an additional 2,000 men, women and children losing limbs each year due to the 2.2 million unexploded ordnance and landmines left over from the Vietnam War. This has led to a growing demand for assistive devices such as lower limb prostheses and orthoses in the country. Rapid demographic changes, as its population ages, as well as functional limitations among its older population, are also expected to boost the demand for assistive devices, in particular devices that are easy to use, safe and cost effective.
Medical Equipment
Vietnam’s healthcare industry is highly reliant on the import of medical devices. There is strong domestic demand – the value of imported medical devices has seen sustainable growth in the recent past, with annual imports surpassing US$ 1 billion (EUR 0.88 billion) in 2017. In the coming years, an estimated 20 million Vietnamese are expected to be suffering from some form of chronic illness such as heart and respiratory conditions. Various factors suggest that the medical equipment sector has strong growth prospects in Vietnam – from a growing burden of chronic and lifestyle diseases, a prevalence of infectious diseases such as malaria and tuberculosis, an increasing affluent and discerning population that is demanding better healthcare, as well as a strong commitment by the Vietnamese government to upgrade the existing healthcare facilities.
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ICT for Healthcare
The Vietnamese government has put ICT high on the development agenda. It is interested in innovative ICT healthcare applications that help deliver seamless care and effective treatment plans, as well as help people to manage their health better, stay out of hospitals, and ease the load on its overburdened healthcare system. In recent years, the government has focused on applying digital tools into management and operations in the healthcare sector. Digital tools are expected to be the foundation for a complete digitalisation in the next few years, with an expected high adoption of Hospital Information System (HIS) as well as Laboratory Information System (LIS), integrated Radiology Information System (RIS), Picture Archiving and Communication System (PACS), and Electronic Medical Record (EMR).
Telemedicine and Remote Health Monitoring
Vietnam’s urban, hospital-centric healthcare delivery model has to address the health needs of almost 100 million people, many of whom are based in the country with almost no physical access to doctors or nurses. The government has turned to technology to address the problem of regional disparities within the healthcare system. In the healthcare and medical technologies sector, the focus of the innovation is distributed care via cloud and telehealth. Its goal is to build an integrated, large-scale, telehealth-based system, which can be run from the urban centres, and deliver high levels of care to the rural regions.
Nanotechnology Healthcare
The nanotechnology market in Vietnam is still very new, but the growing recognition of its utility is driving interest in the country. Presently, utilisation of nanotechnologies is mainly concentrated in R&D institutes and in various top universities. However, the country is increasingly showing interest to explore potential applications of nanotechnology within commercial spaces, including those in the medical and healthcare sector. A recent breakthrough was the successful application of nanotechnology to produce nano curcumin, a substance to help with the treatment of cancer.
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Life Science and Biotechnology for Health
Over the last two decades, Vietnam’s biomanufacturing industry has seen major improvements, with many domestic enterprises satisfying ASEAN Good Manufacturing Practice (GMP) standards for producing quality medicines for domestic use and export. The country, which has a number of biotechnology research centres, has recognised that biotechnology has the potential to address its various healthcare issues, from infectious diseases such as influenza, malaria and tuberculosis, to rising rates of chronic illnesses such as diabetes or cancer. In particular, it has developed a flourishing vaccine manufacturing industry, which export vaccines to countries in the region and around the world. It is looking to develop the medical biotech sector further.
Research & Development Technologies and Services
In Vietnam, the field of clinical research is new but fast developing – led largely by foreign clinical research companies that have established a foothold in the country. While the majority of Vietnamese pharmaceutical companies tend to produce generic drugs, and thus do not need to undertake clinical trials, the potential lies in undertaking clinical trials for new drugs being introduced by foreign companies into the market. The growth in the market has positively impacted the demand for advanced laboratory and clinic equipment and information systems for research, diagnostics and treatment.
Dental Products
Vietnam is positioning itself to be the global leader in advanced dental services through government-provided financial and logistical support. The sub-sector is driven largely by dental tourism, with the market expected to grow to an estimated 250,000 dental tourists per year by 2023. It markets itself as a leader in dental tourism, and showcases dental facilities equipped with state-of-the-art imported advanced technology, staffed with well-trained experts. Currently, the market is largely dependent on imports with limited domestic manufacturing capabilities, which allows European companies to reap the benefits of the expanding demand for dental products and equipment.
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Opportunities
The vibrant and dynamic Vietnamese healthcare and medical technologies market offers a number of lucrative business opportunities. European companies can target four main classes of healthcare and medical technology purchasers in Vietnam1:
◼ Government-funded hospitals, clinics and healthcare centres: These are key buyers, being funded by the government, and accounting for 70% of the total demand for medical equipment. These buyers often buy high-quality medical devices, and would be open to purchasing products that are made in Europe.
◼ Local private hospitals: These are expected to show the strongest growth, particularly as the government looking to optimise the healthcare network and to unburden the large national level hospitals by supporting the creation of new private hospitals and the improvement of existing ones.
◼ Foreign-owned hospitals and clinics: These are large purchasers, however, in some cases, they may prefer to purchase equipment from their country of origin.
◼ Medical education and research institutions: These organisations work on projects that use the latest technologies and systems, and would be open to new and innovative technologies from Europe.
Opportunities in the Healthcare & Medical Technologies sector in Vietnam are to be found in the following areas:
Medical Equipment. Companies that manufacture and/or sell medical and dental equipment and devices have strong partnership opportunities. The Vietnamese government strongly encourages the import of medical equipment and has lowered import duties and removed quota restrictions.
1 https://www.export.gov/article?id=Vietnam-Healthcare
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Many existing public hospitals currently need to upgrade medical equipment to stay abreast of newest technology and trends in global healthcare. Strong areas of growth include:
◼ Medical equipment, such as orthopaedics, surgical equipment, sterilising equipment, monitoring equipment, diagnostic equipment such as CT scanners, ultrasound machines, MRIs, and X-ray machines, as well as laboratory equipment and dental equipment.
◼ Connected health products and/or equipment, to provide telecare, telehealth, telemedicine, mHealth, digital health and eHealth services. This is increasingly seen by the Vietnamese government as an integral part of the solution to many of the healthcare challenges it faces.
Healthcare Infrastructure. Companies involved in healthcare infrastructure, particularly for hospitals, will also find opportunities in Vietnam. The government has ambitious plans to build new hospitals, as well as expand or upgrade existing hospitals. Collaborations with foreign partners is strongly encouraged in this area, for example, the Hungarian government is assisting the Mekong Delta city of Can Tho in building a new 500-bed Can Tho Oncology Hospital, equipping it with modern equipment, and establishing an oncology training centre for the Mekong Delta region. The Vietnamese government has increased the national healthcare budget to invest in medical infrastructure and public hospitals. Total expenditure in healthcare infrastructure is projected to grow at a CAGR of 9.5%.
Private Healthcare Sector Investment. Private healthcare expenditure is expected to grow at a CAGR of 7.5%. The government’s new masterplan is encouraging the creation of privately funded hospitals and clinics. This new private healthcare infrastructure is positioned to service the high- end segment. This is a key opportunity for companies that are able to provide advanced healthcare technologies such as patient data analytics and IoT for health.
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2. What are the characteristics of Vietnam?
Vietnam is a developing country located on the eastern coast of the Indochina Peninsula. Strategically located with China in the north and Malaysia and Indonesia in the south, it provides excellent access to the East Sea, one of the world’s major shipping routes. Approximately 40% of cargo transported from the Indian Ocean to the Pacific crosses the East Sea before arriving in China, Japan, South Korea and the US.
With a land area of approximately 330,951 km2 and a coastline of 3,444 km, Vietnam comes with abundant natural resources.
Hanoi, the capital of Vietnam, is located in the north of the country, whereas Ho Chi Minh City, the largest city in terms of population and economic activity, is situated in the south. Other major cities in Vietnam are Hai Phong, Da Nang, Nha Trang, Vung Tau, Binh Duong, and Can Tho.
In terms of human capital, Vietnam has a large and young population of over 97 million, with a median age of around 30. It is the 15th most populous country in the world, the 8th in Asia, and the 3rd in South East Figure 1: Map of Vietnam Asia. Given its demographic advantage, the country Source: CIA World Factbook has the potential to become a particularly attractive consumer market.
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2.1. Political Overview
Vietnam has a socialist republic type of government with a constitution operating under the sole leadership of the Communist Party. Accordingly, the country's legal powers are centralised in one supreme body, the National Assembly, and are then delegated to lower bodies.
The National Assembly is vested with constitutional and legislative power. Meanwhile, the President, appointed by the National Assembly, is the head of the State and represents Vietnam in domestic and foreign affairs. The executive branch of the Vietnamese government, consisting of various ministries, is headed by the Prime Minister, who is elected by the National Assembly.
2.2. Economic Overview
The Vietnamese economy, valued at US$ 220.4 billion (EUR 194 billion) in 2017, grew by a robust 6.8% in 2018, making it one of the fastest growing markets in the world. The government has sought to open up the country to trade and investment – which are the key drivers of the economy. GDP is expected to grow by 7% in 2019, buoyed by robust domestic demand, and increases in exports, manufacturing and foreign investment. The country attracted a record level of FDI of US$ 17.5 billion (EUR 15.4 billion) in 2017, an 11% increase from 2016.
Main Indicators 2014 2015 2016 2017 2018 GDP (billion US$) 185.89 191.45 201.30 220.40 240.7 GDP (Annual% Change) 5.9 6.6 6.2 6.8 6.6 GDP per Capita (US$) 2,048 2,087 2,171 2,353 2,545 Inflation Rate (%) 4.1 0.6 2.7 3.5 3.8 Unemployment Rate (% of the Labour Force) 2.1 2.3 2.3 2.2 2.2 Table 1: Key indicators Source: International Monetary Fund (IMF)
Major industries in Vietnam include agriculture, automotive, oil & gas, textiles, food & beverage, furniture, and ICT. The service sector is the largest contributor to GDP with a 51.3% share, followed by the industrial sector (33.3%) and agriculture (15.3%).
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Vietnam's key policies are set every five years and adjusted twice a year. Currently, it is implementing its Socio-Economic Development Strategy 2011–2020, which focuses on structural reforms, environmental sustainability, social equity, as well as the emerging issues of macroeconomic stability. Its overall target is to make Vietnam a modern and industrialised nation by 2020, and it is working towards establishing itself as the industrial powerhouse of South East Asia.
Vietnam currently has approximately 300 industrial zones (IZs) and export processing zones (EPZs), which it hopes will spearhead the country’s growth.
Labour costs in Vietnam are among the lowest in Asia. Despite the low wages, the Vietnamese worker is perceived to have strong work ethics and quality awareness. The country has gained fame worldwide as a go-to place for export manufacturing, largely because of cheap labour.
2.3. Trade Overview
Vietnam has reported total import-export revenues of US$ 482.23 billion (EUR 424.5 billion) in 2018, an increase of 12.6% against 2017, including US$ 244.72 billion (EUR 215.4 billion) worth of export revenue, up 13.8%, and US$ 237.51 billion (EUR 209.1 billion) worth of import revenue, up 11.5%.
Vietnam’s major global exports include telephones, mobile phones and components, textiles and garments, computers, electrical products and spare parts, furniture, fruits and footwear. The top export destinations of Vietnam are the United States, China, Japan, South Korea and Germany.
Its primary global imports are machinery, equipment, tools and instruments, computers, electrical products, spare parts and components, fabrics, telephones, mobile phones and components. The top import origins of Vietnam are China, South Korea, Japan, Singapore and other Asian countries.
Vietnam has established diplomatic relations with over 180 countries and expanded trade relations with 230 countries and territories.
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Through its membership with ASEAN, Vietnam is party to various Free Trade Agreements (FTAs) with Australia, New Zealand, India, Japan, China and South Korea, among others. It has also signed direct FTAs with Chile, the Eurasian Economic Union (Belarus, Kazakhstan, Russian Federation, Armenia and the Kyrgyz Republic) and launched negotiations with various others, including the EU. It is also part of the revised Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), or TPP11.
Negotiations for an EU-Vietnam FTA were launched in June 2012. The EU considers the FTAs with individual ASEAN countries as stepping stones towards a regional agreement. On 1 February 2016, the text of the EU-Vietnam Free Trade Agreement was published, following the announcement of the conclusion of the negotiations.
In July 2018, the EU and Vietnam agreed on final texts for the EU-Vietnam Free Trade Agreement and the EU-Vietnam Investment Protection Agreement (IPA). The legal review of the negotiated texts will be followed by translation into the EU's official languages and Vietnamese. The European Commission has submitted the proposals for signature and conclusion of both agreements to the Council. Once authorised by the Council, the agreements will be signed and presented to the European Parliament for consent. After the Parliament's consent, the Council can conclude the trade agreement, and it can enter into force. The investment protection agreement will be ratified by Member States according to their national procedures.
Once in force, the agreements will provide opportunities to increase trade and support jobs and growth on both sides, through:
◼ Eliminating 99% of all tariffs
◼ Reducing regulatory barriers and overlapping red tape
◼ Ensuring protection of geographical indications
◼ Opening up services and public procurement markets
◼ Ensuring the enforceability of the agreed rules
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Vietnam has become the EU’s second most important trading partner in South East Asia, after Singapore. EU exports to Vietnam are dominated by high technology products including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products. Vietnam's key export items to the EU include telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture. The EU is also one of the largest foreign investors in Vietnam. In 2017, EU investors committed EUR 1.6 billion in Foreign Direct Investment, reaching a total investment stock of EUR 19.2 billion.
2.4. Market Access
A foreign entity may establish its presence in Vietnam as a limited liability company (LLC) with one or more members, a joint-stock company (JSC), a partnership, or a business cooperation contract. Depending on the size and the sector of investment, different licensing and registration procedures will be applied, namely investment registration and investment evaluation. Other facilities for business and investment in Vietnam include a branch office and a representative office. Foreign investors may also buy an interest in an existing domestic enterprise, subject in some cases to ownership limitations which vary depending on the relevant industry sector.
2.5. Business and Competitive Environment
Vietnam went down to 69th from 68th in the 2019 report of World Bank’s Doing Business Rank comparing 190 economies, despite the score increase from 66.77 points to 68.36 points. The South East Asian country posted improvements in four out of eleven areas, including Getting Electricity, Starting a Business, Registering Property, and Enforcing Contract.
Ease of Doing Business in Vietnam 2019 Rank 2018 Rank Change in Rank Starting a business 69 123 +54 Dealing with Construction Permits 21 20 -1 Getting Electricity 27 64 +37 Registering Property 60 63 +3 Getting Credit 32 29 -3 Protecting Minority Investors 89 81 -8
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Ease of Doing Business in Vietnam 2019 Rank 2018 Rank Change in Rank Paying Taxes 131 86 -45 Trading Across Borders 100 94 -6 Enforcing Contracts 62 66 +4 Resolving Insolvency 133 129 -4 Table 2: Ease of doing business in Vietnam Source: World Bank
Vietnam has taken steps to ensure that foreign investors are not disadvantaged compared with their local counterparts. The Vietnam Competition Administration of the Ministry of Industry and Trade (MOIT) is the competent body to review transactions for competition-related concerns.
The tax system in Vietnam consists of the following main taxes: corporate income tax, value- added tax, special contractor tax, environment protection tax, natural resources tax, special sales tax, personal income tax, and import–export duties. Foreign investors are exempt from import duties on goods imported for their own use and which cannot be procured locally.
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3. Market Overview & EU Entry Opportunities in Vietnam
3.1 The Vietnamese Healthcare & Medical Technologies Sector
3.1.1 The Vietnamese Healthcare System
In 2017, Vietnam spent an estimated 7.5% of the country’s GDP on healthcare, considerably higher than most of its counterparts in the region.
Rapid urbanisation as well as an increase of overall wealth and enhanced living standards in Vietnam have led to a rise in chronic and non-communicable diseases (NCDs) such as diabetes, cancer, cardiovascular diseases and mental disorders. It is estimated that up to 8 out of 10 deaths in Vietnam are from non-communicable diseases. The country has been successful in bringing down infant and maternal mortality rates, malnutrition and deaths from infectious diseases.
Figure 2: Top 10 causes of death in Vietnam in 2017 and percent change, 2007-2017 Source: Institute for Health Metrics and Evaluation
While infectious diseases such as tuberculosis and lower respiratory infections are seeing a decline, other major challenges need to be overcome, including the fight against new and re-emerging (infectious) diseases such as cholera, measles, dengue fever, HIV/AIDS, Avian flu, Japanese encephalitis, as well as hand, foot and mouth disease.
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Furthermore, despite being characterised by favourable demographics, Vietnam’s population is ageing rapidly. Therefore, it is expected that the incidence of chronic diseases such as cancer, diabetes, and Alzheimer’s disease will create additional pressure on the healthcare infrastructure.2
Vietnam’s healthcare system has a mixture of public and private elements. Most public healthcare services are located in Hanoi and Ho Chi Minh City. Urban hospitals operate at 200% or more of their full capacity during peak times because they attract patients from neighbouring provinces, while rural hospitals and health establishments are generally under-utilised.
Figure 3: Overcrowding in a public hospital in Ho Chi Minh City Source: Voice of Vietnam
Moreover, since the lifting of the ban on private practice in 1989, the private healthcare sector has grown significantly. According to a report from the Ministry of Health, Vietnam has 200 privately run hospitals – these cater to the emerging middle class and are quickly becoming the preferred choice of those who can afford a premium for better service and convenience.
