Vietnam’s MedTech Industry:

Building a Solid Business

Foundation to Ride the Next Wave
of Growth
August 22, 2023Posted by Vietnam Briefing
Written by Minh Nhat Dao Reading Time: 5 minutes

Vietnam’s digital transformation goals, along with two years of COVID-19 outbreaks, have
accelerated digital disruption in the healthcare industry. This has boosted efforts to digitize
the healthcare sector, including incorporating Big Data and Artificial Intelligence into digital
health applications. Here’s what that might mean for foreign firms.

Vietnam’s digital-savvy population, as well as high internet penetration and smartphone usage,
have served as effective facilitators for MedTech innovations, according to research conducted
by Nourhan Shaaban for the Massachusetts Institute of Technology (MIT).

However, there are still challenges that firms should be aware of. Deficient regulatory
frameworks and strictly governed policies can pose difficulties when starting a MedTech
business in Vietnam. Understanding these critical challenges, however, can give firms a
competitive edge in making the most out of the significant potential in Vietnam’s MedTech
industry.

Vietnam’s MedTech industry in numbers

Healthcare spending in Vietnam is predicted to increase at an annual rate of 9.2 percent from
2009 to 2025, reaching US$262 per capita, according to AmCham Vietnam. VIRAC
research also shows that Vietnam’s healthcare market has witnessed significant growth in
recent years, with expenditure on healthcare products and services increasing by 11 percent
over the last decade. According to Statista, digital health revenue reached US$968.2 million in
2023 and is expected to increase by 1.5 times that number by 2027.

This growth is mainly attributable to shifting demographic headwinds, increasing wealth, rising
healthcare demand, and government healthcare policies in Vietnam. Over 31.6 percent of the
Vietnamese population is aged 45 or older. Furthermore, it’s estimated that the fast-growing
middle class will represent roughly 20 percent of the population by 2024.
With the increasing demand for higher standards of healthcare services, Vietnamese consumers
are seeking increased transparency, convenience, and personalization from their healthcare
providers. To address these emerging needs, healthcare technology companies are accelerating
their digital transformations as they work to provide uninterrupted care for patients. To do this,
they are collaborating with hospitals, pharmaceutical businesses, and the Vietnamese
Government.

Leading MedTech startups operating in Vietnam

Despite being at the early stage of development, many MedTech startups are working to
transform the future of healthcare delivery in Vietnam.

Korean-based venture capital firm Nextrans points out several key areas that are currently
popular among MedTech companies, including health information technology, telemedicine,
consumer medical devices, and AI-based healthcare services.

In particular, MedTech companies that have put customers at the center of their development
have had the most success.

This is in line with findings from McKinsey & Company, that adopting a customer-centric
approach helps MedTech companies to generate more significant revenue and much higher
total shareholder returns (TSR) than their peers in today’s medical world.

By focusing on customer-centric innovation, Vietnam’s MedTech startups are also receiving

sizable investments from foreign investors. Take Vietnam-based BuyMed as an example. The
company received $51.5m in Series B funding earlier this year.

BuyMed is a pharmaceutical distribution platform supplying medical products for thousands of

pharmacies and clinics across Vietnam and other Southeast Asian countries. In May 2023, UOB
Venture Management invested US$51.5 million to upgrade BuyMed’s infrastructure and
provide cost-effective distribution methods for medicine, according to Tech in Asia. Currently,
the firm is the biggest player in the MedTech sector in Vietnam, with over 20,000 monthly
active clients, and serves over 63 provinces in Vietnam.

Another standout performer has been Jio Heath.

Jio Health is a technology-driven healthcare provider in Vietnam. The startup received

fundraising of over US$20 million in March led by Singapore-based investor Heritas Capital,
paving the way for the expansion of Smart Clinics and the development of its omni-channel
ecosystem in Vietnam.
Notable MedTech deals in Vietnam
Name Category Funding Stage Amount (US$m) Valuation (US$m)
BuyMed Consumer Marketplace Series B 51.5 247.2
Jio Health Teleconsultation Series B 20.5 98.4
Med247 Medical Concierge Series A 4.7 21.15
Medigo Teleconsultation Series A 2 9.00
Genetica Omics Related Applications Pre-A 2.7 12.86
Drcom Healthcare Marketing Pre-A 2.1 10.00
Source: Healthtech Alpha

Emerging trends and growth opportunities in the MedTech

industry
Armed with robust technological innovation, along with increasing demand in the healthcare
sector, Vietnam’s MedTech industry is poised to rapidly expand.

