In recent years, Vietnam has experienced significant economic and demographic changes that indicate great potential for the healthcare industry. With a growing population nearing 100 million and personal income and life expectancy on the rise, nationwide healthcare spending is expected to grow exponentially in the coming years. In fact, the country’s healthcare expenditures are already quite substantial. In 2019, healthcare spending by Vietnam was approximately US$17 billion (6.6% of GDP) and is projected to reach US$23 billion this year (2022) with a compound annual growth rate (CAGR) of 10.7 percent. Besides the overall trends, this growth rate is partially attributable to the government’s encouragement of cost sharing partnerships between public and private healthcare providers. It is also fuelled by more Vietnamese citizens obtaining insurance coverage (with private healthcare expenditure in Vietnam expected to increase at a CAGR of 7.5%). As the worldwide Covid-19 pandemic continues, this upward trajectory, and people’s focus on their well-being, is set to continue for the foreseeable future.
For pharmaceutical and medical device companies, manufacturers, healthcare providers, insurers, and others, these developments signify an exciting opportunity for investment. The Ministry of Health (MOH) is the main regulatory authority in Vietnam. Under the MOH, the Department of Medical Equipment and Health Works (DMEHW) has jurisdiction over the import of medical devices and the Ministry of Science and Technology (MOST) performs regulatory functions for domestically made medical devices. The Drug Administration of Vietnam (DAV) and Vietnam Food Administration (VFA) regulate pharmaceuticals and food supplements. The laws in the healthcare industry are continuously amended and refined (for instance, Decree No. 98/2021/ND-CP, which took effect on January 1, 2022, and provides numerous amendments regarding medical device classification, trials, and registration). Further, the regulations often overlap with other laws and agencies, such as insurance and investment. As such, both foreign and domestic entities need to be attuned to the latest legal developments.
To enter or expand in Vietnam, foreign businesses may do so indirectly through the appointment of an agent or distributor. Healthcare entities new to the country should conduct due diligence on potential local agents/distributors to ensure they possess the requisite permits, facilities, and human and financial resources. Firms that seek to establish themselves directly in Vietnam may form a commercial operation and obtain a representative office license, a branch license, or a foreign investment project license under Vietnam’s Foreign Investment Law.
The pharmaceutical, medical product, healthcare industries have far-reaching scope and are integral to daily life in Vietnam and beyond. This importance and focus has increased exponentially with the advent and duration of the ongoing worldwide Covid-19 pandemic. However, challenges for healthcare entities remain including market saturation, complex regulatory compliance, developments in the law for new products, R&D cost inflation and outdated and underfunded medical facilities. To succeed in the healthcare market in Vietnam, thorough planning, flexibility and the ability to access and deploy the right funding and growth strategy are critical. It is strongly advisable to have a knowledgeable and experienced legal partner by your side to assist your business to achieve its goals.
Corporate Counsels’ attorneys provide critical advice to healthcare businesses on virtually all stages of the client’s lifecycle, from establishing a presence in Vietnam and marketing new products to responding to agency enforcement actions. Our clients include biotechnology and pharmaceutical companies, medical device manufacturers, importers and exporters of healthcare products, hospitals, investors, and insurers. Corporate Counsels has decades of combined experience in the healthcare industry and our services range from reviewing of marketing practices, corporate compliance, due diligence, intellectual property, employment and labor, taxation and advice on manufacturing practices, amongst many others. Drawing on our in-depth knowledge of the industry, Corporate Counsels utilizes a multidisciplinary approach to advise clients on taking advantage of opportunities, managing risk, and providing holistic solutions to achieve their business goals.
Corporate Counsels provides critical advice and support to our healthcare industry clients including:
- Commercial contracts;
- Establishment of representative and branch offices;
- Digitization including data protection, privacy and cybersecurity;
- Employment and labor;
- Debt equity, finance and investment;
- Distribution and agency agreements;
- Foreign investment project licences;
- Intellectual property;
- Joint ventures and strategic partnerships;
- Medical device registration and import licensing;
- Mergers & Acquisitions;
- Real estate and manufacturing facilities;
- Regulatory compliance;
- Trade and commerce advice and licensing (import, export, retail, wholesale)