By INS Contributors

KUALA LUMPUR, Malaysia--The launch of the U.S. Centers for Disease Control (CDC) and Prevention Southeast Asia Regional Office in Hanoi, is the latest recognition in the strides forward Vietnam has made in the field of healthcare, especially public healthcare.

The new regional office strengthens CDC’s ability to meet its mission of protecting Americans and people of the region by responding more rapidly to health threats wherever they occur and building key relationships to tackle shared health priorities, the CDC said in a statement.

U.S. Vice-President Kamala Harris, who launched the center also referenced the progress the two countries have made, telling Vietnam’s president that “our relationship has come a long way in a quarter of a century.”

She also embraced elevating the relationship with Vietnam from a comprehensive partnership to a strategic partnership, a diplomatic designation that would reflect the deepening ties between the two countries.

Investing in the people’s health

In 2019, Vietnam's healthcare expenditure was approximately U.S.17 billion, equivalent to 6.6 percent of its GDP according to Fitch Solutions. The firm also expects that healthcare spending will reach U.S. 23 billion in 2022 at a compound annual growth rate (CAGR) of 10.7 percent.

This follows a steady trend of increased expenditures on health per capita by the Socialist Republic, going from U.S. 118 in 2015 to U.S. 124 in 2016, U.S. 140 in 2017 and U.S. 152 in 2018, reflecting the sensitivity of the country’s leadership on matters of health.

Vietnam's potential for healthcare investors

The political and social stability of the country has long attracted investors for a variety of businesses and industrial sectors but an emerging one is Vietnam as an attractive investment destination for the healthcare sector.

A growing middle-class together with rapid economic development means the country has a large population that seeks higher quality and specialized healthcare services together with a governmental policy to increase its network of hospitals, making for a large healthcare market with boosted demand.

The country’s Ministry of Health estimates the country’s medical equipment market will grow at a rate of 18 to 20 percent from 2016 to 2020, of which 90 percent is imported and besides the potential of local manufacturers, the government encourages the import of medical equipment by setting low import duties and no quota restrictions.

Medical device producers can also look forward to opportunities created by trade agreements such as the European Union Vietnam Free Trade Agreement (EVFTA) with the simplification of customs procedures expected among other benefits.

Expanding healthcare network

Some 1,531 hospitals have been built in the country with more under construction. There are 1,318 public hospitals administered in a decentralized system, classified at the central, provincial, and district or commune level.

Medication is mainly distributed through this hospital network but an increasing number is sold through pharmacies, with an increase in knowledge, demand and the pandemic pushing the demand, translating into financial growth for the country’s pharmaceutical sector.

The country’s largest pharmaceutical firm, DHG Pharmaceutical Joint Stock Company had a U.S. 5 million profit, which represented a 31 percent year-on-year increase.

Even before COVID-19, Vietnam had already seen a greater digitalisation of healthcare products and services which provide booking services that allow patients to schedule appointments with doctors without visiting hospitals, thereby reducing long queues and minimizing infection risks. Patients are able to discuss their health concerns and obtain answers from healthcare professionals.

The sector, seeing increasing growth globally is expected to attract more interest and see its development and growth accelerated as these systems become more accessible and due increased awareness in health issues.

Building on success against COVID-19

Vietnam has already garnered a reputation for effective pandemic control against the COVID-19 pandemic, seeing just over 10,000 cases between March 22 last year and June 10. However there has been a recent increase in new cases over the past month, mainly due to new variants including Delta.

These numbers pale in comparison to its regional neighbours: Indonesia with 4 million infections, Philippines with 1.8 million, Malaysia with 1.6 million and Thailand with 1.1 million, with the remaining Association of Southeast Asian Nations (ASEAN) member states recording tens to hundreds of thousands of cases except Brunei.

The pandemic has dampened some economic activity, but it is unlikely to reverse ongoing socioeconomic changes. Rather, health stands firmly as the top priority and concern for both the Vietnamese people and the government.

The country has shown its ability to adapt to the challenges and has reached an advanced stage of its own COVID-19 vaccine, developed by VinGroup, the country’s largest conglomerate expected to produce some 100 to 200 million vaccines annually, following trials.