Vietnam Healthcare Market

8/18/2019 Vietnam Healthcare Market

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Vietnam Healthcare Market Overview10 December 2015


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Australia Unlimited

Today’s webinar agenda

Introduction of speakers

The shift in ASEAN market – AEC & TPP impact

Vietnam healthcare market overview

Outline opportunities in hospital sector

Introduction to Medical Science & Health Services Mission toVietnam – July 2016

Q & A

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Introduction

Ms Janelle Casey – Senior Trade Commissioner, AustradeVietnam

Mr Dong Pham – Vice Chairman, Vietnam Private Hospital Association

Ms Minh Cao – Business Development Manager, AustradeVietnam

Ms Milena Bliss – Senior Trade Adviser – International Health,Sydney Australia

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Why Vietnam


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Vietnam – the next growing healthcare marketin ASEAN

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Large population, rapid urbanization & increasingspending power

Increasing demands for quality healthcare

Strong economic growth

Increasing healthcare expenditure

Next growing medical devices/ pharmaceuticalsmanufacturing industry

Global shift in ASEAN markets


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The shift in ASIAN market: impacts from AEC


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Opportunities inVietnam

Import of services forphysicians

Next in production of

and R&Dpharmaceutical andmedical devices

Manufacturing basefor medical devices

AECOBJECTIVES

Free flowof Goods

Free Flowof

Services

Free Flow ofInvestment

Free Flowof Capital

Free flowof skilled

labor

AEC impacts to healthcare industry

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Source: BMI, Frost & Sullivan

Harmonised requirementsfor inter-ASEAN licensing &permits for practice

Removed or lowered tariff /tax rates

Expansion & exporting ofservices such as medical &technical expertise

Expansion of pharmaceutical & medicaldevice manufacturers &

distributors

Easier medical businessexpansion & transfer ofcapital


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TPP Outcomes for Australia in the health sector

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Elimination of duties

Greater access & operating conditions

Improve competition level of Australianpharmaceutical & medical devicesmanufacturers

Ability to participate in tenders for government procurement contracts

For further information, visit www.dfat.gov.au/fta/tpp/

SINGAPORE

MEXICO

TPP Parties

JAPAN

VIETNAM

MALAYSIA

BRUNEI

AUSTRALIA

CANADA

USA

PERUCHILE


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VIETNAM HEALTHCAREMARKET


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Year 2014

Vietnam – the next healthcare market in ASEAN

Total healthcare spending

90% Medical devices are imported

Hospitals

Year 2020e

91million 97million

Large & fast growing Population

33.6% 36.9%

URBAN RATE19.5%

24.9%

4.9%

5.2%

13.3%

32.3%

Consumables

Diagnostic Imaging

Dental products

Orthopedics &prosthetics

Patient aids

Others

22.3%

25.4%

5.0%

5.9%

12.0%

29.3%

US$13billion

Year 2015

Year 2015 Year 2020e


Growing at 13.4%

Growing at 1.05%


1,090 1,204

200175

Public

Private

7.9 Doctors per 10,000 habitants

25.1 Hospital beds per 10,000habitants

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US$24billion

Pharmaceuticals market value

US$3.8billion

US$7.3billion

Growing at 14.1%


5.8% GDP

– highestin ASEAN

4th largest inASEAN

14th largestin the world

Source: BMI, Frost & Sullivan, World Bank


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Where we see opportunities

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Tele-health/ Tele-medicineHospital management &patient administrationsystemsElectronic health record

Research excellence inmedical products,technologies,

Robust regulatoryregime

Sophisticateddomesticpharmaceutical &health care system

Global leader in medicalscience & technologies:breakthroughproducts.