2 https://www.flandersinvestmentandtrade.com/export/sites/trade/files/attachments/EVBN-EVBN-MEDICAL-DEVICES-2016.pdf https://www.rvo.nl/sites/default/files/Life-sciences-and-health-in-vietnam.pdf
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Since joining the World Trade Organisation in January 2007, Vietnam has eliminated import duties on over 90% of medical equipment. This has contributed largely to the influx of imported goods to Vietnam. In terms of manufacturing, many Japanese, American and European companies such as Terumo, Sonion, and United Healthcare have relocated their production facilities from China or other countries to Vietnam in order to take advantage of the low manufacturing costs and supportive policies. This trend extends to the medical devices industry and creates competition for domestic suppliers.
Vietnam also allows foreign investors to establish wholly foreign owned hospitals. There are no restrictions imposed on foreign qualified doctors to practice in the country, nor are there any restrictions on foreign backed insurers to offer healthcare plans. French and US companies have invested into hospitals in Vietnam, while companies based in Thailand (Bumrungrad Hospital), Indonesia (Lippo Group), Malaysia (IHH Healthcare, KPJ Healthcare), Singapore (Chandler Corporation, Parkway Holdings), India (Fortis Healthcare) and Canada (Triple Eye Infrastructure) are in early stages.
An increasingly large number of wealthy Vietnamese citizens travel abroad for medical treatment. It is currently estimated that every year US$ 2 billion (EUR 1.8 billion) is spent by over 40,000 Vietnamese patients travelling abroad for healthcare services, with Singapore, Thailand and Hong Kong being the most popular destinations for medical services.
3.1.2 The Public Healthcare Infrastructure
Since 2012, public healthcare expenditure has overtaken private healthcare expenditure, largely due to the government’s social health insurance programmes. According to a KPMG Vietnam webinar presentation called “Investing in Healthcare in Vietnam” (November 2017), public healthcare expenditure is predicted to grow at a CAGR of 9.5% from 2016 to 2021, while private healthcare expenditure will grow close to 7.5% in the same period. By 2021, public healthcare expenditure is expected to account for more than half of the total expenditure in Vietnam.
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Vietnam has a decentralised system where provinces, districts and communes are given autonomy to implement their own healthcare policies. The organisational structure of the hospital or healthcare system in Vietnam is divided into four groups:
◼ Central level – The Ministry of Health (MoH) is responsible for the healthcare sector for the government and manages several institutions including hospitals, research institutions, and universities. Other ministries also run their own network of hospitals.
◼ Central-affiliated province/city – At a province or city level, there are several hospitals and medical centres. In addition, they also have medical colleges offering medicine, nursing, and pharmacy programmes.
◼ District health centres mostly offer medical and preventive services.
◼ Commune health stations focus on primary healthcare services at a commune-level.
Figure 4: Vietnam’s healthcare system Source: World Health Organisation, Vietnam’s Ministry of Health, KPMG
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The figure above illustrates the structure of the public health system in Vietnam. The referral path is normally bottom-up, meaning that most primary healthcare services are delivered at the commune level, whereas national hospitals include specialised wards, such as Oncology.
In 2016, there were 1,346 hospitals in Vietnam, which included 1,161 public hospitals and 185 private hospitals. The government health departments in the provinces and cities manage close to 80% of the public hospitals, while the Ministry of Health, other government ministries and state- owned firms manage the rest. The total number of hospital beds increased from 209,485 in 2011 to 254,885 in 2016. The public sector accounted for 240,700 beds, while the private sector accounted for the remaining 14,185 beds.
The public health sector has limited abilities to cover all the needs of Vietnam’s growing population. Acknowledging the shortage, Vietnam’s government is now aiming to grow the number and size of private hospitals to account for 20% of the total bed capacity by 2020.3
Much of the existing medical equipment in public hospitals in Vietnam is currently outdated and needs replacement. Many hospitals lack sufficient equipment for surgery and intensive care units. Vietnamese public hospitals rely largely on state budget to upgrade their facilities, equipment and services.
Between 2013 and 2017, the growth of Vietnam’s healthcare expenditure per capita reached 26.78%, from US$ 112 in 2013 to US$ 142 in 2017, outpacing growth in GDP per capita.4 While Vietnam’s public healthcare expenditure is among the highest among South East Asia, it is still too low to meet the demands in the country. A shortage of qualified medical staff is common in many public hospitals. Doctors and nurses work under stressful conditions and wages are relatively low.
3 https://tapahtumat.tekes.fi/uploads/8c674776/Vietnam_My_Health_Tekes_20151116-2676.pdf 4 http://www.marketresearchvietnam.com/vietnams-healthcare-cost-challenge-actions-to-take/
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Public Insurance Scheme
Vietnam’s public insurance scheme provides coverage to around 75% of the population, and requires that a patient obtains lower-level hospital referral in order to get treated at higher-level hospitals (provincial or central hospitals). Otherwise, the patient is not entitled to a full reimbursement of the treatment expenses.
The applicable benefits depend largely on the category of the insured. Since the establishment of the co-payment system in 2010, not everyone who is insured received free medical consultation and treatment. Those who do not have 100% coverage have to make part payment directly to the hospital. The minimum coverage is 80% of the medical cost.
100% medical consultation 95% of medical consultation 80% of medical consultation and treatment costs and treatment costs and treatment costs Specialised technical officers Persons on pensions or monthly Other categories of the insured working allowance Specialised technical non- Capacity loss allowance commissioned officers Professional officers People on monthly social welfare allowance as prescribed by law Professional non-commissioned Poor household members officers Officers of the People's Public Ethnic minorities living in areas security with difficult or exceptionally difficult socio-economic condition Meritorious persons Children under 6
Table 3: Insurance coverage types Source: Vietnam Medical Device, 2016, EU-Vietnam Business Network (EVBN)
As the infrastructure and the skills of health-workers at the district and commune level are low, it is common for patients to skip district and commune facilities and get treatment at provincial and central hospitals directly, without referrals. Patients without referrals have to bear significant costs to travel and cover accommodation as well as a higher share of the cost of the treatment.
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Satellite Hospital Project (2013–2020)
The Satellite Hospital Project (2013–2020) evolved from the target to reduce the number of patients in higher level hospitals. This project aims to upgrade the technical capacity for examination and treatment in provincial hospitals designated as satellite hospitals through technical skills transfer by central or core hospitals. This project is expected to reduce the number of patients referred from provincial to central hospitals and alleviate the subsequent overload at central hospitals. Satellite and core hospitals are required to set out a development plan covering facilities, medical equipment, and human resources. The first phase of the project covered 2013 to 2015, and the second phase is from 2016 to 2020. Five specialties with very high bed occupancy rates were prioritised in the first phase: oncology, traumatology, cardiology, obstetrics, and paediatrics. During 2016–2020, more specialties will be added, including endocrinology, neurology, intensive care, haematology, and infection control.5
The main elements of the project are:
◼ To formulate and develop a network of satellite hospitals. The first phase, from 2013 to 2015, prioritised investment in 48 provincial hospitals as satellites of 14 core hospitals (eight owned by the Ministry of Health and six under the Department of Health Service of Ho Chi Minh City);
◼ To enhance the examination and treatment capacity of satellite hospitals via training, technical skills transfer, and tele-consultations using information technology (telemedicine);
◼ To invest in core and satellite hospitals to improve manpower, facilities, medical equipment, referral means, and information technology to ensure effective and sustainable transfer of techniques. Satellite hospitals are expected to perform and maintain the new techniques by themselves. They are also expected not to refer patients to core hospitals for these techniques except where they have insufficient capacity.
5 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5664805/#CR24
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3.1.3 Research & Development
Although still an emerging field in Vietnam, a search of ClinicalTrials.gov, an American database of privately and publicly funded clinical studies conducted around the world, uncovered over 120 clinical trials that included Vietnamese sites in some capacity. Considerable challenges must be overcome for Vietnam to emerge as a sustained, major research centre. There is still a lack of awareness about the clinical trials industry within Vietnam. Assistance levels from the Vietnamese Ministry of Health need to mature and deepen in capabilities, scope and breadth of support offerings. In some cases, medical providers may not possess the requisite facilities, capabilities or experience required of the global clinical research industry. Currently, only a small number of institutions and physicians participate in clinical research – there are just over 20 research centres and sites for a country of around 100 million people.6
The Vietnamese Ministry of Health oversees the following national research centres:
◼ National Hospital of Tropical Diseases. Located in Hanoi, the National Hospital of Tropical Diseases (NHTD) is the highest examination and treatment line for tropical diseases in Vietnam, specialising in rehabilitation of infectious and tropical diseases, health worker training, mentoring, disease prevention and scientific research. The hospital has 280 inpatient-beds with 7 function rooms, 5 clinics, 5 para-clinics and a training centre.
◼ The Hanoi-based National Institute for Hygiene and Epidemiology (NIHE) focuses on the prevention and control of communicable diseases. In addition to scientific research in epidemiology, medical microbiology, immunology, and molecular biology, it develops vaccines, conducts national programmes on infectious disease surveillance and control, public health training and education on both undergraduate and post-graduate levels.
◼ Founded in 1902 by the French, the Hanoi Medical University (HMU) is the oldest university in Vietnam. Today it is endowed with a Centre for Health System Research (CHSR), established through a grant from the Rockefeller Foundation and the China Medical Board.
6 https://www.trialsitenews.com/the-state-of-clinical-research-in-vietnam/
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◼ The Vietnam National Children's Hospital (VNCH) is a medical facility in Hanoi. VNCH is the national centre for scientific research and training in paediatrics.
◼ National Lung Hospital. Based in Hanoi, the centre specialises in pneumology. The health establishment has been collaborating with the French-Vietnamese Association of Pneumology for the past decade, gaining valuable expertise from leading lung experts from France.
3.1.4 Key Associations
Vietnam Medical Equipment Association (VIMEAS)
VIMEAS is a professional association of organisations and individuals working in the field of medical equipment and technology. These organisations and individuals join with each other on the voluntary basis to organise and develop the medical equipment sector of Vietnam, to contribute to rapid application of medical techniques into disease diagnosis, treatment and prevention as well as community healthcare, to disseminate information, to exchange documents and experiences in research, production, installation, maintenance and repair of medical equipment.
Vietnam Tourism Dentistry Association
The Vietnam Tourism Dentistry Association oversees 23 independent clinics across the country. The association targets to achieve a third of the tourist population visiting Vietnam for dental tourism by 2020, and it is an active player in promoting the local industry. In 2018, the association launched a new website (https://dentaltourism.vn) which provides information on leading dental services as well as a list of dental clinics with modern facilities and international qualified dentists who offer a full range of dental services.
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3.1.5 Entry Strategies
Currently, distribution of medical devices is still restricted for foreign companies in Vietnam. Since only local companies can distribute medical devices in Vietnam, foreign companies must sell their products through appointed local distributors or agents. The agents provide immediate access to an established marketing network and in-depth knowledge about the regulatory framework. Buyers and end-users, especially in the public sector, usually expect a local representative to handle all aspects of the distribution, from delivery to after-sales service and stocking spare parts. Consequently, EU companies are advised to have a local partner with strong technical skills and good connections with the MoH, hospitals and other healthcare facilities.7
Another way for foreign companies to enter the market is to set up a representative office in Vietnam. Since only local companies are allowed to distribute medical devices in Vietnam, a representative office can only import products and sell them to a local distributor. To set up a representative office, the foreign company must obtain a business license from the Department of Industry and Trade in the province/city, which is valid for five years.
Crucially, the entering into force of the EU-Vietnam Free Trade Agreement (EVFTA) will allow EU investors to engage more deeply in the Vietnamese market, for the first time. Currently, foreign firms are not permitted to engage in bidding activities for government-funded projects. Under the terms of the EVFTA, European companies will be able to bid for public procurement contracts in Vietnam under the same conditions as Vietnamese companies, for a selective number of entities.
Vietnam has committed to give EU suppliers the right to bid for up to 50% of the pharmaceutical purchases by the Ministry of Health and many of the hospitals under its control, as well as major research facilities. However, this is a very gradual process over a period of 15 years after the FTA comes into effect. The right to participate in Vietnam’s public tenders will initially be limited to relatively high-value contracts – those worth at least US$ 2.1 million (EUR 1.8 million) or US$ 4.2 million (EUR 3.7 million) depending on the procurement agency.8
7 https://www.flandersinvestmentandtrade.com/export/sites/trade/files/attachments/EVBN-EVBN-MEDICAL-DEVICES-2016.pdf 8 https://english.vietnamnet.vn/fms/business/210352/vietnam-to-open-public-procurement-market-for-foreign-investors.html
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EU companies are also encouraged to take part in exhibitions to showcase their products to potential buyers. The largest event in Vietnam, which has a 15-year history, is the Vietnam Medi Pharm Expo. The annual event takes place twice a year in Ho Chi Minh City in August and Hanoi City in December, respectively. Vietnam Medi Pharm Expo is a platform for the world’s advanced medical technologies and equipment companies to connect with Vietnamese private and public hospitals and pharmaceutical companies.
3.1.6 Challenges & Entry Barriers
The evolving nature of regulatory regimes and commercial law in Vietnam, combined with overlapping jurisdiction among government ministries, often results in a lack of transparency, uniformity, and consistency in government policies and decisions on commercial projects. Project timelines often exceed initial projections, especially when financed using official development assistance.9
Vietnam has a comprehensive anti-corruption legal framework in comparison with other Asian countries. The anti-corruption legal framework significantly improved after the adoption of the Anti-Corruption Law in 2005 and the National Strategy on Anti-Corruption to 2020. Corruption and administrative red tape within the government has been a vast challenge for governmental consistency and productivity and for foreign companies doing business in Vietnam.
Many firms operating in Vietnam, both foreign and domestic, have found ineffective protection of intellectual property to be a significant challenge. Piracy rates for software were estimated to be 74% in 2017, a small improvement from 92% ten years earlier, but signalling a steady but slow decline.
9 https://www.export.gov/article?id=Vietnam-Market-Challenges
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3.2 Assistive Technologies
3.2.1 Market Overview
Vietnam, with its 97 million inhabitants, faces an immense problem in rehabilitating its disabled population. While official numbers vary, it is estimated that persons with disabilities total almost 8% of Vietnam’s population – 7.76 million physically handicapped individuals, of which an estimated 500,000 are amputees.10 Most of them lack prosthetic care due to the restrictive medical costs and the difficulty of accessing medical centres.
The situation is exacerbated by its rapidly ageing population. Despite the country’s positive demographics, Vietnam's General Department of Population and Family Planning places the number of people over 60 years old in Vietnam at 10% of the country's population, equivalent to 9 million people. By 2029, Vietnam will have some 16.5 million elderly people, accounting for 17% of the whole population.
Since 1990, the Vietnamese government has been working to improve the lives of persons with disabilities in the country. Initially, small-scale programmes were undertaken. The passage of the Vietnam Disability Law in 2010 and the country’s ratification of the UN Convention on the Rights of Persons with Disabilities in 2014 were critical toward improving the legal framework to ensure the rights of people with disabilities.
Today, the Vietnamese rehab system comprises 31 rehabilitation centres and orthopaedic and prosthetic facilities (many in the big cities), operated by the Ministry of Health, the Ministry of Labour, Invalids and Social Affairs and the Department of Labour and Social Affairs. Their main goal is to take care of disabled veterans, whose prosthetic and orthotic needs are covered by the Ministry of Labour, Invalids and Social Affairs. The wait for a government-provided prosthetic device is, in many cases, very long.
10 https://pentaprosthetics.com/; https://pentaprosthetics.com/; https://www.asialifemagazine.com/vietnam/people-with-disabilities-in-vietnam/
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The most commonly available locally-produced assistive devices in Vietnam tend to be basic, such as canes or walking sticks, walkers, crutches and wheelchairs. There is a growing demand for assistive devices, particularly prostheses and orthoses. These devices are imported into the country to meet the growing demand. Analysis of import data highlights that the sub-sector experiencing the highest growth is orthopaedics and prosthetics.
Figure 5: Imports of medical equipment sorted by application Source: Vietnam Ministry of Health, 2017
Various hospitals are building up their expertise in this area, with many collaborating with foreign NGOs. Bach Mai Hospital, a multi-field medical facility in Hanoi and considered one of the largest in Vietnam, opened a special rehabilitation unit in 1998 for treating adults and children with disabling conditions (stroke and cerebral palsy). The unit, which is sponsored by Veterans For America, has seen more than 1,700 patients and has fitted more than 2,100 plastic braces since its establishment.
The Hospital for Traumatology and Orthopaedics (HTO) is the largest purely orthopaedic hospital in Vietnam. The programme is financially supported by The Epworth Medical Foundation, private philanthropy and Orthopaedic Outreach.
The Orthopaedics & Rehabilitation Hospital is a local public hospital established in the 1980s and located in Ho Chi Minh City. The hospital, which has 11 medical departments, is one of the first
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Vietnamese hospitals to specialise in orthopaedics and rehabilitation. It also researches, designs and manufactures prosthesis and other medical devices.
Looking at the tremendous need for qualified Orthotists and Prosthetists (O&P) personnel in Vietnam, Germany is offering support through government-sponsored programmes of "Technical Collaboration”. A bilateral political agreement between the two governments has led to the establishment and management of an O&P training school in Hanoi to meet educational needs.