Shifting demographic headwinds and rising demand for healthcare

services
According to research conducted by the World Bank, Vietnam has one of the fastest-aging
populations in the world. The number of people aged 65 and older is projected to increase
significantly to 19.6 million by 2049 and will make up nearly 18.1 percent of the population.
This will significantly increase the demand for healthcare services in the future.

Furthermore, Vietnam’s growing middle and upper class has also surged in recent years and is
anticipated to account for more than 20 percent of Vietnam’s population by 2024. These
affluent groups are demanding high-quality services from their healthcare providers, including
care delivery, outpatient treatment, and wellness services.

Acknowledging this trend, more and more hospitals in Vietnam are forming strategic
partnerships with companies providing teleconsultation, telemedicine, or virtual surgery to add
value to their healthcare offerings.

Accelerating pace of digital adoption, transformation, and delivery

At the start of 2022, there were 72.1 million internet users in Vietnam, accounting for over 73.2
percent of the population. The country also has relatively high internet penetration compared
to other Southeast Asian nations, which adds to its potential for technology-driven companies
in Vietnam.
Although Vietnam’s adoption of Industry 4.0 technologies is still in the early stages, the country
is making progress in technological innovation and trying to accelerate its digital transformation
agenda. Vietnam ranked 42nd out of 131 countries in the Global Innovation Index, this indicates
that efforts to build digital readiness among tech companies are working. MedTech companies
are also employing cutting-edge technology in their services, like Big Data and AI, which is
paving the way for more affordable healthcare services.

Supporting government policies

The Vietnamese government has several policies that focus on promoting investment in the
healthcare sector and the digital transformation of Vietnam.

Decision No. 749/QD-TTg, for example, states that the healthcare sector in Vietnam is among
one of the top priorities for digital transformation. Resolution No. 52-NQ/TW also proposes
initiatives and provides guidelines for Vietnam’s participation in the Fourth Industrial
Revolution, and Decision No. 127/QD-TTg sets out a national strategy for the research and
development of AI in Vietnam. These policies play a vital role in encouraging MedTech
companies and investors to digitize Vietnam’s healthcare sector.

Vietnam MedTech regulations

Vietnam’s increasing demand for digitally integrated healthcare services has been relatively
steady, but the country’s telemedicine and teleconsultation sectors still lack solid regulatory
frameworks.

“The law is not very clear yet. Ministries keep changing the regulations, especially in the
medical equipment area. Things keep changing all the time,” according to Huynh Phuong Tho,
co-founder of eDoctor.

However, there are a number of regulations in other sectors that might be relevant to MedTech
companies.

For example, the Law on Medical Examination and Treatment requires any institutional
healthcare provider to obtain an operating license that is appropriate for their operation level
and their range of services.

Furthermore, in the field of pharmaceuticals and medical devices, Vietnamese authorities have
also established strict regulations.

Pharmaceuticals
The Law on Pharmacy declares the regulatory framework for the process of registering, selling,
and distributing pharmaceutical products. Circular No. 32/2018/TT-BYT sets out the
registration process for pharmaceutical items and the marketing authorization of medicinal
ingredients in Vietnam.

Medical devices
The Vietnamese government has issued Decree No. 36/2016/NP-CP, which unifies control of
both domestically produced and imported medical equipment. This decree declares that all
medical devices must be registered and issued a permit by the Ministry of Health. In addition,
all medical devices should be categorized into specific classifications depending on the degree
of risk they pose. The requirements become stricter as the classification level increases. This is
outlined in the table from Decree 98/2021/NĐ-CP below.

Levels of Risk Classification Examples

Low Class A Thermometer, Wheelchair
Low to Moderate Class B Blood Pressure Monitor
Moderate to High Class C Ventilator, Hemodialysis Device
High Class D Infant Incubators, MRI
Depending on the classification of a medical device, firms may be required to complete
additional compliance procedures.

These strict regulations and cumbersome administrative procedures pose many challenges for
MedTech companies operating in this field as they can delay access to the Vietnamese market
and the provision of healthcare services.

The future of Vietnam’s MedTech sector

Vietnam’s MedTech industry is still very much in its infancy, but many Vietnam-based MedTech
companies have already found their growth drivers and received significant investments. The
industry has strong growth opportunities as consumers demand more digitally integrated
healthcare services and the Vietnamese government strives to accelerate Vietnam’s digital
transformation.

However, firms should be aware of the regulatory frameworks and legal aspects of the
healthcare system in Vietnam. These can be complicated and firms looking to enter Vietnam’s
MedTech market or to invest in MedTech companies should consult a knowledgeable local
professional.

For support with legal and regulatory requirements in Vietnam, contact the legal experts
at Dezan Shira and Associates.

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