Extensive researchexpertise in developingnew therapeutics fortropical diseases

A global hub for medical research

Underdeveloped healthcare system

PPPprojects

Healthcareinfrastructure

Technology transferprojects

Drugs & vaccines

development /R&D

Emergencyresponse

Diseasesmanagement

Humanresources

Health IT

system

Hospitals &clinic

management

Education& training

NICHE medical &surgical equipment &

devices

General hospitalsupplies, laboratoryequipment


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Vision to turn Vietnam into a pharmaceuticalsproduction hub in the region

To have 80% of domestic demand met by local producers by

2020, up from ~ 50% currently

Focus on drugs, vaccines, blood and other biologics products

Calling investment from both domestic and foreign

organizations

Plans to invest US$241 million in eight projects within the local

drug manufacturing industry

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Pharmaceutical sector – risky but promising

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Top countries for imported

pharmaceuticals in Vietnam - 2012

80% ofpharmaceutical

are imported

Top quality

drugs aremainlyproduced by

foreignplayers Legislation

mandatesusing a localpartner forimporting &

product

registration

Governmentfocuses on

the productionof generic

pharmaceuticals

Highly-fragmenteddistribution

Largemarket size Joint

partnershipswill providequicker

market access

Tenderregulationsfavor local

manufacturers

Increasing regulation &compliance level

Low market entry barriers &Self-medicating culture

Universal Health Coveragedrives the needs for productionof generic pharmaceuticals

National drive to producehigh-quality pharmaceuticals

Key drivers and trends

FRANCE1th

2nd INDIA

US$ 235.9 mil

US$ 230.5 mil

3rd SOUTHKOREA

US$ 164.4 mil

4th GERMANY US$ 143.4 mil

5th ITALY US$ 93.9 mil

Increasing use of healthsupplements

Increase in the use of modern,self-medication & traditionalmedicine to self-diagnose

Increasing competitionbetween foreign & domesticcompanies

Increasing local support fordomestic products

Source: BMI, Frost & Sullivan


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Medical technology sector - fragmented

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FragmentedDistribution

Availability ofmany

diversifiedproducts

Multiplestakeholdersfor decision

making

Relationship-driven

business

High focus &resourcesrequired tosell medical

devices

Limitedexclusive

distributors

Small family-run

businesses

Distribution channels

RegionalSegmentation

Regional Provincial

Product/ OperationalSegmentation

DistributorsImporters &Distributors

4th party logisticscompanies

National


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… but poised for growth and change

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ASEAN Economic Community &ASEAN Medical Device Directive

Government vision to become aregional pharmaceutical genericsproduction base by 2020

Increasing investment in hospitalsector from both domestic &international investors

Biotech will assist the developmentof vaccines, higher-qualitypharmaceuticals, gene therapy,and IVF technology

Increasing activities of telemedicinein consultation, surgery, imaging,and cardiology

Increase in in-vitro diagnosticsand imaging equipment

Key drivers and trends

90% ofmedical

devices areimported

Attractivemanufacturingbase

Largelyfocused on

low-endmedicalconsumables

Lowmanufacturing

costsMed Tech is inits early stage

ofmanufacturing

Lowmarketentry

barriers

Growingdemand forhigh quality

healthservices


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Hospital sector

Mr The Dong PhamVice Chairman

Vietnam Private Hospital Association


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Developing public hospital sector is a priority

Market drivers

Healthcare expenditure is ~ 6% of GDP,highest in ASEAN region

Financial resources from WHO to develop

healthcare infrastructure

Government reducing barriers to newhospital set-ups

2011 –2015 eHealth Plan to improve healthIT applications

Aging society with decreasing birth rates

Collaboration between local manufacturers andforeign companies for local generics or low-end medical devices

Collaboration with distributors for joint venturesto move the distributor up the value chain

Expansion or joint ventures in both urban and ruralareas; data warehousing to increase efficiency &data tracking between vendors and hospitals

Systems adoption to link up private andpublic hospital information systems.

Aged care services or IVF specialty clinics orproducts.