According to the Ministry of Health, only 40% of provincial hospitals nationwide have geriatric wards, an anomaly in one of the top ten fastest ageing populations in the world. A key player is the Hanoi-based National Geriatric Hospital, which has 300 inpatient beds and is capable of serving 1,000 people a day. To address the shortage of geriatric facilities in the country, the ministry plans to build a branch of the National Geriatric Hospital in nearby Ha Nam province providing professional examination and treatment.
The field of audiology, on the other hand, remains relatively under-developed in Vietnam. According to a University of Texas professor, in 2017, there was only one audiologist in all of Vietnam11. With such a limited professional base in the country, there is limited information about how the people of Vietnam are treated for hearing issues or who provides treatment.
New-born hearing screening is not typically conducted in Vietnam, with incidences of hearing loss discovered only as children develop. Families usually go to the local hospital for evaluation and end up at one of the major children’s hospitals such as the ones in Hanoi and Ho Chi Minh City. Typically, they first see an Ear, Nose and Throat (ENT) specialist, and then an audiology technician.
There is presently no insurance coverage or state support for cochlear implants in Vietnam. Cochlear implants, the associated surgery, and the ongoing therapy and audiological support are difficult for many families in Vietnam to afford.
11 http://www.hearingreview.com/2017/07/ut-dallas-professor-creates-global-network-audiology-information/
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Interestingly, a number of international providers of hearing care solutions have manufacturing presence in Vietnam. Many hearing aid components are made in Vietnam, but get assembled overseas in countries like Denmark.
Swiss-based Sonova, one of the largest providers of hearing care solutions, has a production facility near Ho Chi Minh City, to cater to growth in the region as well as globally. Its facility in Vietnam is one of three hearing instrument manufacturing hubs, with the other two in Switzerland and in China, respectively. In Vietnam, it manufactures various types of hearing instruments – custom products, Audéo B-R Receiver-in-Canal (RIC) products, including the first-of-its-kind lithium-ion rechargeable hearing aid, as well as a new generation of external receivers. Sonova’s core business brands, Phonak, Advanced Bionics, are also present in Vietnam.
Vietnamese imports of hearing aids (excluding parts and accessories) grew by over 40% in 2016 and 43% in 2017, to reach a value of US$ 16.7 million (EUR 14.7 million) in 2017.
Local Players
Harima Co., Ltd, is a Vietnamese company based in Ho Chi Minh City. The firm specialises in manufacturing manual and motorised wheelchairs, electric mobility scooters, walking aids, as well as hospital beds.
Harima uses high-quality components such as electric motors from Taiwan, and controllers from the UK. The company services both the domestic market as well as foreign customers. Its wheelchairs and electric mobility scooters for the export market have CE (Conformité Européenne) approval and are registered with the FDA (Food and Drug administration) in the US.
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Figure 6: A powered wheelchair from Harima Source: Harima
Kien Tuong is a Vietnamese manufacturer of assistive devices with over 30 years of experience and is headquartered in Ho Chi Minh City. The company specialises in the production of wheelchairs as well as canes, crutches, and walkers. It counts the Army Medical Department (of Vietnam’s Ministry of Defence) as its client. The company ventured to overseas markets in 2009 and has collaborated with Whirlwind Wheelchair International – a programme of San Francisco State University – to develop and produce new-generation wheelchairs.
Figure 7: Walkers from Kien Tuong Source: Kien Tuong
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3.2.2 EU Entry Opportunities
European companies looking for opportunities in the field of assistive technologies in Vietnam will find that the country offers bright prospects.
◼ Vietnam’s population is ageing quickly. In 2017, more than 10% of the population will be 60 and older, and in 15 to 20 years the elderly will account for one third of the total population. The geriatric population is prone to diseases – it is estimated that only 5.7% of Vietnam’s elderly maintain good health. Among the elderly, musculoskeletal disorders are the most frequently reported chronic diseases, followed by hypertension, gastrointestinal diseases, and cardiovascular diseases. This is expected to positively impact the market by increasing demand for assistive devices.
◼ Vietnam has developed the 2017-25 action plan for the elderly, which requires that all city- level and provincial-level hospitals have a gerontology faculty and even a separate specialised centre for older patients.
Figure 8: The Department of Geriatrics in Hanoi Dong Da General Hospital Source: Vietnamnet
The National Geriatric Hospital has also been asked to help localities nationwide build functional rehabilitation centres. Geriatric departments will be established at Thanh
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Nhàn, Saint Paul, Hà Đông, Bắc Thăng Long, Vân Đình and Sơn Tây hospitals. In addition, more occupational therapy areas will be constructed, and more medical staff trained to care for old people at these facilities. This will also help drive the demand for assistive devices, rehabilitative and physiotherapy equipment in the country.
◼ The market will also be bolstered by the Vietnamese government’s plan to ensure that 100% of the elderly population have health insurance cards by 2025, and that 80% receive at least one medical check-up a year and maintain up-to-date health profiles.
◼ The increasing incidences of hearing disorders and hearing loss problems among the Vietnamese population have led to a growing demand for hearing devices. There is a need for enhanced hearing aid devices since many remain untreated, especially among infants, which can further lead to speaking impairment and psychological disabilities among them.
◼ Private healthcare services in Vietnam are expected to play a major role in the provision of healthcare services in Vietnam, especially as the public healthcare system has limited capacity. Increasingly, the government is looking to private sector healthcare to address these challenges. According to PwC, this new private healthcare infrastructure may position itself to service the high-end segment of the healthcare market, offering opportunities for European companies offering high-tech assistive technology.
European Players
Sonion
Since 2006, the Danish-invested enterprise Sonion Vietnam has a US$ 25 million (EUR 22 million) facility producing hearing aids in the Ho Chi Minh City-based Saigon Hi-Tech Park. The enterprise, a subsidiary of the world’s leading miniature acoustic components maker, Sonion AS, produces transducers and micro-mechanical components for hearing aids, pro audio and the advanced communication industries.
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The products produced in Vietnam are intended for export to the global market. Sonion AS, which has 5,000 employees, has facilities in Denmark, Poland, the Netherlands, the US, China, the Philippines and Vietnam.
Figure 9: Sonion’s factory in Vietnam Source: Sonion
Intercus
Intercus, a medical supplier from the German state of Thuringia, has successfully set up two training centres for orthopaedists and trauma surgeons in Hanoi and Ho Chi Minh City. Practical training is provided in local hospitals after participants have attended theory classes.
Deutsche Investitions- und Entwicklungsgesellschaft (DEG) is co-financing the investment with funds from the German Federal Ministry for Economic Cooperation and Development. Intercus can thus contribute to advancing orthopaedic care and trauma surgery in Vietnam, and simultaneously expand its business operations in the country.
Its local partner is Hanoi IEC Ltd – a Vietnamese business consultancy firm specialising in medical care. The company organises the training courses and events in Hanoi and Ho Chi Minh City, as well as in various provinces.
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Vulcan Augmentics
Vulcan Augmentics is a firm set up in Vietnam by a UK national, Rafael Masters, in 2017. Working closely with Ho Chi Minh City based venture builders, Alley 51, the company has been building and prototyping augmented prosthetic arms for the last year at their design studios in Phu Nhuan and Binh Duong. Its launch product is an arm comprising six components – fingers, palm, wrist, forearm, socket and brace. Its prosthetic arms have a unique, modular design that clicks together like Lego, with components that can be interchanged and upgraded depending on user requirements.
Figure 10: Vulcan Augmentic’s “click & go” prosthetic arms Source: Vulcan Augmentic
Vulcan aims to serve lower to middle income amputees in developing countries through specific modules that can be attached to their daily-used prosthetic arm. To ensure affordability, it uses 3D printing and open source software.
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3.3 Medical Equipment
3.3.1 Market Overview
In line with the expansion of the healthcare sector, Vietnam’s medical equipment market has observed a stable growth over the past few years. Estimates of the market value range from just under EUR 1 billion to approximately EUR 1.2 billion in 2018. In fact, the steady influx of investments and increasingly liberal government policies have triggered shifts in the entire healthcare system. Today, Vietnam’s medical equipment market, despite being relatively small in the global context, is considered one of the fastest growing in Asia. The Ho Chi Minh City Medical Equipment Association predicts that Vietnam’s medical equipment market will enjoy an average growth rate of between 18 and 20% over the 2016-2020 period.12
The figure below illustrates the forecasted trend of the medical equipment sector’s growth across all segments in 2019. This steady growth in the medical devices sector can be partially attributed to the Government’s initiatives that aim to improve healthcare systems and facilities.13
Figure 11: Medical equipment market structure Source: Overview of Vietnam Healthcare and Medical Device Market, 2017, IPSOS
12 https://www.vir.com.vn/medical-firms-aim-for-global-market-62228.html 13 https://www.flandersinvestmentandtrade.com/export/sites/trade/files/attachments/EVBN-EVBN-MEDICAL-DEVICES-2016.pdf
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Over 95% of the medical device market in Vietnam is made up of foreign goods. According to the Ministry of Health (MoH), the country spent more than US$ 1.1 billion (EUR 0.96 billion) on imported medical equipment in 2017, up from US$ 950 million (EUR 832.7 million) in 2016. Local production is extremely limited in terms of value, but volume levels are rising. There are presently around 50 domestic firms producing approximately 600 products officially licensed by the MoH. Vietnamese firms produce mainly medical beds and cabinets or other offerings such as dressings, plastic gloves and syringes.
Attracted by low labour costs, foreign medical device manufacturers (particularly Japanese and Korean) have invested significantly in Vietnam over the past few years. While the Vietnamese economy is benefiting from the influx of foreign capital, in terms of technology, Vietnam only plays a small part in the assembly segment.14
Vietnam’s five largest suppliers of medical equipment are Japan, Germany, the United States, China and Singapore. Medical products from these markets make up 55% of Vietnam’s total medical equipment imports.15
Medical equipment being used in Vietnamese hospitals and clinics tends to be outdated. Shortages are common, placing a strain on providers and patients. However, there is a push to upgrade medical equipment in hospitals, in part because of the Satellite Hospital Project (2013– 2020). This project aims to reduce the number of patients in higher level hospitals by upgrading the technical capacity for examination and treatment in provincial hospitals designated as satellite hospitals through technical skills transfer by central or core hospitals. So far 23 core hospitals have transferred 2,000 medical techniques to grassroots-level health clinics. More than 85% of satellite hospitals have reduced the number of patients they send to central hospitals.16
As a consequence of the Satellite Hospital Project, hospitals are reported to be willing to spend significantly on medical equipment. However, it should be noted that they do not have a qualified
14 https://english.vov.vn/economy/vietnamese-firms-make-no-hitech-medical-equipment-380055.vov 15 https://english.thesaigontimes.vn/61530/vietnam-imports-large-volume-of-medical-equipment.html 16 http://vovworld.vn/en-US/society/satellite-hospitals-increase-medical-treatment-opportunities-for-rural-residents-702508.vov
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workforce to make full use of the modern equipment.17 Hospital directors have reported that one of their biggest problems is to ensure that competent personnel receive the medical technique transfers.18
Figure 12: Doctors from Thanh Hoa Hospital being trained under the Satellite Hospital Project Source: The Voice of Vietnam
Vietnam has signed a formal agreement for the harmonisation of medical device regulations across South East Asia. This agreement, formally called the ASEAN Medical Device Directive (AMDD), provides a more straightforward path to the market for medical device manufacturers. European companies will be able to more easily access a common medical device market with a market size of more than 600 million people. While no official timeframe has as yet been set for the actual AMDD implementation dates, current medical device regulatory systems in Singapore and Malaysia provide a good indication of what an ultimate ASEAN framework will look like.
17 https://english.vietnamnet.vn/fms/science-it/191250/modern-medical-equipment-still-cannot-be-fully-exploited.html 18 http://vovworld.vn/en-US/society/satellite-hospitals-increase-medical-treatment-opportunities-for-rural-residents-702508.vov
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Figure 13: The AMDD creates opportunities in the ASEAN Market
Local Players
USM Healthcare, established in 2012, is the first Vietnamese company to produce cardiovascular products such as PTCA balloon catheters, coronary stent systems, and PTCA accessories in Vietnam. The company has four sales offices in Vietnam, including in Ho Chi Minh City and in Hanoi. At the Saigon Hi-tech Park, USM Healthcare has set up its own Technology Research Centre with a total area of 14,000 m2 with complete facilities such as an office building, laboratory, and areas for manufacturing and testing.
MEDEP, established in 2015, is the first intraocular lens (IOL) producer in Vietnam in the form of a 100% technology transfer from the US. MEDEP has a factory in Saigon High-Tech Park equipped with some of the world’s most advanced technology. According to the company, currently, all IOLs for cataract surgery are imported. It plans to release its first products in 2019, and hopes to capture the domestic market, as well as serve the international market.
Danameco Medical Joint Stock Corporation – established in 1976 – is a pioneer Vietnam- based manufacturer and distributor of medical supplies nationwide and abroad. Danameco’s product range is varied, from specialty kits for medical usage, bandages and gauzes, hospital uniforms, to anaesthesia and respiratory consumables, surgical staplers and artificial kidney
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filters. In 2010, the company listed shares on Hanoi Stock Exchange. The company is headquartered in Da Nang, and has two factories, a warehouse of 3,000 m2 and a medical service centre.
Figure 14: Danameco’s product range is typical of local medical device manufacturers Source: Danameco
3.3.2 EU Entry Opportunities
EU manufacturers of medical devices looking for market opportunities in Vietnam will find that the country offers significant opportunities. With little domestic medical device production, the Vietnamese government has adopted trade policies that are favourable for foreign medical device manufacturers – such as low import duties and no quota restrictions.19
◼ The EU-Vietnam trade agreement will also help to stimulate trade and remove the remaining barriers to investment. For European medical companies, Vietnam will become an
19 http://bdg-vietnam.com/de/about/news/details/items/vietnam-medical-device-industry-facts-figures-and-opportunities/
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increasingly attractive place to do business, not just as a competitive production base with low labour costs and access to the dynamic South East Asian region, but also as a rapidly growing market for EU exports.
◼ European companies can target four main classes of medical device purchasers. The largest are government-funded hospitals, which account for 80% of the market. Foreign- owned hospitals and clinics are also large purchasers; however, these facilities usually purchase supplies from their sponsoring country. Local private hospitals will show the strongest growth, while research and educational institutions will also account for some of the demand.
◼ Large hospitals in Ho Chi Minh City, Hanoi, Hue, Danang and Can Tho will be provided with hi-tech medical equipment. In Ho Chi Minh City alone, some US$ 900 million (EUR 792.3 million) will be invested to upgrade equipment for hospitals by 2020.20
◼ Medical education and research institutions are generally very open to experimenting with new systems and innovative methods. These end-users present an excellent strategic opportunity for European companies to develop partnerships, given their desire to explore new technologies.
◼ Large amounts of public funds have been allocated for upgrade hospitals in the provinces. Major national-scale hospital upgrade and construction projects have been approved by the central government. Vietnam also receives a large amount of international aid in the form of loans and donated medical equipment. Several projects are currently taking place in Vietnam, including those funded by the World Bank and the EU.21
◼ Geographically, there are two major medical equipment markets in Vietnam: Hanoi and Ho Chi Minh City, which together represent around 80% of the entire market. Although Ho Chi Minh City has a larger population and more medical centres, Hanoi has the largest share of
20 https://english.thesaigontimes.vn/61530/vietnam-imports-large-volume-of-medical-equipment.html 21 https://www.export.gov/article?id=Vietnam-Healthcare
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purchasing contracts. The Ministry of Health based in Hanoi is often the decision-maker for large projects.22
◼ Infrastructure upgrading resulting from the Satellite Hospital Project presents a growth opportunity for medical device suppliers. The Ministry of Health has recently approved a project to set up a network of 50 satellites hospitals linked to 14 hub hospitals and to add 7,150 beds for overcrowded specialties.
◼ In terms of medical specialties, products related to pulmonology, cardiology, geriatrics and gynaecology are seen to generate strong interest in Vietnam. This aligns with the fact that while Vietnamese were battling with infectious diseases in the past, they are now also prone to chronic diseases due to changing lifestyles, ageing and rising pollution. Hence, products that support the research, diagnosis and treatment of such health conditions will experience growth in demand.23
◼ In addition to a growing demand for medical imaging equipment (i.e., X-ray machines, CT scanners, colour ultrasound machines, magnetic resonance imaging machines), there is also a need for radiation equipment, intensive care unit equipment, surgical devices and test kits, among others.24
◼ Vietnam’s in-vitro diagnostics (IVD) market represents one of the highest growth markets in the Asia-Pacific region, driven by the centralised diagnostics segment (CDx) and projected to grow annually at almost 13%.
◼ To better serve the remote communities, there is also an interest in wireless medical device packs that allow nurses and medical technicians to do diagnostic field work, and for doctors to manage chronic illness remotely. Typically, these packs include devices for measuring blood pressure, blood glucose, other blood chemistry, 12-channel ECG, stethoscopes, oximetry, thermometers, dermascopes, otoscopes, weight scales and other rapid tests.
22 https://aseanup.com/overview-of-healthcare-in-vietnam/ 23 http://bdg-vietnam.com/de/about/news/details/items/vietnam-medical-device-industry-facts-figures-and-opportunities/ 24 http://bbgv.org/wp-content/uploads/2017/10/Imported-medical-equipment.pdf
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The pack has equipment that allows the nurses on the ground to transmit medical examination results to medical centres to obtain a diagnosis.
