WEBINAR

Healthcare Sector in
Vietnam

7 March 2023 | 09:00 CET

…Webinar will start shortly…

WEBINAR

Healthcare Sector in
Vietnam

7 March 2023 | 09:00 CET

Healthcare Sector in Vietnam

OUR SPEAKERS TODAY

Mr. Luke Treloar Mr. Dietmar Schwank
Partner, Head of Global Strategy Austrian Commercial Counsellor to Vietnam
Group ADVANTAGE AUSTRIA Ho Chi Minh City
National Head - Healthcare and Life T +84 (0) 28 7109 9781
Sciences hochiminhcity@wko.at
KPMG Vietnam www.wko.at/aussenwirtschaft/vietnam
https://kpmg.com/vn/en www.advantageaustria.org/vn

OUR HEALTH COMPETENCE CENTER

Ms. Le Thi Thanh Van
Head of Hanoi Office
ADVANTAGE AUSTRIA Hanoi
hanoi@wko.at
www.wko.at/aussenwirtschaft/vietnam
www.advantageaustria.org/vn
3
Healthcare Sector in Vietnam

ORGANIZATIONAL REMARKS

◼ The webinar will be recorded:

You will receive the YouTube link within one week after the webinar.

◼ The PowerPoint slides will be made available:

You will receive the Download link within one week after the webinar.

◼ The webinar is interactive:

You will find the chat function for your questions on your control panel on the right
side.
Q&A at the end of the webinar
Detailed questions will be answered individually by e-mail later.
4
 HEALTHCARE SECTOR IN VIETNAM

1 Vietnam market briefing

2 Demand and market access for pharma products

Agenda 3 Demand and market access for medical devices

4 Upcoming events

5 Q&A

5
Vietnam Market Briefing:
Unlocking World-Class
Healthcare in Vietnam
Overcoming challenges to become a
Southeast Asia hub for Life Sciences

March 2023
2

TABLE OF 1 Vietnam macroeconomic environment

CONTENT
2 Overview of Healthcare industry in Vietnam

3 Unlocking world class healthcare in Vietnam

01
Vietnam
macroeconomic
environment
 1. Macro business environment FOR CONVERSATION PURPOSE ONLY

Vietnam’s GDP growth is expected bounce back to grow at 6-6.5% per annum from
2022 onwards
GDP growth (%) of selected countries, 2017-2025f GDP per capita 2021 (USD)

CAGR of GDP per capita (2021-2026)

VN 12.0

10 PH 10.5
8.0 Singapore
IN 9.0
Indonesia
CA 7.5 7,168.8
5 Vietnam
ML 6.0 Thailand
Philippines 4,291.8
TH 4.5 China (Mainland)
0 3,624.9
3.0 Malaysia
1.5
-5
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0
CAGR of GDP per capita (2016-2021)
-10
2017 2018 2019 2020 2021 2022e 2023f 2024f 2025f

Vietnam Philippines Indonesia Cambodia Malaysia Thailand

(VN) (PH) (IN) (CA) (ML) (TH)
GDP Growth
8.02% 6.63% 5.17% 4.75% 5.89% 2.92%
rate 2022

KEY HIGHLIGHTS

• Asian countries all experienced economic recovery at varying rates, in which Vietnam is expected to outperform regional peers: The
stagnation in trading activities, inbound tourism and FDI caused by COVID-19 has led to a sharp decrease in GDP across Asia in 2020, including
Vietnam. However, from 2022 onwards, Vietnam’s GDP is forecasted to recover by 7.8% annually, the highest growing economy as compared to
Philippines, Indonesia, Malaysia and Thailand.
▪ In terms of GDP per capita, Vietnam is lags selected Asian peers. However, its prospective GDP per capita growth rate is predicted to be
much higher than the other countries, at around 8% per annum, which will likely drive growth in overall spending and domestic consumption
Source: Fitch Solutions

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
4

Document Classification: KPMG Confidential

 1. Macro business environment FOR CONVERSATION PURPOSE ONLY

The country’s aging population and rising health-awareness trend imply a significant
demand for healthcare services and products
Vietnam (2021)
Area331,236 Population98.2 Number of Cities/ Currency Vietnamese
Capital Hanoi
km² million Provinces 63 Dong