Opportunities

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While private hospital sector continues to grow

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Growing sectordue to

overcrowdingissue in public

hospitals

Increasing ITinfrastructuredevelopment

Demand forprivate,

affordablehealthcareservices

Autonomy topurchase

directly fromdistributors asTender is not

required

Governmenttax incentive

for newhealthcare

servicefacilities

Lowoccupancy

rates at somehospitals can

lead toclosure

High demandsfor training in

hospitalmanagement

Collaborationwith public &

privatehospitals forspecialised

services

Opportunitiesfor aged care

services tosupport the

agingpopulation

ForecastedCAGR of

13.4% to 2020


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Via foreign investments & privatisation process

The Decree 93/NQ-CP on “Somemechanisms and policies to develop healthcare” - approved on 15 December 2014,facilitates cooperation between publicand private health care sectors

Public hospital privatisation in Vietnam: 1st

privatisation of public hospital:TheVietnam Central Transportation Hospital,

The cooperation between CityInternational Hospital and Cho RayHospital

Foreign medical suppliers are able toprovide services via

100% foreign-invested hospitals

JV with Vietnamese partners

Business cooperation contracts with

local medical service providers

PPP agreements allow doctors to work inboth public and private healthcare facilities

JV example

Canadian Triple Eye Infrastructure

Corp & Dai An JSC Co.

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PPP & Hospital privatisation Foreign Investment

http://giaothonghospital.vn/gioi-thieu-benh-vien/gioi-thieu-ve-benh-vien-giao-thong-van-tai-trung-uong-18.htmhttp://giaothonghospital.vn/gioi-thieu-benh-vien/gioi-thieu-ve-benh-vien-giao-thong-van-tai-trung-uong-18.htm


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PPP projects in hospital infrastructuredevelopment

Project Location Investmentcapital (US$)

Investmentmodel

ProjectGovernance

1 Obstetrics –paediatrics hospital

Binh Dinh 24 mil PPP Binh DinhDepartment ofPlanning andInvestment

2 Ha Tinh obstetrics –paediatrics hospital

Ha Tinh 17 mil PPP Ha TinhDepartment ofPlanning andInvestment

3 International generalhospital

Gia Lam,Hanoi

200 mil PPP Ha NoiDepartment ofPlanning andInvestment

4 Phu Xuyen GeneralHospital

Phu Xuyen,Hanoi

161 mil PPP Ha NoiDepartment ofPlanning andInvestment

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SAIGON ITO HOSPITAL GROUP


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Demands forhealthcare in

Vietnam are unmet

Long-term potentials inmedical technology

market

• Driven by the national initiative forlocal drugs & medical devicesmanufacturing

• AEC & TPP in place

• Strong foreign investment

Vietnam may become thegeneric drugs manufacturing

hub in the region

• Government focus sector

• Low-cost production & competitiveenvironment

• Lower business boundaries due to AEC &TPP

Vietnam – a market full of potentials

• Hospitals overcrowding

• Under-served rural population

• Poor adoption of technology

• High-quality drugs are mainlyimported

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Medical science &

health servicesmission to Vietnam

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Led by Professor IanFrazer

Opportunities to

showcase• Products

• Equipment

• Technology

• Systems

• Services, education andresearch

Obtain market insights,first-hand marketunderstanding

Increase brand awareness

Chances to establishconnections with

• Industry key stakeholders

• Potential customers,distributors and partners

• Key market players

• Education and traininginstitutions Site visits, business

matching activities, networking functions,research workshop

Leverage the Australiangovernment badge

Hanoi & Ho Chi Minh City18th to 22th July 2016

Develop business &collaboration opportunities


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CONTACT AUSTRADE

In Australia: 13 28 [email protected]

In Vietnam: +84 8 3827 0600

[email protected]/Vietnam

www.exportawards.gov.au

www.australiaunlimited.com

Disclaimer: Austrade does not endorse or guarantee theperformance or suitability of any information introduced in thispresentation or accept liability for the accuracy or usefulness ofinformation contained here within. Please use your commercial

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Documents

Vietnam Healthcare Market