European Players
Fresenius Medical Care
Fresenius Medical Care, a company headquartered in Germany, is the world's largest integrated provider of products and services for individuals undergoing dialysis. It provides a complete solution for people with chronic kidney failure – from dialysis products to therapy options within its own clinics. Fresenius Medical Care is present in over 120 countries, which includes 3,752 dialysis clinics and 41 production sites worldwide.
Fresenius Medical Care Vietnam is based in Ho Chi Minh City, and has 28 employees. It distributes a complete range of haemodialysis machines, peritoneal dialysis systems, water treatment systems, treatment recliners, dialysis consumables and other related products.
Novaerus
Irish company Novaerus’ airborne pathogen control technology provides a comprehensive infection defence system for indoor facilities strong enough to destroy bacteria, viruses, mould, spores and allergens. Its runs 24/7 to annihilate airborne pathogens, and can be used in healthcare institutions.
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Figure 15: Novaerus’ airborne pathogen control technology Source: Novaerus
In 2016, it signed a distributorship agreement with Vinamedical, a leading medical equipment supplier in Vietnam. The Vietnamese company, which represents many well-established medical brands in the market, covers all of Vietnam and Indochina.
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3.4 ICT for Healthcare
3.4.1 Market Overview
Vietnam is becoming an increasingly technologically driven and connected society with approximately 1.3 mobile subscriptions per person and more than half the population using the internet. As one of the developing countries with the highest rate of ICT adoption and lowest cost of ICT use, the country has tremendous potential for digital health. The government is actively promoting digitalisation to raise the quality of healthcare service providers and ease the load on central hospitals.
Figure 16: Training course for Vietnamese healthcare workers on digital systems Source: InSTEDD
The Vietnamese Ministry of Health (MoH) has developed a software called Medisoft 2003, which was designed to facilitate the management of the whole patient lifecycle from admission to hospital through recording procedures and costs, medication dispersion and other services until discharge. The software, however, has not been implemented nationally and there is still a great
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deal of fragmentation, inconsistency and incompatibility between health software across the country, despite the need for the exchange and sharing at hospitals in both regional and national levels.
Vietnam currently has around 1,000 different laboratory information systems, all based on varying standards, making it extremely difficult to conduct aggregated reporting. The same is true for electronic medical records at the hospital level, which lack unified formats and standards.25 Under the current system, the national electronic immunisation system, the electronic communicable diseases information system, and health service information system are also not connected. There is also no enterprise architecture of health information systems and unique patient IDs remain undeveloped.
Top-level hospitals in Vietnam have started implementing their own digital systems to manage their database of patients, which incorporate Medisoft 2003 software in some ways. Provincial hospitals generally have IT networks as well as some health information systems with linked databases for patient master indices, consultations and emergency, finance and pharmacy. In 2014, most of the hospitals at the central level used clinical software applications, but only 68% of provincial level facilities and 61% of district level facilities utilised such solutions.26 Many hospitals and healthcare centres, especially at the local level, continue to use conventional paper- based information management systems. As recently as December 2018, the Vietnam Economic Times reported that despite having a strong focus on digitalisation, none of the hospitals in Vietnam can operate without physical documents, which has led to issues in medical examinations and treatment.27
Slow adoption of digital tools by most hospitals and health centres may be attributed to obstacles such as a lack of health IT technicians; shortage of stable internet connections throughout Vietnam especially in rural areas; limited budgets for computers, technicians and software; little
25 https://blogs.adb.org/blog/digital-health-viet-nam-not-if-when 26 https://aseanup.com/overview-of-healthcare-in-vietnam/ 27 https://vneconomictimes.com/article/business/hospitals-going-digital
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or no compatibility between health systems being currently used; as well as no real understanding of the application of data to healthcare.
Team Finland undertook an informal survey of 108 central hospitals in Vietnam, and reported these findings in its 2015 report, called ‘Future Healthcare Solutions In Emerging Markets: Vietnam’:
◼ Most of the interviewees did not consider new technology adoption to be an issue. Many already use online sources to update their health knowledge, with a favourite source being www.ykhoa.net.
◼ Some professionals interviewed had concerns over the possible uncompensated workload due to higher volume of information and patient communication.
◼ While the level of interest in mHealth is high in central hospitals where the physicians have better access to health information, the resistance to change is found among healthcare workers in the rural area.
Even though the adoption of ICT health solutions is still in a nascent phase in Vietnam, both interest and awareness is growing thanks to various ongoing initiatives. For example, Vietnam’s Institute of Population, Health and Development (PHAD) piloted an innovative mHealth (mobile health) programme to reach ethnic minority women living in remote communities.28 The research team established a Maternal and Child Health Information Centre that provides women with crucial information about pregnancy, pre-natal care, birth, and infant care via text messages. The participants reported that receiving information over mobile phones was convenient, and often eliminated the need for a trip to the health centre.
In February 2017, the Vietnamese government announced its plans to spend VND 5 trillion (EUR 189.6 million) on an ambitious project to create a nationwide system of electronic medical records – every Vietnamese citizen will have an electronic health record by July 2019. The system is expected to help with better management of patients at the local commune level, contribute to
28 https://www.idrc.ca/en/research-in-action/connecting-vietnams-isolated-communities-improve-healthcare
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a better understanding of the health needs of the population, while also helping to assess whether the national health insurance scheme has had an actual impact. As part of a successful pilot test, in June 2018, the MoH introduced software to compile the medical records of its citizens from eight cities and provinces into a single electronic database.
Also, in 2017 the government announced a plan to issue electronic healthcare cards to all citizens to certify their rights to medical services anywhere. With the new system, electronic healthcare registries in all 63 cities and provinces will be synced.
In August 2018, the MoH signed a cooperation agreement with FPT Corporation to apply and develop medical information technology for the national hospital network over the 2018-2028 period. The MoH is keen to create a major impact by encouraging large-scale digital transformation in healthcare services and has created the overall tone for investment in the digital space. It is focusing on the latest technologies, such as artificial intelligence, big data, cloud, mobility and the Internet of Things (IoT) in its smart medical model for Vietnam.29
The partnership between MoH and FPT is expected to lead to the digital transformation of the entire sector. FPT’s hospital management solutions have been successfully implemented in over 200 hospitals and medical clinics around Vietnam, including foreign-invested international hospitals in the country.
Apart from public healthcare projects, research offices, smaller tech firms and large enterprises have been coming up with new technologies and apps to complement the country’s e-health growth. An interesting development in the market is represented by the Microsoft Health Innovation Lab in Ho Chi Minh City.30 Founded by the CLAS Expara Vietnam Accelerator (CEVA) in partnership with Microsoft, the Microsoft Health Innovation Lab brings together an ecosystem of industry partners such as local and global digital health companies, biomedical multinationals,
29 https://vneconomictimes.com/article/business/hospitals-going-digital 30 https://www.galengrowth.asia/2018/02/01/vietnams-healthtech-renaissance/
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academia, as well as venture capitalists that help to connect and lead the digital transformation of hospitals and health facilities.31
Local Players
FPT Corporation, previously known as Corporation for Financing and Promoting Technology, is the largest IT service company in Vietnam, which specialises in providing IT infrastructure and software for the healthcare sector. FPT offers solutions such as a Hospital Management Information System (called FPT.eHospital), and clinic management software (called FPT.eClinic).
Figure 17: FPT eHospital is a comprehensive hospital management system Source: FPT
Nearly 20 years after its launch, FPT.eHospital software has provided technology solutions for more than 200 hospitals and medical clinics around Vietnam. The application of the latest Industry 4.0 technologies, such as artificial intelligence (AI), big data, cloud, mobility, and the Internet of Things (IoT), is considered a highlight of the latest version - FPT.eHospital 2.0. These solutions have had a positive effect on many state hospitals and have allowed hospitals to manage operations with real-time data and digital medical records. For instance, the FPT.eHospital system helped Bach Mai Hospital in Hanoi care for a larger number of patients, up to 9,000 a day,
31 https://www.vir.com.vn/microsoft-showcases-it-solutions-to-accelerate-digital-transformation-in-healthcare-sector-44453.html
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representing a 15-20% increase. Payment processes for hospital fees and health insurance procedures were also cut from 30 minutes to between three to five minutes per patient.
CLAS Healthcare is a spin-off of a 9-year old software company, and its focus is the delivery of primary healthcare. The CLAS Platform helps to integrate the variety of HIS/LIS/PACS solutions in a hospital/clinic with Electronic Medical Records (EMR), engage patients with access to online appointments and Patient Health Records (PHR), empower care teams with access to Continuing Medical Education (CME), and optimise clinical/operational effectiveness with BI dashboards and cloud-based HIS/LIS/PACS. Its solution is based on international standards.
It currently serves more than one million Vietnamese citizens and has over 500 doctors registered in its system. The CLAS platform improves care delivery by integrating patient history within its apps for doctors to monitor virtually and remotely. With Microsoft Azure and SQL, CLAS can store large amounts of patient information securely, and registered doctors use Power BI, a business analytics service, to analyse their clinical and operational effectiveness to serve patients better.
Jio Health is pioneering online healthcare by introducing an app that will send a doctor directly to the patient’s doorstep. With a focus on working within the traditional healthcare model rather than disrupting it, its aim is to manage outpatient care by lowering the traffic in overcrowded local hospitals.
3.4.2 EU Entry Opportunities
European companies that have specialised in ICT solutions for the health segment are advised to consider the following for the Vietnamese market.
◼ Over the past few years, the government has recognised the need to address the existing challenges within the healthcare sector through prioritisation of integration of Electronic Medical Records (EMR) and Health Information Systems (HIS); provision of remote medical service/ telemedicine; creation of medical databases; standardisation and interoperability of Health Management Information Systems (HMIS); and introduction of unique patient IDs, smart patient management cards and electronic health insurance cards. Multiple plans have
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been laid down, while a handful of initiatives have started. It is in fact an opportune time for European companies to showcase their capabilities to the Vietnamese market.
◼ The Healthcare authority is currently working on creating appropriate conditions necessary to introduce an Electronic Health Record system in Vietnam. Currently, the MoH is implementing the pilot project of Electronic Medical Records and hospital management systems in six hospitals: The National Hospital of Paediatrics, Thanh Hoa Hospital of Paediatrics, The National Hospital of Obstetrics and Gynaecology, The National Hospital of Traditional Medicine, Ha Tinh General Hospital and Thua Thien Hue General Hospital. These hospitals will focus on upgrading software for hospital information management with a view to providing better services for both doctors and patients. In addition, the health sector has been planning to issue Electronic Health Insurance Cards with the purpose of reducing cumbersome procedures as well as saving time and increasing treatment efficiency.32
◼ Spending for eHealth is focused on hospitals in the north, including the National Hospital of Obstetrics and Gynaecology, the Vietnam National Hospital of Paediatrics, and Ha Tinh General Hospital. Certain hospitals in the south, such as in Long An and Tra Vinh, have made investments in IT applications in order to improve the management of hospital operations. Private hospitals also invested heavily in IT solutions to improve the management.33
◼ European companies can capitalise on the fact that the Vietnamese population has a high rate of acceptance of mobile technology. The proliferation and advancement of cell phones and smart phones will continue to push ICT solutions to become an integral part of healthcare delivery. As a consequence, the adoption of digital health solutions in Vietnam is expected to be very high.
◼ In Vietnam, social media has become a key information source on healthcare matters. Online health forums are increasing in number and size. For instance, Webtretho, a forum
32 https://aseanup.com/overview-of-healthcare-in-vietnam/ 33 https://aseanup.com/overview-of-healthcare-in-vietnam/
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initially opened for young mothers to exchange information about healthcare and children, now has a membership base of nearly 2 million, consisting of both married and unmarried women. A Vietnamese company, Ha An Phat Company (an exclusive distributor of the Microlife brand of blood pressure monitors and thermometers) leveraged on online marketing through health forums. The company reported that its sales volume exceeded its 2014 and 2015 targets, thanks to its successful campaigns.34
◼ The introduction of health IT in hospitals in Vietnam has been limited to business processes and management systems, with very limited or no use of clinical applications such as order entry systems, decision support, and pharmacy systems. This presents opportunities for European companies with expertise in these areas to collaborate and provide e-health solutions to local healthcare providers.35
European Players
Advanced Healthcare Solutions AG (AHCS)
Austria-based AHCS’ key focus is developing solutions for healthcare requirements. One of its solutions is a software application which includes all essential modules to run and support a hospital in the areas of administration, medicines, nursing and billing. Billing and financial systems are connected using interfaces.
The Vietnamese government has picked and is piloting AHCS’ products. In Vietnam it offers a single electronic medical record which talks seamlessly to a Microsoft-developed, cloud-based patient information system. Microsoft is offering its system to AHCS at a very low fee to help AHCS with the testing of its services in Vietnam.
In addition, AHCS also supplies its Vietnamese partner with its Clinical- and Hospital Information System which is a fully integrated solution
34 https://www.slideshare.net/futurewatch/summary-future-health-solutions-in-emerging-market-service-vietnam-team-finland-future-watch- report-october-2015 35 https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Vietnam/Industries/healthcare
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Novartis
Swiss healthcare giant Novartis’ VaxTrak is a software programme that allows users at various levels of the health system to track vaccine stock and report monthly immunisation activity. Vietnam’s National Immunisation Information System (NIIS), which was launched in March 2018 in Hanoi, evolved from ImmReg, a digital immunisation registry, and VaxTrak, Novartis’ vaccine tracking tool.
While VaxTrak tracks vaccine supply chain, thus decreasing the likelihood of stock-outs and reducing waste, ImmReg allows health workers to use computers, smartphones, and tablets to enter and search for immunisation records, and send short message service (SMS) reminders to those due for vaccination.
ImmReg and VaxTrak have now been integrated into the national system, with the aim of tracking immunisation records of the entire population, from birth to death, and making the vaccine supply chain more efficient.
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3.5 Telemedicine and Remote Health Monitoring
3.5.1 Market Overview
Vietnam's high-calibre hospitals are mostly located in major cities. These central-level hospitals are directly managed by the health ministry and are known to employ the country's best doctors; their specialised wards and modern equipment tend to draw patients from outlying provinces, while lower-level hospitals (particularly district hospitals) seem to be unable to attract patients. Commune health centres only provide a range of basic services such as mother and child healthcare, family planning, treatment of acute respiratory infections, immunisations, and treatment of common ailments, among others.
As Vietnam may never have enough doctors or nurses to meet its evolving healthcare needs, telemedicine is seen as an innovative solution to aid communities traditionally underserved. The country is now looking to rapidly build an integrated, large-scale, telehealth-based system, which can be run from the urban centres, and deliver high levels of care to the rural regions.
Some recent projects and initiatives in this context include:
◼ In the Quang Ninh province, which is in a remote and mountainous area where its one million residents experience serious difficulties to access quality healthcare, the Quang Ninh Department of Health created a sophisticated healthcare delivery system via a telehealth network that combined access to 24 hospitals and community healthcare centres. The healthcare teams use video conference for meetings, training and mentoring, surgical guidance, as well as remote operations and other patient interactions – including follow-up care and initial consultations.36
Among the solutions deployed across the Quang Ninh Department of Health’s facilities, are room solutions designed by the American company Polycom, such as Polycom Group Series 500 and Polycom HDX® 7000 for High Definition video collaboration and rich-media
36 https://futurehealthcaretoday.com/telehealth-goes-global-bringing-world-class-healthcare-remote-locations/#.XA5AQ2gzaUk
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content sharing, enabling effective conversations and sharing of information for geographically dispersed teams.37
Figure 18: Telemedicine solutions at the Quang Ninh Department of Health Source: Polycom
◼ In 2016, a KfW Group-funded telemedicine project was launched at Viet Duc Hospital. The pilot project is intended to connect 6 hospitals in Thanh Hoa and Yen Bai Provinces to the Viet Duc University Hospital (VDUH) in Hanoi. With a total value of EUR 8.6 million, the project is intended to build upon the experience which VDUH has already gained by virtue of a telemedicine Satellite Programme established in the recent past.
EPOS Health Management, in cooperation with the International Virtual E-Hospital (IVeH) and Mediconsult Vietnam, will assist VDUH (up to 2021) to enable the 6 participating hospitals to extend their services through the use of a telemedicine network which will allow quality-assured expansion of services in the areas of surgery, trauma and emergency care. In particular tele-consultation, tele-examination, tele-training, tele-radiology, tele-surgery, tele-monitoring and tele-case conferences will be established, including provision of relevant HMIS, PACS and a telemedicine platform. The project is unique in terms of being the first
37 http://www.polycom.co.in/company/news/press-releases/2016/20160712.html
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such project to use systemic procurement to ensure provision of comprehensive, trouble- free services.38
◼ In 2017 VOV-Doctor24 and VOV-Bacsi24 – two online video call medical counselling apps were officially launched in Vietnam, the first of its kind in the country. The two software solutions allow users to register for consultation with doctors across the country, from anywhere and at any time of the day. The applications give users easy access to economical healthcare services, which is accessible through smartphones, tablets and personal computers running IOS, Android and Windows.39
Despite a growing interest, there is currently still no IT framework or electronic medical record standardisation in Vietnam, which creates discontinuous care and difficulty for telemedicine initiatives to connect to existing health data within the existing infrastructure.40 This is set to change in July 2019, When Vietnam launches its electronic medical records database nationwide, in accordance with the MoH’s plan.
In December 2017, in recognition of the fact that many technological advances have taken place in the telemedicine sub-sector, the Ministry of Health passed Circular 49/2017/TT-BYT regulating telemedicine activities. The new regulations are outlined in Section 4.4.