Total population Regional benchmarking

TOTAL POPULATION BY AGE GROUP Life expectancy Old-age

Median age
98.2 101.1 at birth dependency ratio (%)
million 2021 2025 million
2021 2025 Δ 2021 2025 Δ 2021 2025 Δ
1.9 80+ 1.9
1.1 75-79 1.4
8% 10% Singapore 42.7 44.6 +1.1 83.9 84.4 +0.1 19.5 26.5 +8.0
1.8 70-74 2.7
3.2 65-69 4.0 Thailand 40.5 42.0 +0.9 77.5 78.2 +0.2 20.8 25.8 +5.5
4.5 60-64 5.0
Vietnam 32.9 34.6 +1.2 75.6 76.1 +0.2 12.7 15.3 +4.8
5.3 55-59 5.6
6.0 50-54 6.4 32.8 34.7 +1.4 76.1 76.7 +0.2 8.1 10.4 +6.4
Brunei
6.6 45-49 6.9
69% 7.1 40-44 7.7 68% Malaysia 30.7 32.2 +1.2 76.5 77.0 +0.2 10.3 11.9 +3.7
7.9 35-39 8.3 72.1 72.8 +0.2 10.0 11.0 +2.4
Indonesia 30.0 31.0 +0.8
8.5 30-34 8.4
8.3 25-29 6.7 Myanmar 29.3 30.4 +1.0 67.6 68.3 +0.3 9.7 10.9 +3.0
6.6 20-24 6.4
Philippines 26.0 27.3 +1.2 71.5 72.0 +0.2 8.3 9.2 +2.6
6.6 15-19 7.0
7.2 10-14 7.5 25.9 27.2 +1.1 70.3 71.1 +0.3 8.5 10.4 +5.2
Cambodia
23% 7.7 05-09 7.8 22%
7.9 Laos 24.7 26.0 +1.3 68.5 69.6 +0.4 6.7 7.4 +2.5
00-04 7.4

KEY HIGHLIGHTS

• Golden structure of age population: Vietnam is one of the most populous countries in the world (98.2 million as at the end of 2021). The country is
currently experiencing its <golden structure= of age population, of which nearly 70% of the population are in the working age (15 – 65 years old).
• Aging population is accelerating by 2025: However, Vietnam is also facing a challenge of aging population, in which the percentage of elder population
will increase by 2% by 2025. The country’s population median age is also increasing at a very fast rate of 1.2% as compared to its regional peers.
Note: Δ refers to CAGR2021-2025
Source: Fitch Solution, Euromonitor, KPMG Analysis
© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
5

Document Classification: KPMG Confidential

1. Macro business environment FOR CONVERSATION PURPOSE ONLY

Improved life quality in Vietnam drives the growth of health-related services and
products, especial y in the upper-middle to high end segment
Disposable income per capita (USD) Household disposable income classification (per year)

CAGR (’20 – ’25) -15.3% -5.2% 11.6% 20.3% 22.9%

CAGR of Disposable income per capita (2021 - 2026)

8.5 27.0 30.6 33.5 Key markets

Vietnam 0.4% 0.7% 1.8% 2020 2025
3.4% 6.5%
8.0 2,002 15.0% 2.2 2.6 2.6 3.0
13.8%
0.0% 0.4%
6.0% 6.0% 9.5% 9.7%
22.5% 18.0%
7.5 26.1%

Cambodia 74.0%
7.0 35.4% 55.0% 80.5%
Thailand 2,544
54.9%
Philippines
6.5
2,753
China (Mainland) 73.6% 20.0% 21.0%
5,776 0.0% 0.0%
9.6% 9.3%
6.0 Indonesia
5,396 65.7% Hanoi HCMC Hanoi HCMC
3,825
5.5 45.9% Very low income Upper middle income
(<USD1,000) (USD10,000 - 25,000)
37,142 Singapore
Low income High income
0.0 (USD1,000 - 5,000) (USD25,000 - 50,000)
8.7% 4.6% Middle income
-0.5 1.8% (USD5,000 - 10,000)
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 2015 2020 2025

CAGR of Disposable income per capita (2017 - 2021)

• Vietnam is gradually moving from a low to a middle income • The transition from low income into high income: The high
country with an increase of disposable income per capita by 5.9%: income class experiences highest growth in the past 5 years,
The expansion of the middle-income class and the growth in disposable followed by the upper middle and middle income class.
income per capita from 2015 to 2020 has accelerated Vietnam’s overall • In 2020, there is c.a 6% and 24% of household having upper middle
life quality and higher purchasing power, increasing the country’s and high income in Ha Noi and Ho Chi Minh, respectively
accessibility to vaccines. In the next 5 years, it is expected to continue
increasing at a higher pace of 8.9%
© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
6
Source: Fitch Solutions, Nielsen Pocket Book, KPMG Research and Analysis
Document Classification: KPMG Confidential
02
Overview of
Healthcare industry
in Vietnam
2. Overview of Healthcare industry in Vietnam FOR CONVERSATION PURPOSE ONLY

Vietnam’s healthcare sector has significant challenges to reaching its potential

Healthcare access to service is
Non-Communicable Diseases uneven
(NCD) are increasing significantly
Patients in rural areas face challenges
The rise in NCD creates a greater in having access to quality healthcare
need for long-term and coordinated services compared to those in urban
healthcare services that cater to areas
chronic diseases

