Vietnam Pharmaceuticals & Healthcare Report 2017
BMI Industry View
BMI View: Vietnam will be a highly attractive market for private healthcare providers in the region.
Beyond the expected strong increases in healthcare spending, there are also significant service gaps in the
market that will provide revenue earning opportunities to companies looking to invest in the sector. These
stem from the underdeveloped state of the public health sector characterised by overcrowded hospitals and
patients with limited access to advanced medical treatments. This will in turn affect the strategies employed
by pharmaceutical firms, as private hospitals will present an alternative sales channel for high value
Headline Expenditure Projections
■ Pharmaceuticals: VND80.73trn (USD3.81bn) in 2014 to VND92.47trn (USD4.17bn) in 2015; +14.5%
in local currency terms and +9.4% in US dollar terms. Forecast unchanged from last quarter.
■ Healthcare: VND234.91trn (USD11.08bn) in 2014 to VND258.67bn (USD11.66bn) in 2015; +10.1% in
local currency terms and +5.2% in US dollar terms. Forecast unchanged from last quarter.
Table: Headline Pharmaceuticals & Healthcare Forecasts (Vietnam 2013-2019)
2013 2014 2015f 2016f 2017f 2018f 2019f
Pharmaceutical sales, USDbn 3.295 3.808 4.167 4.586 5.222 5.938 6.715
Pharmaceutical sales, % of GDP 1.93 2.05 2.19 2.29 2.33 2.35 2.37
Pharmaceutical sales, % of health expenditure 32.5 34.4 35.7 37.0 38.1 39.0 39.7
Health spending, USDbn 10.146 11.081 11.655 12.386 13.702 15.227 16.925
f = BMI forecast. Source: WHO, National Sources, BMI
Risk Reward Index
Vietnam's Pharmaceutical Risk Reward Index score for Q116 is 48.4 out of the maximum 100. The country
scored above average for overall market expenditure and sector value growth. Consequently, with this
moderate score, Vietnam is ranked 12th (same as in the previous quarter) out of the 19 key Asia Pacific
markets, level with Thailand and Indonesia.
Key Trends And Developments
■ As announced in September, under a new circular issued by Vietnam's Ministry of Health and Ministry of
Finance, patients will be allowed to pay hospital fees through their health insurance for health
examinations and treatments on weekends and holidays as long as the correct number of medical
personnel are present and assure proper professional conditions with enough equipment; the circular is
expected to Giúp working people who face difficulties coming to check ups and treatments on weekdays.
■ In September, Vietnam's education and training ministry has ordered the department of education and
training, universities and colleges to increase awareness on health insurance programmes amongst
students, pupils and parents in a move towards universal health coverage in the country. Based on the
country's social insurance data, social health insurance covers 85% of students and pupils at present and
the participation rate is low due to poor attention being given by some educational establishments,
ineffective communication and insufficient collaboration between the education department and the
health and social insurance sectors.
■ As announced in September, the Japanese government is promoting its healthcare and preventive
medicine industries to foreign markets and Vietnam is among the targeted countries, according to the
Japan External Trade Organization's Director Yasuzumi Hirotaka. Heart diseases, diabetes and obesity
are among the biggest risks threatening the Vietnamese and people with rising incomes prefer better,
premier healthcare services that Japanese businesses can offer.
BMI Economic View
We expect Vietnam's fiscal revenue growth to accelerate on the back of a robust economy, ongoing SOE
reforms and the positive tax reform policies that have been implemented in recent years. That said, a
continued lack of spending prudence by the government will act as a drag. As such, we forecast the
country's fiscal deficit as a share of GDP to narrow marginally to 4.9% in 2016, from an estimated 5.0% in
BMI Political View
Political and economic ties between Vietnam and Japan look set to strengthen further over the coming
years, as both countries seek to forge a strategic partnership to counterbalance China's growing
assertiveness in the region.
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