Additionally, a new Cybersecurity Law took effect in January 2019, requiring technology companies doing business in the country to operate a local office and store information about Vietnam-based users within the country.41
Concerning medical wearables, while these devices are not popular yet, but there is a clear trend that the Vietnamese are increasingly focused on health and fitness, and are turning to technology to help them reach their goals.42 At this stage, it is still more fitness rather than medical concerns that is driving the market for wearables.
38 https://www.epos.de/news/current-news/vietnam-telemedicine-project-kick 39 http://en.nhandan.com.vn/society/health/item/5531702-first-online-video-call-medical-counseling-service-launched-in-vietnam.html 40 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5941098/ 41 https://www.hldataprotection.com/2018/11/articles/international-eu-privacy/update-vietnams-new-cybersecurity-law/ 42 https://investor.fitbit.com/press/press-releases/press-release-details/2018/Fitbit-Now-Available-in-Vietnam/default.aspx
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Local Players
CLAS Healthcare is a Vietnamese virtual care services provider. Services it provides include: InstantDate, for online appointment for hospitals/doctors and patients; InstantBI, an online dashboard for hospitals and doctors; InstantCME, an online library and courses for doctors; InstantConsult, for online consultation with access to Health Records for doctors and patients.
Figure 19: CLAS Healthcare developed an app called BacSi24x7 Source: CLAS Healthcare
In 2017, CLAS Healthcare partnered with Microsoft in order to help the Hue Family Medicine Centre to improve first-contact care to patients at community health centres where doctors were not always available. CLAS Healthcare linked the patient’s history, symptoms, and complaints to Microsoft’s Language Understanding Intelligent Service (LUIS), to support the staff in making decisions about suitable specialties, diagnosis and treatment for patients. This feature was integrated with the electronic medical record system and was used effectively for assisting patients in finding relevant doctors, making appointments all by themselves via popular chat applications such as Skype, Facebook, and Messenger. This helped to reduce patient waiting time, assisted in coordinating the flow of patients, and improved efficiency.43
The company has plans to first consolidate in the local market and later expand to the Asia-Pacific region.
43 https://startupbeat.com/healthcare-bots-overhaul-vietnams-medical-records-through-digital-transformation/25601/
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VieVie, a Vietnamese technology company, launched a platform for telemedicine and online patient engagement with the backing of Singapore-based Clermont Group. The online health platform makes it easier to access healthcare by providing remote quality medical advice and care via an app.
All doctors and medical staff on the VieVie platform have their medical licences and identities verified to ensure they are qualified and experienced health professionals. VieVie’s medical team assess each doctor invited to the platform to ensure they have the capability and experience to respond to patients’ needs.
3.5.2 EU Entry Opportunities
European companies that have expertise in the field of telemedicine and remote health monitoring are advised to consider the following characteristics of the Vietnamese market, which can be turned into market opportunities:
◼ Vietnam has initiated a hospital development strategy focusing on the improvement of hospital facilities and healthcare workers in the provinces. The Decision 774 of the Ministry of Health for the period 2013-2020 gives guidance for the further development of satellite hospitals, in terms of upgrade of facilities and improvement in medical techniques, to bring them up to central hospitals’ standards of healthcare. The Ministry encourages the application of telemedicine to achieve the goals.44
◼ European companies are advised to consider strategic partnerships with local players to ease their way into the market. For example, in 2018, the Russian Centre of Corporate Medicine (CCM) signed a strategic partnership with Vietnam’s Dr. Binh Tele Clinic in Hanoi, under which the CCM will provide services in emergency first aid, remote healthcare, chronic disease management and prevention of occupational and malignant diseases. The online
44 http://en.hspi.org.vn/vclen/Research-Assessment-2-year-results-of-implementation-scheme-Satellite-Hospital-in-the-2013-2020-period- t15990-8069.html
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medical centre in Hanoi will be synchronously connected with a central call centre in Russia, ensuring the connection with the CCM’s 43 medical facilities across six countries.45
◼ Vietnam has high rates of mobile phone use and widespread internet penetration, even in rural areas. These factors, combined with the country’s high literacy rate, mean Vietnam is ripe for mobile health development.
◼ There is also an increasing awareness of wearable devices among Vietnamese consumers, which is slowly but surely gaining popularity. The urban population has begun to buy these products both for their own use and as a luxury gift.46
European Players
Medcubes
Austrian company Medcubes’ award-winning telehealth MedCase contains several diagnostic tools and an iPad so medical findings can be analysed by specialists anywhere in the world. In Asia, Medcubes has offices in Bangkok and Kuala Lumpur, as well as have a partner network throughout Asia Pacific in countries such as Singapore, Vietnam, Sri Lanka or Australia.
Figure 20: Medcubes’ telehealth MedCase Source: Medcubes
45 http://en.nhandan.org.vn/society/health/item/5898802-russia-provides-remote-health-care-services-to-vietnam.html 46 https://www.slideshare.net/futurewatch/summary-future-health-solutions-in-emerging-market-service-vietnam-team-finland-future-watch- report-october-2015
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Medcubes’ telehealth MedCase is being trialled in Vietnam in a bid to extend the coverage of health services to more remote areas. Based on the needs of external healthcare providers and health professionals in Vietnam, Medcubes provides different cases and settings which can be customised to their requirements. It offers a comprehensive set of high-quality devices available like a 12-lead ECG, stethoscope, SOP2 and COPD device, thermometer, blood pressure and blood sugar device, HD dermascope, HD otoscope and HD eye scope, or a weight scale.
PARSYS Télémédecine
French company PARSYS Télémédecine develops solutions allowing remote medical diagnoses, particularly for emergencies in isolated sites or mobile units. The company received an innovator award in 2013 by Telecom ParisTech, for its creative and user-friendly hardware and software tools.
Figure 21: PARSYS Télémédecine’s telecardia station Source: PARSYS Telemedicine
In Vietnam, PARSYS Télémédecine sells its products to Vietnamese coastguard ships, which are equipped with telemedicine cases, called Télécardia© Stations.
These cases allow the coast guard to easily capture and send the victim’s medical data to a remote medical terrestrial unit. This ensures the victim an optimal emergency medical journey.
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3.6 Nanotechnology Healthcare
3.6.1 Market Overview
Currently the research and application of nanotechnology in general, and nano biotechnology in particular, is undertaken in a number of research units, mainly concentrated in Ho Chi Minh City and Hanoi. Although the academic output in nanotechnology is growing in Vietnam, there remains limited impact in commercial terms.47
Examples of Vietnamese institutions focusing on nanotechnology for healthcare include:
◼ Institute for Nanotechnology (INT) - comprises three departments, namely, Support and Service Department, R&D Department, and Education Department. The research groups within INT include Bio-Nanosensor Research Group, Nano-Materials, Nano-Pharmacy Research Group and the Nanoparticles, Catalysts & Fuel Cells Research Group.
◼ The Vietnam Academy of Science and Technology (VAST), whose primary aim is to carry out basic research in natural sciences and technology in the areas of mathematics, physics, chemistry, biology, biotechnology, information technology, electronics, automation, space technology, and material science, among others. Some developments specifically related to nanotechnology for healthcare include:
▪ A team of scientists from VAST was presented with the 2016 Kovalevskaia Award from the Alexander von Humboldt Foundation of Germany. The Vietnamese team was recognised for their project on nanotechnology applied in healthcare and agricultural production. Considered pioneers in their field, they conducted research on the use of the sol gel process (which is a wet chemical technique) to make nanometre-sized semiconductor materials. They have invented a laser scanning confocal fluorescence microscopy, the first of its kind in Vietnam, which can provide CT scanning and create 3D images of living cells applicable in biomedical research and medical diagnosis.48
47 https://www.unitar.org/cwm/sites/unitar.org.cwm/files/uploads/chapter_for_chemical_profile_-_report-nanosafety.pdf 48 https://english.vietnamnet.vn/fms/science-it/174975/female-scientists-contribute-to-developing-nanotechnology-in-vietnam.html
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▪ In the same year, Vietnamese scientists from the Institute successfully applied targeted technology in producing a turmeric-based nano-drug to prevent and treat stomach pain and gastroesophageal reflux disease (GERD), as well as facilitating cancer treatment. The medical advancement makes Vietnam the second country in the world, after the US, to successfully produce effervescent tablets to heal stomach diseases.49
Figure 22: Scientists spent three years producing the turmeric-based nano-drug Source: Nhan Dan
In 2016 the country saw the launch of the first plant producing biological nano-products developed entirely by Vietnamese scientists. The Vietlife biological nano-plant officially went into operation in June 2016 at the North Thang Long Industrial Park in Hanoi. The objective of the company is to combine traditional medicine and modern drugs, using nano-sized drug delivery systems.50
Vietnam is a part of the Asia Nano Forum (ANF), a network organisation which was founded in 2004 and is now a registered society in Singapore. It aims to promote responsible development of nanotechnology that offers educational, social, environmental and economic benefits to each economy, by fostering international network collaboration. Among the key goals of the organisation are coordinating joint investment in, and mutual access to, major infrastructure by member economies; and promoting and coordinating standardisation and safety of
49 http://en.nhandan.org.vn/society/health/item/6011602-vietnam-succeeds-in-producing-effervescent-tablets-for-stomach-remedy.html and https://e.vnexpress.net/news/news/vietnam-produces-turmeric-based-nano-drug-to-fight-cancer-3486863.html 50 https://english.vietnamnet.vn/fms/science-it/159282/vietnam-s-first-biological-nano-product-manufacturing-line-put-into-operation.html
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nanotechnology concepts and measurements. Singapore, which is one of the more active members, chairs the standardisation working group in ANF.
The ANF also organises the Asia Nano Forum Summit, an annual event hosted by one of its member organisations. High level invited delegates from government, academia and industry gather to report on the latest developments of nanotechnology in ANF member economies. The summit is a flagship event for ANF.
Local Players
Vietnam Nano Technology Company Limited (VINANOTECH) is the earliest high-tech enterprise engaged in carbon nanotubes (CNTs) production and development in Vietnam. The company focuses on the nano-materials production process and commercialisation development. At present, it offers various specifications of CNT powder and other carbon-based nano-materials in small quantity for researchers and in bulk order for industry groups. VINANOTECH has developed a unique expertise in bio-sensing using multi-wall carbon nanotubes (MWCNTs) as electrodes. In the medical diagnostics arena, the company is trying to use nanotechnology-based biosensors to replace more costly and tedious laboratory methods for monitoring a patient's blood for proteins, chemicals, and pathogens.
Figure 23: Carbon nanotubes with medical applications Source: Stanford University
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Nanogen Biopharmaceutical is a leading Vietnamese company that is conducting R&D in Active Biopharmaceutical Ingredients (API) and specific therapeutic injections in the Asia Pacific region. Their work focuses on advances in recombinant DNA and protein technologies. Nanogen Biopharmaceutical researches, develops, manufactures and markets a wide range of therapeutic injection products. The company’s products include the NanoChip® 400 electronic microarray platform and a line of rapid, point-of-care diagnostic tests. Nanogen’s ten years of pioneering research involving nanotechnology holds the promise of miniaturisation and continues to be supported for its potential for diagnostic and biodefense applications.
3.6.2 EU Entry Opportunities
Vietnam can offer European companies access to cost competitive Vietnamese researchers and research facilities for product development. European companies with the relevant expertise may be interested to form collaborative technology partnerships with local companies in the nanotechnology healthcare sector.
For instance, in 2017 PHI Group, a US company, signed an agreement with Nhat Hai New Technology JSC, a Vietnam-based company specialising in applied research and nanotechnologies, to form a joint venture company in the United States to apply the latter’s nanotechnologies for the production of various nano products such as food supplements, pharmaceuticals, cosmetics, animal health treatments, paints and environmentally-related goods.51
European Players
The nanotechnology healthcare sub-sector in Vietnam is small. Thus far no European companies have entered the market. Even though there is a broad consensus among interested parties that the future of nanotechnology in general, and nanomedicine in particular, may be bright in Vietnam, investors are still deterred by the initial R&D costs of developing new nanotechnologies, securing or licensing existing nanotechnology and commercialising it. The lack of domestic nano- infrastructure is still considered as a significant entry barrier for many international companies.
51 http://www.nanotechmag.com/phi-group-forms-joint-venture-nanotechnology-company-process-agricultural-products-healthcare-beauty/
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3.7 Life Science and Biotechnology for Health
3.7.1 Market Overview
In-country biotechnology development began in the mid-1990s in Vietnam, when researchers at the University of Medicine and Pharmacy in Ho Chi Minh City conducted a series of polymerase chain reaction (PCR) experiments. The team's efforts, in collaboration with the University of California San Francisco, led to a rapid expansion in the use of PCR in the country. The technique is now widely used throughout Vietnam to detect various local influenza viruses as well as diagnosing malaria and multidrug-resistant tuberculosis.
Today Vietnam is looking to develop its biotechnology industry as a driver of economic growth. It is interesting to note that biotechnology has, for many years, been identified as a prioritised technology in Vietnam largely due to the country's reliance on agriculture. In fact, most of Vietnam's success in this field has been in the development of green biotechnology, which covers agricultural products.
Figure 24: Biotechnology in Vietnam is focused on agricultural applications Source: VietnamNet Bridge
While Vietnam imports the majority of its biotechnology products, it is also developing and manufacturing its own solutions used in therapeutics, diagnostics and vaccinations, which are
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being used in the country, as well as being sold to developed countries.52 Today Vietnam is making rapid progress in developing biotechnology for medical applications:53
◼ For example, the Institute of Biotechnology and the Military Medical University in Hanoi are well equipped with microarrays, high-resolution electron microscopes and mass spectrometers. These centres are working on proteomic and genomic research to develop treatments for unmet diseases such as diabetes, high blood pressure and cancer.
◼ Some of these research powerhouses are already making significant progress in therapeutic applications of biotechnology. For instance, NanoGen Inc. in Ho Chi Minh City will soon provide both Vietnam and international markets with relatively cheap cancer treatments by producing biosimilar monoclonal antibodies that can specifically target cancer cells.
◼ Others focus on tailoring biotechnology to diseases prevalent in Vietnam. For example, Vabiotech Company in Hanoi uses a reverse genetics approach to synthesise vaccines for Japanese encephalitis and hepatitis B, which affects many Vietnamese people and increases the risk of liver cancer.
◼ In Nha Trang, the Institute of Vaccine Research is producing safe vaccines for the country's most common diseases, including tuberculosis, tetanus and diphtheria, among others.
While Vietnam is progressing in applied biotechnology, the country is also making strides in basic research.
◼ The University of Ho Chi Minh City, for example, has done pioneering work in establishing embryonic and adult stem cell lines for planned clinical studies, thanks to its Biotechnology Centre which is also a supporting institution of the Asia-Pacific International Molecular Biology Network (A-IMBN) whose aim is to foster biotechnology development in the region.54
52 https://vietnamlawinsight.com/tag/biomedical-company/ 53 https://www.scidev.net/global/funding/opinion/vietnamese-biotech-has-a-healthy-future.html 54 http://www.a-imbn.org/about/aimbn.html
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◼ In 2015, RMIT University from Melbourne and the Biotechnology Centre of Ho Chi Minh City signed an MOU which outlines the joint approach towards developing Vietnam's biotechnology professions. The MOU includes many significant programmes and activities to enhance mutual support and cooperation in education and research across biotechnology and to provide more internship opportunities for Vietnamese students.55
Figure 25: Biotechnology Centre of HCMC and RMIT MOU Signing Ceremony Source: RMIT
◼ Today, the Institute of Biotechnology (IBT) of the Vietnam Academy of Science and Technology (VAST) is the national leading research institution in the fields of biosciences and biotechnology. Currently, IBT has 328 staff including two full professors, 20 associate professors, 65 researchers with PhD degrees, 70 masters.
◼ The national government is also stepping up its support to biotechnology. Inspired by breakthroughs in gene therapy in China, it has, for example, established the Vietnam Gene Therapy Centre within a major public hospital in Hanoi.
55 https://www.rmit.edu.vn/news/boost-biotechnology-industry-vietnam
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Local Players
Vabiotech Company develops and trades in vaccines and biological products, including diagnostic kits and prophylaxis treatment products and pharmaceuticals. It supplies vaccines for hepatitis A, hepatitis B, oral cholera and Japanese encephalitis (JE) for use in the Expanded Programme on Immunisation for domestic needs. In 2013, Vabiotech acquired licensing rights to US-based Inviragen’s proprietary JE technology to produce a cell-derived vaccine.56 Vabiotech has exported over three million doses of JE vaccine to India, and is also penetrating the East Timor market. In addition, it has exported 32,000 doses of hepatitis A vaccine to the Republic of Korea and 115,000 doses of oral cholera vaccine to Sri Lanka, India and the Philippines.57
Vaccine Company Limited of Dalat Pasteur (DAVAC), formerly known as Da Lat Pasteur Institute, was established in 1936. The company, which produces vaccines and biological products for disease prevention, was taken over by the Ministry of Health in 1975. Today, it works with both domestic and international organisations, institutes and companies in the field of business and technology transference, scientific research and human resource training.
CTCBIO Viet Nam Ltd. Co. is a joint-venture between CTCBIO INC. (Korea) and Sao Mai Biology Company (Vietnam). The company, which is headquartered at the Saigon High Tech Park, targets the markets of Vietnam, Laos, Cambodia, Myanmar and Korea. It has a research centre dedicated to developing vaccines based on genetic technology that prevents diseases for livestock and poultry. It also conducts research in other disciplines, including genetics and cell biology, functional genomics, animal cell culture, biodegradation of hazardous materials, molecular evolution, biological diversity, green chemistry, natural product synthesis, and protein engineering.
