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The Market Overview and the Related Regulations of Medical Devices in Vietnam

Most of the population in Vietnam is gathered in the alluvial deltas and coastal plains region. Hanoi, the capital, and Ho Chi Minh City, the largest city, are within the area. Vietnamese government has undertaken economic reform and open policy after the Vietnam War and in January 2007 became a member of the World Trade Organization (WTO) to attract more foreign investors to actively participate in the market.

Vietnamese government has authorized the establishment of private medical institutions since 1989; therefore, the private hospitals and clinics have grown substantially; especially in urban areas. The effectiveness of private clinics and surgery has been significantly improved.According to the latest data of the World Health Organization (WHO), in the national healthcare expenditures, private medical institutions accounted for 67.6% and public medical institutions accounted for 32.4%.Vietnamese government had the national health insurance law passed in November 2008 and enforced in October 2009. The goal is to have all citizens covered by the national health insurance in 2014. The enforcement of the national health insurance is to stimulate growth in related industries, such as pharmaceuticals, medical devices, and hospital investment.The medical device market in Vietnam is with great potential. Vietnamese government expects in 2009-2013 to invest 45.2 trillion VND (about US$2.5 billion) for the construction or upgrade of specialty hospitals in mountainous areas and poverty areas and provincial general hospitals in order to activate the development of medical industry and market.

The market overview of Medical devices

The Vietnamese medical device market in 2011 amounted to US$599 million and is expected to reach US$1.047 billion in 2015 through the promotion of the governmental policy and the attraction of foreign investors; also, the compound annual growth rate will reach 15.3% in 2011~2015.

According to the further analysis of the medical device market structure in Vietnam in 2011, diagnostic imaging product is the main item, accounted for 27.0%; followed by medical consumables that accounted for 14.5%, in which, syringes, needles, and catheters accounted for 13.8%; orthopedics and implants accounted for 5.1%; and dental products accounted for 3.8%. For the overall healthcare market, orthopedic implant product is with the strongest growth for an amount of US$66 million in 2011 to US$308 million in 2015, the compound annual growth rate will reach 36.1% in 2010~2015.

Fig. The Vietnamese medical device market analysis
Figure. Market Analysis of medical products in Thailand 
Data source: Espicom (2012); ITRI IEK compiled (2012/08)

The local production of medical devices in Vietnam is limited to basic medical device, such as, syringes and hospital beds. It is lack of advanced manufacturing technology. Therefore, it needs to seek for the technical support from foreign medical device manufacturers, such as, B Braun, General Electric, and Shimadzu. Even so, the transnational production remains the minority.

According to the import/export analysis, the Vietnamese medical market relies heavily on imports, accounted for 90.7%. Diagnostic imaging product is the largest imported item, accounted for 23.1% of the total imports, in which, X-ray machine is with the largest growth; the category of orthopedics and implants is with the highest growth; especially the artificial organ is with 18.5% growth.

According to the export analysis, Vietnam exports are mainly the low-end products. In terms of export items, the category of orthopedics and implants is the largest export item, accounted for 44.7% of the total exports, in which, the hearing aid product is with 25.3% growth. The growth rate of medical devices is the highest and strongest for 36.1%, including syringe needles, catheters, and cannulas.

The regulations of Medical devices and specifications

Vietnam has no specific medical device regulations in place for supervision; however, the Ministry of Health has prepared a list with a range of high-end diagnostic medical device and basic medical device. All medical device traded in Vietnam must pass the inspection and registration of the Ministry of Health; also, an application for registration must be filed and obtained for the sales of imports. The Application for Registration is processed promptly and the applications filed by the applicants who have acquired international certification will be grated without any difficulty. Vietnam is lack of medical device manufacturing capacity and technology; therefore, it relies heavily on imports, under the circumstance, importers have great opportunities to generate profits.

According to the regulations of Vietnamese government, only Vietnamese companies can set up medical device distribution offices in Vietnam. Foreign companies must sell their medical products through these local distributors and agents. In addition to the law and regulations, the buyers in Vietnam, especially in the public sector, often purchase from the dealers, including delivery, after-sales service, and spare parts. Therefore, the control of the existing distribution channels or becoming an agent will affect product sales. Hospital purchasing is mostly seeking for total solutions; therefore, the establishment of a complete product line or the setup of a joint venture for providing total solutions will help enhance the willingness of the hospital in procurement.

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Namha Pharmaceutical joint-stock company

Trade name: Namha Pharma

Head office: 415 Han Thuyen – Nam Dinh – Vietnam

Tel:  84-0350-3649408      Fax: 84-0350-644650

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