The healthcare system in Vietnam consists primarily of hospitals and commune health stations. Commune health stations mostly take care of vaccine intakes for infants and young children, and women’s birth delivery in rural areas. There is serious lack of quality hospitals (those that offer standard healthcare) leading to excessive crowdedness in top or central public hospitals (most of which are based in Hanoi and Ho Chi Minh City) and simultaneously low occupancy in rural areas and small cities/ towns. However, there is more and more private quality hospitals including foreign-owned facilities built and operated in the country.

As of 2015, there are about 1,246 hospitals (85% of which are public) and 13,500 commune health stations. As of 2017, the number of beds per 10,000 people is 25.7 (close to world average of 30). Despite this, the government has funded inadequately for medical equipment, leading low medical standards, which perhaps causes such a low health index for the country, among other factors such as quality of healthcare service, patient concentration, etc.

Unofficially, pharmacists are primary healthcare providers whom patients consult with and receive both OTC and prescription drugs. As a matter of fact, 45% consumers would take OTC drugs for minor ailments as soon as symptoms emerge. This is largely because patients are afraid of waiting in long queues in [quality, public] hospitals and the majority of people are not covered by health insurance or do not appreciate the mechanism of the State’s health insurance. Pharmacies are as ubiquitous as convenient stores or mom and pop department stores. Pharmaceutical companies rely heavily on pharmacies to do well. According to market predictions, by 2023, OTC sales are likely to reach USD 3 bn. Therefore, promotions and brand advertising will be the defining point for pharmacies in the consumer sector due to the locals’ nationwide patronization of OTC drugs.

Local pharmaceutical companies in Vietnam do not have strong reputation among the locals, so the market relies heavily on medicine imports from other nations. Vietnam’s domestic drug makers comprise only 40% of the total medicine market (mostly the OTC segment) while imports of raw material used in drug production represents around 90%.

As a result of low service quality and underserved needs, a significant number of Vietnamese high net worth individuals (roughly USD40,000 a year) have traveled to neighboring countries notably Singapore as medical tourists, spending around USD 200 million a year – despite a growing number of foreign-invested and local private hospitals built and operated in Vietnam in recent years.

Vietnam-France Hospital (Hanoi) and FV Hospital (Ho Chi Minh City), both 100% French-owned, were the first foreign-invested hospitals in Vietnam (1997 and 2003, respectively). Hoan My Hospital was the first local private hospital to be acquired by foreigners (2011 – 20%, 2014 – the remaining stake, by Clermont Group). Barriers to entry for foreign investment in hospitals have been greatly relaxed over time.

Numerous opportunities for foreign and local investors in Vietnam’s healthcare industry include:

  • Vietnam is a good source for importation of healthcare products and services. Leading global pharma firms such as Pfizer, Novartis, Bayer, GlaxoSmithKline, etc. have all been present in different formats to promote their products.
  • Foreign ownership is strongly encouraged in building new hospitals and clinics.
  • The government is having ambitious plans and determination to build new hospitals, expand/upgrade existing hospitals, in both public and private ownership (private participation is strongly incentivized).
  • Many existing public hospitals currently have needs of upgrading medical equipment to stay abreast of newest technology and trends in the global healthcare. 90% of medical medical devices in the market are imported.