56 https://www.businesswire.com/news/home/20130103005213/en/VABIOTECH-Licenses-Cell-Based-Japanese-Encephalitis-Technology- Inviragen 57 https://vietnamnews.vn/society/349107/viet-nam-expected-to-produce-mixed-vaccines-in-coming-years.html#KY3DxZ1sFykuYuq7.97
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3.7.2 EU Entry Opportunities
European companies in the life sciences and biotechnology sub-sector are advised to consider the following entry-opportunities for the Vietnamese market:
◼ Although Vietnam has made great progress in improving its healthcare system, the country has no shortage of health challenges, from infectious diseases such as influenza to rising rates of chronic illnesses such as diabetes or cancer. Like many developing countries, it also has to contend with increasing resistance to drugs for killer diseases such as tuberculosis and malaria. Crucially, Vietnamese experts are looking at biotechnology as a potential solution to address these challenges.58
◼ Across the country, new biotechnology research centres to address growing incidences of cancer, diabetes, and antibiotic-resistant infections are already up and running or being planned. These centres can be targeted as potential buyers of modern equipment.
◼ Organisations such as the Asia-Pacific International Molecular Biology Network and University of California San Francisco Global Health Sciences have made a significant impact by providing assistance in networking, training and sponsorship for their collaborators in Vietnam. Additionally, multibillion-dollar investments in science parks, such as the Saigon Hi-Tech Park in Ho Chi Minh City, by industry giants including Intel and Nidec have promoted scientific entrepreneurship across Vietnam. These developments are providing opportunities to invest in Vietnam's biotechnology potential.
European Players
ZenTech Biotechnology
ZenTech is a Belgian biotechnology company that engages in the development, production and marketing of in vitro diagnostic solutions dedicated to diseases occurring at the prenatal, neonatal and paediatrics stages of life.
58 https://www.scidev.net/global/funding/opinion/vietnamese-biotech-has-a-healthy-future.html
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The company launched its international business development strategy eight years ago. It first opened a commercial office in Vietnam that allowed it to make good connections with local distributors. However, it soon realised that it was missing out on some opportunities in the region.
After Vietnam, the company incorporated its subsidiary in Singapore to act as a commercial hub. It then incorporated a small technical hub in Kuala Lumpur, Malaysia, which it used as a base to accelerate the commercial coverage of the area, including Indonesia.
Its Malaysia office has a research centre, and also handles regulatory affairs and product registration. Registering its products in Malaysia would allow ZenTech to access the other ASEAN markets, thanks to the ASEAN Medical Device Directive (AMDD) signed by the ASEAN member states in 2015.
ZenTech also opened a training centre in Kuala Lumpur that offers tailor-made trainings for distributors, laboratory technicians and physicians specialising in paediatric, neonatal and prenatal diagnostics.
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3.8 Research & Development Technologies and Services
3.8.1 Market Overview
The clinical laboratory industry in Vietnam has evolved in tandem with the growing demand for improved healthcare services. Although Vietnam remains a relatively insignificant destination for international clinical trials and clinical research, the industry is growing fast. From a small base, the clinical laboratory market is expected to register a positive CAGR of around 10.8% during the period 2017-2022 to reach a value of over US$ 200 million (EUR 176 million).59
As of 2015, the country had 46 medical laboratories with an international standard of ISO 1589. Three national centres for standardising and controlling the quality of labs at hospitals are located in Hanoi and at the Ho Chi Minh City University of Medicine and Pharmacy. The Ministry of Health has set up plans to build high-tech national reference laboratories in the country to improve the capacity of medical testing and ensure quality, but no definitive timeline has been specified.
Various factors are expected to spur the growth of the clinical laboratories market:60
◼ Vietnam has made significant progress towards achieving universal healthcare coverage. Rapid progress has been made in increasing enrolment rates and budgetary resources, with plans to provide insurance to 90% of the population by 2020. With an increase in insurance coverage, clinical laboratories, especially hospital laboratories will witness a rise in clinical lab tests.
◼ The rise in disease awareness campaigns about the advent, cause and prevention of common diseases have led to people proactively opting for clinical lab tests to ascertain diseases. There is an ongoing campaign by the Ministry of Health to raise awareness of non-communicable diseases (NCDs) such as diabetes and cancer prevention. In addition, there remains a demand for screening of infectious diseases:
59 https://www.kenresearch.com/blog/2018/02/vietnam-clinical-laboratory-market-is-expected-to-reach-over-usd-200-million-by-2022-ken-research/ 60 https://vietnaminsider.vn/vietnam-clinical-laboratory-market-is-expected-to-reach-over-usd-200-million/
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▪ There has been a rise in incidence of communicable diseases such as HIV, TB, Hep-B and Hep-C due to lack of awareness, and delayed vaccination in children.
▪ Tuberculosis (TB) remains one of the most common communicable diseases in Vietnam. Annually, it is estimated that Vietnam has 17,000 TB deaths.
▪ The incidence and prevalence of AIDS is high in Vietnam, which has led to the establishment of key central and provincial labs for HIV testing.
▪ According to the Ministry of Health, in the first nine months of 2018, a total of 42,700 infections of hand-foot-and-mouth disease (HFMD) were reported nationwide, of which 21,000 were hospitalised. Ho Chi Minh City’s Pasteur Institute reported that 6 children died of the disease in southern provinces.
Figure 26: Nhi Đồng Hospital overloaded with HMFD patients Source: Viet Nam News
◼ Clinical test outsourcing to independent labs is expected to have a positive impact on the demand for clinical tests.
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◼ The clinical laboratory market is expected to be bolstered by the Vietnamese government investments into developing the infrastructure and capabilities of provincial and district hospitals. More than 85% of satellite hospitals have reduced the number of patients they refer to central hospitals.
◼ In addition to establishing new hospitals, the government is also investing into upgrading medical devices and clinical standards of existing hospitals to cater to the sophisticated demands of local patients. New purchases and replacement of obsolete imaging and diagnostic instruments have positively augmented the market for clinical laboratories.
Currently, Vietnam has local clinical trial requirements for newly developed pharmaceuticals. The trial usually takes 2.5 years, followed by an approval procedure. Typically, a new drug takes around 5 years to enter the Vietnamese market. These procedures are considered as expensive by many foreign experts and developers. Alternatively, an enterprise can wait for 5 years after its product reaches the market of its country of origin and then claim access to public institutions such as clinics or hospitals to sell the drug in Vietnam. Pharmaceutical firms also have to reapply for the license at least six months prior to the expiry of the registration. Otherwise, they are not allowed to produce or sell the drug in Vietnam. Despite the six-month timeframe, in reality the process of renewal can take eight months to more than a year, restricting a pharmaceutical firm's access to the Vietnamese market.61
61 https://www.flandersinvestmentandtrade.com/export/sites/trade/files/news/223150528071429/223150528071429_1.pdf
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Figure 27: Clinical research in Vietnam Source: Trial Site News
While Vietnam's clinical research capacity remains low, it has grown swiftly over the years. In 2010, Vietnam conducted only 25 clinical trials, but this figure shot up to 72 in 2015.62 Examples of companies that are tapping onto Vietnam’s clinical research capabilities are:
◼ Nipro Pharma Corporation, Japan’s biggest prescription drug contract manufacturer, has expanded its operations in Vietnam with a new project focusing on research and development and medical equipment production. The project is worth US$ 300 million (EUR 264 million) and is located at the Saigon Hi-Tech Park.63
◼ In November 2018, the Institute of Oriental Medicine of the Republic of Korea opened a traditional medicine research centre in Hanoi, focusing on oriental medicine. The Korea- Vietnam Traditional Medicine Research Centre will apply various technologies to build a traditional medicine management system in Vietnam. It plans to conduct clinical research to compare disease prevention and treatment methods using traditional medicine.64
62 https://epsi-global.com/locations/vietnam/article02.html 63 https://www.vir.com.vn/nipro-starts-work-on-new-300-million-facility-in-vietnam-47470.html 64 https://en.vietnamplus.vn/vietnam-rok-cooperate-in-traditional-medicine-research/142734.vnp
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Important steps are being taken in order to strengthen cooperation in R&D by the authorities in Vietnam, which has signed collaboration agreements individually with the US, Japan and France, to cooperate in the field of medical laboratory capacity development, and in the testing of infectious diseases such as Severe Acute Respiratory Syndrome (SARS), H5N1, H1N1, measles, dengue and hand-foot and mouth disease.
Local Players
Big Leap Research is one of the few local companies which offers clinical research support in Vietnam. The company, which has presence in Hanoi, Danang, Hue, Ho Chi Minh City, Can Tho and Dong Nai, has a network of contacts which includes doctors, hospitals, and Ministry of Health officials. It has in-house staff that can run a full clinical trial from start to finish. It prides itself on being a local company, using local resources and international expertise.
Big Leap is able to help doctors with the more technical tasks they are not familiar with, such as processing data and liaising with authorities, so that they can focus on applying their expertise to the research. The full range of services it offers include project management, clinical trial monitoring, study site management, regulatory submission, medical writing, data management and analysis, consulting and training, as well as pharmacovigilance.
Labotec Science and Technology Company Limited, which is based in Ho Chi Minh City, is a distributor of laboratory equipment. It represents well-established foreign brands in Vietnam and provides equipment to help local laboratories and manufacturers to make more accurate diagnostic decisions, advance research methods and results and improve production performance in diverse fields such as food & beverage, microbiology, chemistry, physics, medical, industrial and pharmaceutical sectors.
3.8.2 EU Entry Opportunities
Even if the Vietnamese market is just at its initial stage of growth, there are opportunities in the market.
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◼ Clinical trials in Vietnam have mostly been focused around certain specific therapeutic areas. The most important therapeutic segments considered for conducting clinical trials in Vietnam are: Communicable and infectious diseases; Respiratory and lung disease; Gastrointestinal disease; Immune disorders; Metabolic and liver diseases; and Neurology.65
◼ The prevalence of infectious diseases in Vietnam, and the increasing incidence of target diseases, is leading to a growing demand for point-of-care (POC) diagnostic testing. For example, Vietnam is in need of rapid testing for Multidrug-resistant Tuberculosis (MDR-TB). The current trend of cellphone-based POC technologies has not caught on yet in Vietnam. However, given Vietnam's rising smartphone adoption and mobile usage, this may present future opportunities for European companies with expertise in this sub-sector.
◼ The growth of the healthcare, pharmaceuticals, chemicals, biotechnology, and food safety industries in Vietnam has also positively impacted the need for advanced laboratory and clinic equipment and information systems for research, diagnostics and treatment. For example:66
▪ Laboratory technology: laboratory equipment and machines, laboratory data systems and documentation, laboratory apparatus, as well as chemicals, reagents and consumables
▪ Analysis technology: Equipment for instrumental analysis, chromatography, spectroscopes, microscopes
◼ Several medical education and research institutions are open to experimenting with new systems and innovative methods. These end-users present an excellent strategic opportunity to develop partnerships, given their desire to explore new technologies.67 The most important national research centres for medicine in Vietnam include the following:
▪ National Hospital of Tropical Diseases
▪ National Institute of Hygiene and Epidemiology
65 http://blog.credevo.com/2018/02/14/conducting-clinical-trials-in-vietnam-why-and-how-to-start/ 66 https://vietnaminsider.vn/vietnam-clinical-laboratory-market-is-expected-to-reach-over-usd-200-million/ 67 https://www.export.gov/article?id=Vietnam-Healthcare
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▪ Hanoi Medical University
▪ National Hospital of Paediatrics
▪ National Centre for Veterinary Diagnosis
▪ National Lung Hospital
◼ While low operational costs represent an obvious opportunity offered by Vietnam, a relatively young and treatment-naïve population can offer opportunities for clinical research organisations, as studies conducted in Vietnam will not be interfered with by medication used in previous clinical trials. European companies seeking to investigate novel treatments for tropical and infectious diseases may consider setting up trials in Vietnam instead of these countries given its relatively higher level of economic development.
◼ European commercial sponsors for medical trials are active in Vietnam. EU companies might consider approaching the following players present in Vietnam for collaborations:68
▪ AstraZeneca (Anglo/Swedish, which is one of the most active commercial sponsors)
▪ Novartis (Switzerland)
▪ Roche (Switzerland)
▪ Bayer (Germany)
▪ Boehringer Ingelheim (Germany)
◼ Euro-Vietnamese research institutions that have presence in Vietnam also offer interesting collaboration opportunities:
▪ Vietnamese - German Centre of Excellence in Medical Research in Hanoi
▪ Oxford University Clinical Research Unit in Ho Chi Minh City and in Hanoi
▪ French National Research Institute for Sustainable Development (IRD), which has representation in Hanoi
68 https://www.trialsitenews.com/the-state-of-clinical-research-in-vietnam/
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European Players
KNF Group
Eppendorf is a leading German life science company that develops and sells instruments, consumables, and services for liquid-, sample-, and cell handling in laboratories worldwide. Its product range includes pipettes and automated pipetting systems, dispensers, centrifuges, mixers, spectrometers, and DNA amplification equipment as well as ultra-low temperature freezers, fermentors, bioreactors, CO2 incubators, shakers, and cell manipulation systems. Consumables such as pipette tips, test tubes, microtiter plates, and single-use bioreactor vessels complement the range of highest-quality premium products.
It has built up a network of distributors in Vietnam. Its partners are An Duong Science Technological Equipment Co. Ltd (Hanoi); BCE Vietnam (which has presence in both Ho Chi Minh City and Hanoi), and Investment-Technology Solutions Company (Ho Chi Minh City), with each handling a different range of products.
Ginolis
Established in 2010, Ginolis is headquartered in Oulu, Finland. The company works in co- operation with many of the world’s leading diagnostic companies. Ginolis sees intelligent automation as the future of diagnostics production. By being able to assemble multiple products with the same system, manufacturers save valuable space in their clean room environments.
The company took part in the DIAGMAL collaborative research project funded by the EU, which targets the development of a new molecular diagnostic test for malaria. The project began in 2013 and involved a field trial in Vietnam in 2015. Ginolis, along with KIT Biomedical Research of the Netherlands, German Q-Bioanalytic and UK-based Abington Healthcare were project participants.
The goal of the project was to develop a near point-of-care molecular diagnostic test which identifies parasite-specific DNA in a blood sample, avoiding time-consuming and expensive
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laboratory work, particularly in developing countries where malaria is most prevalent. There are currently no rapid molecular tests for the Plasmodium parasite on the market.
Ginolis has developed an enclosed Clinical Trial Unit (CTU) which transfers the fresh blood sample and buffer solution onto the immunoassay strip for testing. Once the solution is dispensed onto the immunoassay strip, testing is complete within minutes. The CTU provides a safe, enclosed transfer unit that eliminates cross-contamination risk and improves the safety of healthcare officials.
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3.9 Dental Products
3.9.1 Market Overview
Vietnam is considered a leader in dentistry in the region. Its dental market is expanding fast, driven largely by the medical tourism sector. Vietnamese dentists have built up a good reputation, while the imported dental equipment used in the country is of high quality. The cost for dental care in Vietnam is low compared with Western countries (a crown procedure in Vietnam costs less than 15% of what it does in the US), resulting in many foreigners combining dental treatment with a travel opportunity.
For example, oral-maxillofacial surgery has been undertaken in Vietnam’s National Hospital of Odonto-Stomatology (NHOS) for about ten years, while the procedure is still fairly new in Thailand and Singapore. NHOS typically performs 2 to 3 facial implants per week to help cure deformed faces in patients with facial injuries and facial jaw cancer, with each operation lasting about 13- 15 hours. As of the end of 2017, 500 patients have had such jaw surgery at one-tenth of the cost of undergoing the treatment abroad. Increasingly, the hospital also receives foreign patients to treat facial diseases and implants, as the cost of implants is five times cheaper in Vietnam.
Vietnamese dentists report that a dental implant that would cost US$ 4,000 (EUR 3,521) in the US and US$ 1,500 (EUR 1,320) in Thailand for example, costs only US$ 1,000 (EUR 880) in Saigon. Similarly, a crown procedure in Vietnam costs less than 15% of what it does in America and slightly more than half of that in Thailand.69
According to the Vietnam National Administration of Tourism the number of foreign tourists in Vietnam for dental care is expected to increase by 250% over the next five years to reach 250,000 a year.70 Local players are trying to capitalise on this growth. For example, the Ho Chi Minh City Odontology Hospital has plans to establish a dental tourism club, specialising in providing aesthetic dental services to tourists.
69 https://saigoneer.com/explore/sponsored-listings/247-explore-2/14922-vietnam%E2%80%99s-emergence-as-a-global-leader-in-dental- tourism 70 https://english.vietnamnet.vn/fms/business/177006/developing-dental-tourism-in-vietnam.html
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The Vietnam Tourism Dentistry association oversees 23 independent clinics across the country. The association targets to achieve a third of the tourist population visiting Vietnam for dental tourism by 2020, and it is an active player in promoting the local industry:
◼ In 2017 it co-organised the “Dental Tourism Fair” in a bid to strengthen the connection between the government agencies, local dentists and travel agencies. The same year, it also co-hosted an event in Ho Chi Minh City to introduce local dentists to dental tourism and to share insights on the growing sector.
