Demand for pharmaceuticals and medical equipment continues to increase but domestic production cannot meet requirements.
Hanoi and Ho Chi Minh City are the two major medical equipment markets in Vietnam. The country spends hundreds of billions of Vietnam dong annually on importing medical equipment because domestically-made products only satisfy around 50 percent of demand.
In 2009 there were 600 categories of medical devices examined and licensed for circulation by the Ministry of Health (MoH). But these are mainly simple equipment such as surgical implements, beds, syringes, rubber gloves, steriliza- tion chambers, etc. In recent years local scientific research units have success- fully manufactured laser therapy devices, medical waste incinerators and high frequency electric scalpels, among others, but quality has not been high.
“Modern medical equipment plays an important role in diagnosis and treatment,” said Ms. Cao Thi Van Diem, Deputy Director of the Institute of Engineering and Medical Equipment “But Vietnamese production technology for medical equipment is poor and private clinics have only recently begun importing such equipment.”
“Our patients demand high quality equipment and all of ours is imported, as well as 95 percent of our pharma- ceuticals,” said Dr. Vo Van Ban, Deputy General Director of the Hanoi French Hospital. “But there are many types of pharmaceuticals produced domes- tically with high quality. We support and encouraging the use of high quality Vietnamese products to put the interests of consumers first, both in quality and price.”
There is still very much a preference for foreign medical equipment and pharmaceuticals, even though there are many domestic products that do actually meet high quality standards and are the equal of imports but cheaper. Yet many health centers and hospitals purchase imports out of concern over quality.
With diseases showing signs of becoming more widespread, demand for advanced medicines and medical equipment will rise significantly in the future. For example, Hanoi French Hospital treats 100,000 out-patients and conducts 3,700 surgeries each year.
According to information presented at the “Investment in the Pharmaceutical Sector towards 2020” conference, organized by the Ministry of Health in July, domestic pharmaceutical production meets 50 percent of local demand in the pharmaceutical industry. Difficulties for local enterprises mainly relate to investment capital, equipment and prices, with capital shortages impacting on research and development and, therefore, quality.
Minister of Health Dr. Nguyen Thi Kim Tien said that competition between imported and domestic products depends on many factors, such as quality standards and reasonable prices. Hospitals, she added, should be encouraged to use domestic products, and investment projects should consider the needs of users.
“This is a good time for businesses interested in the medical sector as there are government support policies, although there are also difficulties, especially in land planning by the government, but for investors with a good vision the sector has potential,” said Dr. Ban from Hanoi French Hospital.
There are more than 1,000 enterprises producing or importing and exporting pharmaceuticals and medical equipment, and handsome profits can be made. According to the Vietnam Securities Analysis Department (VCSC), in the last five years the average per capita health expenditure in Vietnam has more than doubled, with average growth forecast at 15 percent per year, and consumption value reached US$1.6 billion this year.
The medical industry is now being given priority for development, with the government promoting investments in pharmaceuticals to turn it into a key economic sector. This presents opportunities for enterprises in expanding markets and creating joint ventures to succeed.
The Government has already adjusted laws, regulations and macroeconomic policy to meet international conventions and create a more positive investment environment. With Vietnam becoming a member of the WTO, its enterprises also have the opportunity to improve competi- tiveness, cooperation, and technology transfer.