Vietnam’s desire to modernize the healthcare system should generate plenty of business opportunities in the upcoming years. The first area Vietnam will need to improve is the network of hospitals. Modernizing hospitals will require heavy investment and funding that Vietnam will not be able to fulfill through traditional sources alone.
The master plan clearly indicates that the government is encouraging the creation of new privately funded hospitals and clinics. This new private healthcare infrastructure may position itself to service the high end segment of the healthcare market tapping into the significant spending by local patients going abroad for operations and other treatment that could be handled domestically. It is currently estimated that every year US$1 billion is spent by over 40,000 Vietnamese patients travelling abroad for healthcare services.
In addition to new hospitals, opportunities also exist in relation to healthcare products and more specifically medical equipment and drugs. In order to improve the Vietnamese healthcare system, the Vietnamese government must modernize its outdated equipment and grant broader access to drugs. The U.S. Commercial service has estimated in a public report published in June 2014 that the medical equipment market would be amongst the fast growing in Vietnam for U.S based manufacturers given the urgent need to replace old medical devices in hospitals. Market research specialists like BMI also predict double-digit growth in the next few years for both the medical equipment and drug markets.
Yet growth in these segments is subject to the evolution of regulations related to importing –and, for the pharmaceuticals segment, of the regulation regarding domestic production. Vietnam still relies heavily on imports for medical products. The hospital bidding process remains too complex and time consuming. The modernization of the Vietnamese healthcare system will require better access to up-to-date equipment and drugs and will need to go hand in hand with a simplification of the current regulatory environment and bidding processes (or at least make it more transparent for foreignplayers).
This could lead to promising business opportunities, of course for exporters, but potentially also in the medium to long term for foreign companies setting up domestic manufacturing operations. That is the objective of the pharmaceuticals master plan which set an ambitious objective of substantially developing domestic production by 2020.