◼ In 2018 it launched the country’s official portal on dental tourism (https://dentaltourism.vn). The website provides information on the various dental packages available in Vietnam, shares the capabilities of dentists, as well as provides links to budget-friendly holiday packages by various tour agencies. It also participated in the Ho Chi Minh City International Travel Expo (HCMC ITE).
The growing middle-class economy and changing cultural values has also led to more Vietnamese seeking dental services. According to Vietnam’s Ministry of Health, over 90% of its population have dental problems, with 85% Vietnamese children aged between the ages of 6 and 8 having primary tooth decay, while 68.6% in the 15-17 age group have permanent tooth decay.71 Vietnam is taking steps to prevent tooth decay. The country is starting to train more dentists. Across the country, there are eight dental schools, each of which produces 500 dentistry graduates per year. However, this number has not been able to meet the demand of the emerging population, as the number of dentists per capita ratio (1:25,000) is low.
It should be noted that there is limited local production of dental equipment. Instead, local companies focus on low-technology products used in oral care, such as toothbrushes and dental floss. Most dentists prefer dental equipment of high quality from well-known brands and state of the art technology to satisfy demanding patients. Typically, dental equipment is imported into the country by distributors, or, in some cases, by local branches of foreign companies.
71 http://vietnamnews.vn/society/271351/poor-dental-health-major-concern-among-countrys-youth.html#cdWfigcSe3Ii0hmo.99
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Dental equipment imported by Vietnam was valued at almost US$ 16.5 million (EUR 14.5 million) in 2017, which represents a 12% growth from the previous year. The US tops the list of exporters to Vietnam, but EU members such as Germany, France and Italy rank also among the leading suppliers of dental equipment to Vietnam.
Exporters Imported Imported Imported Imported Imported value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 11248 10844 12192 14763 16499 United States of America 1550 1546 1997 1706 2707 China 1353 1062 1284 1872 2075 Korea, Republic of 918 979 1451 1618 1834 Germany 1239 1438 1003 2078 1391 Taiwan 932 708 880 1268 1277 France 404 337 338 675 921 Japan 1272 1492 1308 1084 898 Italy 70 132 107 492 738 Lao People's Democratic Republic 254 434 557 582 730 Austria 113 156 519 285 545 Table 4: Imports of Instruments and Appliances Used in Dental Sciences (HS Code 901849) Source: International Trade Centre Unit: US Dollar thousand
Local Players
Some foreign companies have established a presence in the dental care sector in Vietnam. These include:
Ki-works Vietnam was founded in 2002 and is a 100% foreign-owned subsidiary of Japan’s Okamura Group, an oral care company. Ki-works Vietnam manufactures high quality and hygiene dental products which include toothbrushes, oral care accessories, interdental brushes, and dental floss. Its production facility in Vietnam has ISO 9001 certification.
Osstem Implant Vina is a subsidiary of Korea-based Osstem Implant Co Ltd, which is engaged in the manufacture of dental implants. Osstem is active in several markets, including America, Germany, China, Taiwan, Hong Kong, Singapore, Thailand, India and Russia, among others.
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In Vietnam, its subsidiary is located in Ho Chi Minh City. It offers the company’s portfolio of products under the Osstem brand, which includes a range of bone-level and tissue-level implant systems, orthodontic screws, surgical kits and tools. It also imports and sells dental equipment, as well as provides dental implant training and guides.
Dentsply Sirona is an American dental equipment maker and dental consumables producer that markets its products in over 120 countries. As an equipment maker, it designs and manufactures laboratory and specialty products relating to dental supplies. With regards to consumable products, it specialises in anaesthetics, plaque and gum disease prevention (prophylaxis) and tooth polishers. It also designs and constructs artificial teeth. Dentsply Sirona Vietnam was established in 2016 and is located in the centre of Ho Chi Minh city with a showroom and a training room, aiming to attract customers that want to experience Dentsply Sirona's innovative products and state-of-the-art technology.
3.9.2 EU Entry Opportunities
European manufacturers of dental equipment looking for market opportunities in Vietnam will find that the country offers significant opportunities.
◼ European companies have the opportunity to capitalise on the nearly 100,000 foreign tourists that travel to Vietnam each year for dental treatment, which collectively brings in a revenue of about US$ 150 million (EUR 132 million) per year. These tourists are from developed countries and have considerable purchasing power, with Australia, the US and New Zealand topping the list.72 Local odontology experts have identified Viet Kieu (overseas Vietnamese) as a potential segment to target, as they often seek dental services when visiting relatives in Vietnam.73
◼ Equipment for new dental clinics and replacement of old equipment accounts for the good market potential for dental products, particularly in Hanoi and Ho Chi Minh City, which represent 80% of the entire dental market. In addition, all clinics that work with Vietnam Dental Tourism are required to purchase and utilise the most cutting-edge equipment and
72 https://english.vov.vn/travel/vietnam-launches-portal-on-dental-tourism-380878.vov 73 https://english.vietnamnet.vn/fms/business/177006/developing-dental-tourism-in-vietnam.html
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materials. The demand is set to grow as more hospitals and clinics look to tap into the highly lucrative dental tourism market.
◼ Dental hospitals and clinics in Vietnam need to optimise daily tasks like scheduling, treatment planning, billing, and file management. Most of these facilities are unfamiliar with cloud-based management platforms. A foreign startup, DentalTap, is looking to bridge this gap, and has already established a sales team in Ho Chi Minh City, with plans to connect first 100 clinics within the next six months, and scale sales across Vietnam within two years. There is space in the market for European companies with similar expertise.
◼ The growing purchasing power among local consumers is being translated to a higher demand for high-quality dental services. In particular, poor dental health remains a major concern among the country's youth.
European Players
IONYX
IONYX is a company that was founded in 1993 in the Bordeaux region in France. IONYX’s specialised endodontic products are designed, manufactured and fully tested in France. The apex locators and the micromotors designed by IONYX are at the cutting edge of technology and respond to market requirements.
Figure 28: IONYX endodontic products Source: IONYX
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IONYX has worldwide presence thanks to a network of distributors established in nearly 50 countries. At IDEM (International Dental Exhibition & Meeting) Singapore 2018, it met two Vietnamese distributors, and is now working with them.
For distribution in south Vietnam, it works with D.O.E. | Dentistry Of Excellence. This company, which was founded in 1997, is headed by Dr. Philippe Guettier, a renowned French endodontist. D.O.E. offers a wide range of specialised dental products from Europe, the United States and Japan. For north Vietnam, it works with Nam Dung Medical, which specialises in both the medical and dental fields, and is an exclusive reseller of endodontic files from Mani Schütz Dental.
IONYX products are being demonstrated regularly at seminars, conferences and workshops in Vietnam. One of the events was a seminar organised by Nam Dung, which was held on July 18 and 19, 2018, at the JW Marriott Hotel in Hanoi. At the event, Nam Dung introduced their new files and demonstrated how they work on IONYX machines. An endodontic specialist practicing at the University of Kuala Lumpur in Malaysia, was present to facilitate this conference. A hundred Vietnamese dentists attended the event, and 12 of them had the chance to participate in the training offered at the end of the conference.74
Kohler Medinzintechnik
With a staff of 80, Germany company Kohler produces instruments for use in dentistry, oral implantology and oral surgery. It is a leading manufacturer of dental instruments, which are sold in over 80 countries worldwide with an export quota of 85%.
74 http://www.ionyx.eu/news/ionyx-references-two-new-distributors-in-vietnam-%F0%9F%87%BB%F0%9F%87%B3-2321
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Figure 29: Kohler dental instruments Source: Kohler
In Vietnam, it is represented by a distributor, VietSong Healthcare Distributor, which specialises in the dentistry sector. VietSong, which is based in Ho Chi Minh City, also represents German brands Detax, oekoDent, MK-dent, and Italian brands Omnia and Zirkonzahn.
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4. Regulations
4.1 General Import Procedures
Vietnam, under both its WTO commitments and its domestic laws, extends import and export activities to “all foreign individuals and enterprises (including foreign-invested enterprises).” In effect, with import rights, a foreign-invested company: (i) can be the importer of record; and (ii) can sell its imported products to distributors (licensed wholesalers or retailers) in Vietnam; but (iii) with just import rights alone, it cannot sell its imported products to final consumers. Vietnam reserves the import rights for several product categories for state-owned companies.
Companies that do not have their own import license must work through licensed traders, who typically charge a commission of between one and two percent of the value of the invoice. Under Vietnamese law, the importer is the consignee. Therefore, it is important to identify a reliable importer with the ability to clear merchandise through customs quickly and efficiently. If a licensed third-party importer is used, the importer will handle customs clearance. If a foreign-invested firm imports products directly, it must make arrangements to handle customs clearance at the port.
Many foreign firms have complained that the administration of customs can be opaque and inefficient. Importers have claimed that duty classifications for the same product differ from office to office, and that even the same inspector may charge different rates for the same item at different times. Should the importer disagree with the classification, it can be appealed before the local Customs office, Customs Headquarters in Hanoi, or an administrative court. Companies also complain about arbitrary fees, the expectation of undocumented facilitation payments and other problems with the clearance process.
Customs issues will continue to play an important role particularly with recent import licensing hurdles including automatic import licensing rules, new country of origin rules, and more aggressive enforcement of customs duty collections. The right to import does not include the right to organise or participate in a goods distribution system in Vietnam.
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4.2 Medical Device Import Licence
The Vietnamese government encourages the import of medical equipment because local production cannot meet demands. Imported medical equipment has low import duties and no quota restrictions. However, medical devices are subject to regulation and licensing requirements set by MOH. Only companies with a legal business entity registered in Vietnam and that have an import license are eligible to distribute medical equipment. To fulfil this requirement, foreign suppliers often sell through local distributors or agents. Good representatives should provide immediate access to an established marketing network and possess in-depth knowledge of pertinent regulations.
The MOH determines the guidelines for medical device purchases for all health systems. Within the MOH, the Department of Medical Equipment and Health Works oversees medical devices. The Ministry of Science and Technology (MOST) performs regulatory functions for domestically made medical devices. The registration process for medical devices manufactured within Vietnam is different than for those that are imported. Imported devices are not required to be registered. Instead, a product-specific import license is utilised. In 2011, MOH issued Circular 24 to provide updated guidance on the import of medical equipment in Vietnam. European exporters should be aware of Article 5, which requires a Certificate of Free Sale to be copied and certified by the Embassy of Vietnam in the producing countries.
Imports of used and refurbished medical equipment are strictly controlled by MOH. Decision 2019/1997/QD-BKHCNMT stipulates that the MOST must inspect and certify all imports of used medical equipment. Because of the restriction, local companies are generally not willing to deal with foreign suppliers of used and refurbished equipment. In practical terms, MOH accepts used equipment for donation purposes only.
Both imported and domestic devices must also be granted a marketing authorisation (MA) license prior to being sold in Vietnam. MA licenses will need to replace all import licenses upon expiration of the import license.
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4.3 Medical Device Regulations
The Government recently issued Decree 36/2016/ND-CP regulating the management of medical equipment, including the classification of medical equipment; production, circulation, procurement, supply of medical equipment, medical equipment labels, and the management and use of medical equipment.
Decree 36 is considered the highest legal document to date on the management of medical equipment. Under Decree 36, all medical devices imported into Vietnam are required to register for marketing authorisation licenses. MOH began receiving registration dossiers on January 1, 2017 for medical devices categorised as Class A (low risk), and began receiving dossiers on July 1, 2017 for higher-risk medical devices in Classes B, C, and D.
◼ After a product is determined to be Class A, a declaration of applicable standards should be submitted to the local Department of Health. If approved, the Department of Health will issue a receipt note, and the Ministry of Health publish the device’s details online within 3 working days.
◼ After a product is determined to be Class B, C or D, an application for a free-sale registration number should be submitted to the Ministry of Health. If approved, the Ministry of Health will issue a receipt note, and publish the device’s details online within 3 working days.
The following chart describes the processes and the documents required.
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Registration Process in Vietnam
Class A Product Class B, C or D Products
Declaration of applicable standards Application for a free-sale registration submitted to the local Department of number submitted to the Ministry of Health Health Documents required: Documents required: • Application form • Class A application declaration • Classification table of medical • Classification table of medical equipment equipment • Certificate of conformity • Certificate of quality control • Certificate of eligibility to provide standards warranty • Letter of authorisation by the • Catalogue describing functions, owner of the medical equipment specifications, and other technical • Certificate of eligibility to provide information for device warranty • Written instructions for the device • Certificate of conformity • Device label • Written instructions for the device • Brief description of medical equipment • Device label (in Vietnamese) • Certificate of Free Sales • For class C or D devices, summary of clinical testing data • For class C or D In Vitro Diagnostic (IVD), certificate of inspection Department of Health will issue a receipt note
Department of Health will issue a receipt note Ministry of Health publishes the device’s details online within 3 working days Ministry of Health publishes the device’s details online within 3 Figure 30: Registration process in Vietnam working days
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4.4 Regulations on Telemedicine
To keep the regulatory framework in step with technological advances in telemedicine, on December 28, 2017, Vietnam’s Ministry of Health issued Circular No. 49/2017/TT-BYT Regulating the Management of Distance Medicine (“Circular 49”).
Circular 49 contains 14 articles covering issues such as, inter alia, the technical and IT requirements that must be in place for those engaging in distance medicine; applicable licenses and qualifications; requirements for providing distance medical advice, distance diagnostic consultations involving imaging, or distance surgical consultations; and requirements pertaining to distance training. A standard form for distance medical diagnosis, as well as a standard report form, is promulgated under Circular 49.
In terms of its scope of application, Circular 49 applies broadly to distance medicine diagnosis and medical advice in respect of “medical facilities, and agencies, organizations, and individuals related to distance medical activities within the territory of Vietnam, including organizations and individuals abroad connecting in distance medicine activities with Vietnamese medical facilities from abroad”.
The key provisions of Circular 49 include:
◼ distance medicine activities may only take place at facilities properly licensed under the Law on Health Examination;
◼ distance medical advice may only be given within the scope of the specialty set forth in the practicing certificate of the provider of the advice; and
◼ for distance diagnosis consultation involving images, the transmission of images must be on a 4Mbps or faster line, with additional regulations on the storage and compression of images.
Circular 49 enters into effect on February 15, 2018.
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4.5 Government Tenders
The Vietnamese government is the leading purchaser of goods and services in Vietnam. If provincial and municipal governments and state-owned enterprises are included, the potential for sales to this sector is very large. Bolstering state budget allocations, Vietnam is also the recipient of significant levels of Official Development Assistance (ODA). Infrastructure is the principal development priority for ODA, but other key sectors include transportation, telecommunications, energy, environmental/water, civil aviation, education, and financial services.
Government procurement is regulated by the Law on Public Procurement, 43/2013/QH13, approved on Oct 26, 2013, and Decree No 63/2014/ND-CP dated August 15, 2014, which contains stipulations related to selection of contractors. Government procurement funded by ODA loans and grants is normally governed by regulations on tendering of relevant donors in accordance with loan agreements between the Vietnamese government and donors.
Government procurement practices can be characterised as a multi-layered decision-making process, which, despite some recent improvements, often lacks transparency and efficiency. Although the Ministry of Finance allocates funds, various departments within the ministry or agency are involved in determining necessary government expenditures. Currently, ministries and agencies have different rules on minimum values for the purchase of material or equipment, which must be subject to competitive bidding. High value or important contracts require bid evaluation and selection and are awarded by the Prime Minister’s office or other competent body, except for World Bank, Asian Development Bank, UNDP, or bilateral official development assistance projects. Some solicitations are announced officially in the Vietnamese language newspapers such as Dau Thau, Nhan Dan, Lao Dong, and Saigon Giai Phong, and in the English language newspapers Vietnam News and Vietnam Investment Review. EU firms may also be able to register to obtain a consolidated listing of government or private tenders in Vietnam at Intellasia.75
The key to winning government contracts includes a high degree of involvement and communication between the foreign supplier, the local distributor or representative, and relevant government entities. Interaction should begin during the project planning stage. To secure orders in competitive bidding, it is
75 https://www.dau-thau.com/
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necessary to establish rapport and credibility, as well as to educate the procuring entity as to how the product or service can support project needs well before the bid is publicly announced. Although the timing for tender opening, bid closing and award notification varies from project to project and preparation of government budgets. Experienced foreign suppliers caution that even after awards are made, negotiations on price, specifications, payment terms, and collateral may continue for some time.
As part of the EU-Vietnam FTA, the two parties have agreed on disciplines in line with the Government Procurement Agreement (GPA) rules of the World Trade Organisation. This is particularly valuable as Vietnam is not yet member of the GPA. The government procurement chapter of the FTA achieves a degree of transparency and procedural fairness comparable to other FTAs that the EU has signed with developed and more advanced developing countries.76
Upon entry into force of the Agreement, EU companies will be able to bid for public procurement contracts under the same conditions as Vietnamese companies for a number of entities including all Vietnamese ministries at central level as well as 34 public hospitals directly under the control of the Ministry of Health.
Given its developing country status, Vietnam will benefit from differentiated treatment and/or transitional measures in certain areas. This particularly concerns threshold values. Only those procurement activities that are carried out by covered entities purchasing listed goods, services or construction services of a value exceeding specified threshold values are subject to the Agreement. For thresholds values, a transitional period of 15 years will apply across the board with a progressive scaling-down of thresholds up to a level comparable to those offered by other GPA members. For example, the initial threshold of 1.5 million Standard Drawing Rights (SDR) for goods and services for procurement done by central government entities would be gradually reduced to around EUR 160 000. Vietnam agreed to develop a central web portal for advertising procurement contracts. The web portal should be operational at the latest 10 years after the entry into force of the FTA. It is also of great importance for the foreign investors that summaries of procurement notices will be available in English.
76 http://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154622.pdf
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5. Annex
5.1 List of Useful Contacts
Hanoi University of Pharmacy Address: 15 Le Thanh Tong Street, Hoan Kiem District, Hanoi, Vietnam Tel: +84 24 3825 4539 Fax: +84 24 3826 4464; +84 24 3933 2332 Email: [email protected] Website: www.hup.edu.vn
Institute of Information Technology – Vietnam Academy of Science and Technology Address: A3 Building, 18 Hoang Quoc Viet Street, Cau Giay District, Hanoi, Vietnam Tel: +84 24 3756 4405 Fax: +84 24 3756 4217 Email: [email protected] Website: www.ioit.ac.vn
Vietnam Union of Science and Technology Association (VUSTA) Address: 53 Nguyen Du Street, Hai Ba Trung District, Hanoi, Vietnam Tel: +84 24 3943 2206 Email: [email protected]; [email protected] Website: www.vusta.vn
General Medical Association of Vietnam Address: 68A Ba Trieu Street, Hoan Kiem District, Hanoi, Vietnam Tel: +84 24 3943 9323 Fax: +84 24 3943 9323 Email: [email protected] Website: www.tonghoiyhoc.vn
Vietnam Medical Equipment Association Address: 40 Phuong Mai Street, Dong Da District, Hanoi, Vietnam Tel: +84 24 3576 5491 Email: [email protected] Website: www.hoitbytvn.vn
Ho Chi Minh Medical Equipment Association Address: 168A Bui Thi Xuan Street, District 1, Ho Chi Minh City, Vietnam Tel: +84 28 3925 6423 Email: [email protected] Website: www.hoithietbiytetphcm.com
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Ministry of Health Address: 138A Giang Vo Street, Ba Dinh District, Hanoi, Vietnam Tel: +84 24 6273 2273 Fax: +84 24 3846 4051 Email: [email protected] Website: www.moh.gov.vn
Ministry of Industry and Trade Address: 54 Hai Ba Trung Street, Hoan Kiem District, Hanoi, Vietnam Tel: +84 24 2220 2222; +84 24 2220 2210 Fax: +84 24 2220 2525 Email: [email protected] Website: www.moit.gov.vn
EU-Vietnam Business Network (EVBN) Address: 15th Floor, 5B Ton Duc Thang, District 1 Ho Chi Minh City, Vietnam Tel: +84 8 3823 9515 Website: www.evbn.org Email: [email protected]
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5.2 Starting a Business in Vietnam
Why Vietnam?
Vietnam is one of the major markets in South East Asia, as well as one of the fastest-growing economies in the world. The country enjoys low costs and regulations that encourage foreign investment, key elements that attract foreign entrepreneurs.
Located in the centre of ASEAN community, the country has a strategic location in the region, and it is close to other major markets in Asia, such as China. Its long coastline, direct access to the South China Sea and proximity to the world’s main shipping routes are ideal conditions for trading.
Vietnam recently amended its Investment Law in order to make investing in the country more transparent,77 and the country has signed into numerous trade agreements, particularly with the EU.
Registering your business
Vietnam is not a market for inexperienced exporters or firms that do not have a well-established export department in their business development unit. European companies preparing to enter the Vietnamese market must plan strategically and be persistent and consistent with face-to-face follow-up. It can take up to one or two years to make a successful sale in this market. Building relationships is important.
In general, European companies have the following options for business formation:
Joint Venture – A foreign joint venture is understood as an economic entity with at least one foreign company partner. Like all business formations, joint ventures have advantages and disadvantages. On the positive side, a Vietnamese partner can contribute crucial relationships with government officials and clients, local market know-how, access to qualified staff, and knowledge of land use rights. However, there are many potential challenges, including differences
77 http://bizhub.vn/news/amended-law-aims-at-more-transparent-investment-climate_4613.html
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in management styles and organisational cultures, as well as fundamental differences in outlook and objectives among the partners.
Representative Office (RO) – It is generally easy to establish but is the most restrictive form of official presence in Vietnam. The licence is issued by the Department of Industry and Trade (DoIT) in the city or province where the representative office is to be established. A representative office may rent office space or residential accommodations, employ local staff along with a limited number of expatriate staff, and conduct a limited range of business operations.
Branch Office – The term ‘branch’ office under the laws of Vietnam refers to an entirely foreign- owned business that operates in certain designated service sectors. These sectors, which are restricted and closely monitored by the Vietnamese government, include banking and finance, law, insurance, marketing and advertising, education, tourism, logistics, construction, and other types of services. Many foreign branch offices first entered Vietnam as representative offices and later applied for a branch licence. Branch status authorises a foreign business to operate officially in Vietnam, including invoicing/billing on-shore in local currency and the execution of local contracts.
Business Registration Procedure and Government Agencies
The Agency for Business Registration (ABR) is responsible for consulting the Minister of Planning and Investment in the state administration over business registration. Recently, the Government of Vietnam has launched the National Business Registration Portal (dangkykinhdoanh.gov.vn/en- gb/home.aspx) to simplify the procedures as well as to improve the transparency and efficiency of business registration. However, as the process can be challenging, EU companies are encouraged to seek advice from a competent law firm to evaluate the legal and tax implications of the various options and to review the most up-to-date regulatory information.
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Finding Agents and Distributors in Vietnam
According to current Vietnamese regulations, unless a foreign company has an investment licence permitting it to directly distribute goods in Vietnam, which includes invoicing in local currency, a foreign company must appoint an authorised agent or distributor.
Agents
A Vietnamese agent sells a foreign supplier's goods in Vietnam for a commission. In this case, the sale is normally transacted between the foreign supplier and a local buyer in Vietnam while the Vietnamese agent typically performs the following responsibilities: market intelligence, identifying sales leads, pursuit of sales leads, sales promotions, and often after-sales services. The specific responsibilities of a Vietnamese agent depend on the agency agreement between the agent and the foreign supplier. The risk of non-payment rests with the foreign supplier. Vietnam's Trade Law recognises the right of foreign companies to appoint agents if the Vietnamese agent's registered scope of business includes such activities.
Distributors
Under a distributorship arrangement, the question of legal protection and recourse is clear. The Vietnamese distributor buys the goods from the foreign supplier for resale in Vietnam and is usually liable for the full amount of the goods purchased. In many cases, a distributor also acts as an agent for the same foreign supplier and this typically occurs when a local buyer wants to purchase directly from the foreign supplier commonly in a contract of high dollar value.
Vietnam-based trade associations, chambers of commerce, and foreign commercial offices within EU member-state embassies are all good places to start the search for an agent or distributor in Vietnam. International business consultants with experience in helping foreign companies can also provide invaluable contribution by facilitating introductions to qualified partners. It is always best to meet a prospective agent or distributor in person and to check references.
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5.3 Useful Statistics
Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 364,775 359,132 407,042 434,263 491,960 United States of America 57,727 60,212 61,991 77,295 92,880 Germany 59,412 55,928 63,394 77,456 87,297 Japan 78,311 75,005 81,987 82,027 86,744 China 39,507 44,165 48,001 46,409 57,688 Republic of Korea 25,033 21,353 28,792 34,642 40,074 France 10,434 9,829 12,308 20,116 17,061 Switzerland 6,595 9,044 9,173 8,883 12,132 Mexico 3,844 4,246 5,435 7,356 10,738 Malaysia 14,010 13,047 10,280 9,277 10,000 Italy 4,647 4,294 3,765 5,851 6,987 Table 5: Imports of Instruments and Appliances Used In Medical, Surgical, Dental or Veterinary Sciences (HS Code 9018) Source: International Trade Centre Unit: US Dollar thousand
Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 4,406 3,737 5,383 4,244 4,033 Japan 1,737 1,498 2,258 2,164 1,964 China 1,085 772 637 580 667 United States of America 745 683 385 268 326 Germany 80 62 160 252 268 Canada 47 67 49 68 263 India 55 88 82 108 137 Republic of Korea 152 128 314 237 127 Austria 38 77 93 63 100 Mexico 35 11 83 69 58 United Kingdom 23 27 26 38 40 Table 6: Imports of Electro-cardiographs (HS Code 901811) Source: International Trade Centre Unit: US Dollar thousand
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Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 42,198 34,780 42,111 47,765 52,018 Republic of Korea 11,994 10,296 13,743 17,608 19,718 Japan 14,574 10591 12922 12273 12990 China 6639 8049 8082 6851 7851 United States of America 2000 1820 1908 4901 5487 Austria 1274 361 2793 1619 2112 Norway 285 577 562 864 1526 France 592 391 617 2219 1047 Italy 31 15 186 81 517 Malaysia 0 0 0 0 290 Australia 3 0 0 0 242 Table 7: Imports of Ultrasonic Scanning Apparatus (HS Code 901812) Source: International Trade Centre Unit: US Dollar thousand
Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 17,920 22,632 28,172 29,310 31,718 Germany 5,892 7,158 3,166 8,419 10,851 United States of America 2,579 2964 5668 6326 8551 China 2493 6326 8742 5697 7198 Japan 5320 3427 6606 6990 3982 Netherlands 590 900 1279 1124 852 France 0 0 182 754 257 United Kingdom 0 1343 0 0 27 Republic of Korea 407 1 76 0 0 Area Nes 0 0 20 0 0 Australia 639 0 0 0 0 Table 8: Imports of Magnetic Resonance Imaging Apparatus (HS Code 901813) Source: International Trade Centre Unit: US Dollar thousand
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Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 46,528 44,412 49,028 39,100 39,003 Japan 10,839 10,811 13,355 12,352 12,986 China 3,652 4030 4016 4282 6012 Republic of Korea 4124 3000 3009 3156 5859 United States of America 10589 7240 7697 5547 4045 Germany 7843 2854 4094 6485 3418 France 1961 1455 1455 481 1656 Finland 252 0 339 1699 1597 Austria 306 6792 6015 41 498 Mexico 1 3 2 110 364 Spain 356 549 587 11 286 Table 9: Imports of Electro-diagnostic Apparatus (HS Code 901819) Source: International Trade Centre Unit: US Dollar thousand
Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 6,418 8,043 8,307 13,173 14,788 Japan 701 1,150 1,467 2,526 3,599 United States of America 697 1430 1313 2086 3473 Germany 731 1024 1181 1959 2380 China 2006 2327 1732 1788 1893 Republic of Korea 538 623 520 1382 772 Australia 13 11 53 403 467 France 440 322 367 418 463 Switzerland 253 131 187 330 343 Spain 29 18 223 288 235 Austria 3 0 64 61 183 Table 10: Imports of Syringes (HS Code 901831) Source: International Trade Centre Unit: US Dollar thousand
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Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 39,178 45,629 42,292 43,370 52,242 China 4,703 6,600 6,242 6,396 9,435 United States of America 3,584 5030 4347 5117 7634 Japan 5952 9189 8834 7368 5741 Malaysia 11806 10587 7504 5433 5216 Thailand 2449 2595 2703 3221 3243 Germany 2820 1923 1864 2137 2815 Mexico 607 530 1272 1392 2218 Switzerland 541 894 605 1421 1935 Ireland 488 602 705 925 1502 Taiwan 320 355 512 881 1410 Table 11: Imports of Needles, Catheters, Cannulae and Similar (HS Code 901839) Source: International Trade Centre Unit: US Dollar thousand
Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 11,248 10,844 12,192 14,763 16,499 United States of America 1,550 1,546 1,997 1,706 2,707 China 1,353 1062 1284 1872 2075 Republic of Korea 918 979 1451 1618 1834 Germany 1239 1438 1003 2078 1391 Taiwan 932 708 880 1268 1277 France 404 337 338 675 921 Japan 1272 1492 1308 1084 898 Italy 70 132 107 492 738 Lao People's Democratic 254 434 557 582 730 Republic Austria 113 156 519 285 545 Table 12: Imports of Instruments and Appliances Used in Dental Sciences (HS Code 901849) Source: International Trade Centre Unit: US Dollar thousand
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Imported Imported Imported Imported Imported Exporters value in 2013 value in 2014 value in 2015 value in 2016 value in 2017 World 18,049 15,512 14,171 20,064 32,085 Germany 5,105 4,748 3,812 7,054 16,582 United States of America 5,017 4072 2285 3878 5630 Japan 3736 2792 3231 3736 4456 Switzerland 790 817 1566 1590 1535 France 1634 1319 1318 1171 1021 Republic of Korea 402 442 608 653 741 Italy 622 142 188 438 323 Australia 14 285 329 205 315 China 135 138 126 108 236 Slovenia 0 39 119 13 195 Table 13: Imports of Ophthalmic Instruments and Appliances (HS Code 901850) Source: International Trade Centre Unit: US Dollar thousand
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5.4 Bibliography
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Assessment of current state and trend of research and application of nanotechnology and nanosafety in Vietnam, 2015, Vietnam Environment Administration
Biomedicine: The Pillar Industry of the World’s Economy, 2014, Vietnam Law Insight
Boost for biotechnology industry in Vietnam, 2015, RMIT University
Connecting Vietnam’s isolated communities to improve healthcare, 2018, International Development Research Centre
Developing dental tourism in Vietnam, 2017, VietNamNet Bridge
Digital health in Viet Nam – not if, but when, 2017, Asian Development Blog
Female scientists contribute to developing nanotechnology in Vietnam, 2017, VietNamNet Bridge
First online video call medical counseling service launched in Vietnam, 2017, Nhan Dan
Fitbit Now Available in Vietnam, 2018, Firbit
Future Healthcare Solutions in Emerging Markets: Vietnam, 2015, Team Finland
Guide to the EU-Vietnam Free Trade Agreement, 2016, Delegation of the European Union to Vietnam
Healthcare – Vietnam, 2018, US International Trade Administration
Healthcare Bots Overhaul Vietnam’s Medical Records through Digital Transformation, 2017, Sturtup Beat
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Ionyx references two new distributors in Vietnam, 2018, Ionyx
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Medical firms aim for global market, 2018, Vietnam Investment Review
Microsoft showcases IT solutions to accelerate digital transformation in healthcare sector, 2016, Vietnam Investment Review
Mobile Health Initiatives in Vietnam: Scoping Study, 2017, JMIR Mhealth Uhealth
Modern medical equipment still cannot be fully exploited, 2017, VietNamNet Bridge
New microbial biotechnology platform launched in Vietnam, 2018, International Centre for Tropical Agriculture
Nipro starts work on new $300 million facility in Vietnam, 2017, Vietnam Investment Review
Overview of healthcare in Vietnam, 2018, ASEAN UP
Overview of Vietnam Healthcare and Medical Device Market, 2017, IPSOS
PHI Group Forms Joint Venture with Nanotechnology Company to Process Agricultural Products for Healthcare and Beauty, 2017, Nanotech Magazine
Poor dental health major concern among country's youth, 2015, Viet Nam News
Research Assessment 2-year results of implementation scheme Satellite Hospital in the 2013- 2020 period, 2015, Department of Social Health of Vietnam
Russia provides remote health care services to Vietnam, 2018, Nhan Dan
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Satellite hospitals increase medical treatment opportunities for rural residents, 2018, The Voice of Vietnam
Summary – Future Health Solutions in Emerging Market Service (Vietnam), 2015, Team Finland
Telehealth Goes Global: Bringing World-Class Healthcare to Remote Locations, 2016, Strategic Communications
The State of Clinical Research in Vietnam, 2018, TrialSite News
The state of Vietnam's clinical research capacity: Opportunities for growth, 2017, EPS International
Update: Vietnam’s New Cybersecurity Law, 2018, Hogan Lovells
UT Dallas Professor Creates Global Network for Audiology Information, 2017, The Hearing Review
Vabiotech Licenses Cell-Based Japanese Encephalitis Technology from Inviragen, 2013, Business Wire
Việt Nam expected to produce mixed vaccines in coming years, 2017, Viet Nam News
Vietnam Clinical Laboratory Market is Expected to Reach over USD 200 Million by 2022, 2018, Ken Research
Vietnam: Growing Demand for Healthcare Services, 2018, Vietnam Briefing
Vietnam imports large volume of medical equipment, 2019, The Saigon Times
Vietnam issues regulations on distance learning, 2018, Lexology
Vietnam launches portal on dental tourism, 2018, The Voice of Vietnam
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Vietnam Market Briefing in Imported Medical Devices, 2016, US International Trade Administration
Vietnam Medical Device Industry: Facts, Figures and Opportunities, 2017, BDG Vietnam
Vietnam Medical Device, 2016, EU-Vietnam Business Network (EVBN)
Vietnam produces turmeric-based nano-drug to fight cancer, 2016, VnExpress.net
Vietnam succeeds in producing effervescent tablets for stomach remedy, 2018, Nhan Dan
Vietnam to open public procurement market for foreign investors, 2018, VietNamNet Bridge
Vietnam, RoK cooperate in traditional medicine research, 2018, VietnamPlus
Vietnam: Telemedicine Project Kick-off, 2016, EPOS Health Management
Vietnam’s Emergence as a Global Leader in Dental Tourism, 2018, Saigoneer
Vietnam’s first biological nano-product manufacturing line put into operation, 2016, VietNamNet Bridge
Vietnam’s HealthTech Renaissance, 2018, Galen Growth Asia
Vietnam’s Quang Ninh Department of Health Selects Polycom Video Solutions for Remote Healthcare Consultation and Assistance, 2016, Polycom
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