Healthcare expenditure is higher

Hospitals are congested and
than more comparable countries
overcrowded
There is an increase in healthcare
Infrastructure investment is expensive
fees at large public hospitals due to
but in heavy demand
the fiscal autonomy mechanism

Physicians and nurses are

understaffed
Vietnam’s ratio of doctors per capita
have reached national objective
levels but still faces shortages

KEY IMPACTS TO HEALTHCARE SECTOR

• Growing demand for medical devises, pharmaceuticals, consumer retail medicine, alternative private
funding models, and digital health

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
8

Document Classification: KPMG Confidential

2. Overview of Healthcare industry in Vietnam FOR CONVERSATION PURPOSE ONLY

Healthcare needs are changing rapidly in Vietnam

TOP CAUSES OF DEATH IN 2019 & PERCENTAGE CHANGE FROM 2009 - 2019

% change
from 2009- 31% 18% 52% 45% 25% 32% 28% 63% 30%
2019
107,659
2009
86,130
2019
38,005
22,489 26,191 24,002
17,118 19,758 18,227
13,825 11,387
9,391 11,044 14,367
2,045 2,614 1,257 2,054
Lung cancer Tuberculosis LRI* Ischemic Stroke COPD Cirrhosis Alzheimer9s Diabetes
heart disease disease

• Vietnam is moving toward the middle-income status country with higher urbanization rate and an aging trend in population.

Vietnam is rapidly transitioning from a communicable diseases market to a non-communicable diseases market. This will
change the opportunity landscape for course of treatment

Note: *Lower respiratory infections

Source: Global Health Data Exchange
© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
9

Document Classification: KPMG Confidential

 2. Overview of Healthcare industry in Vietnam FOR CONVERSATION PURPOSE ONLY

Private healthcare will continue to expand further, presenting growth opportunities in the
private sector
Number of hospitals Supply of hospital beds (8000)

2016-2021 2019-2021 2016-2021 2019-2021

CAGR CAGR CAGR CAGR
Public hospitals 0.8% 0.6% Public hospitals 10.6% 1.4%
Private hospitals 5.8% 15.8% Private hospitals 52.9% 15.5%

290.0
282.3
1,189 1,219 1,235

237.2

28.3
306 21.1
231 228 12.1

2016 2019 2021 2016 2019 2021

KEY HIGHLIGHTS

▪ Currently, private spending accounts for almost two-thirds of the total and is growing at 3 times faster than public spending. While the number of public
hospitals has stagnated from 2016 to 2021, the private sector expands more rapidly from 231 private hospitals and more than 30,000 private clinics in 2016 to
306 private hospitals and 37,350 private clinics in 2021.
▪ Increasing demand for healthcare services in Vietnam coupled with Government’s encouragement to develop private healthcare system through Public-
Private Partnership (PPP) are expected to pave the way for more new private players going forward, which indicates a stronger demand for private healthcare
sector.

Source: Fitch Solutions, KPMG Research and Analysis

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
10

Document Classification: KPMG Confidential

2. Overview of Healthcare industry in Vietnam FOR CONVERSATION PURPOSE ONLY

Demand for hospital beds will exceed supply, especial y in central hospitals. The
government plans to increase number of beds and relocate patients to alleviate the
issue
Supply and demand for inpatient (8000 beds) supply of hospital beds in public hospitals
382.2
72,732 74,373
350.1 340.1 42.1 69,699 71,401
67,126 CAGR (2014-18)
306.9 311.7 38.4
11% 21,402 21,740 TOTAL 5
273.5 33.5 20,856 21,068 2.6%
11% 19,924 CITIES
10.9% 6,797 6,804 HANOI 2.2%
6,795 6,789
6,806 6,260
5,962 6,137 HAI
4,862 5,752 -0.01%
PHONG

DA NANG 6.5%
32,705 33,003 33,604
31,255 31,834
HCMC 1.8%

CAN THO 8.6%

4,279 4,462 4,877 5,394 5,965

2018E 2021F 2023F 2014 2015 2016 2017 2018e

119% 104% 114% 124% 136%

Supply of inpatient beds Demand of inpatient beds

Gap between supply and demand of inpatient beds Bed over subscription at Tier 1 hospitals occupancy rate (%)

Note: The figure is for both public and private establishments; Calculation methodology is included in Appendix 2
Source: Fitch Solutions, Trade press, KPMG analysis

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
11

Document Classification: KPMG Confidential

2. Overview of Healthcare industry in Vietnam FOR CONVERSATION PURPOSE ONLY

The insufficiency of health professionals remains a challenge in Vietnam

Physicians per 1,000 residents Nurses per 1,000 residents

4.7% 6.0% 3.8% 1.2% 0.8% 0.4% 2.9% 2.3% 4.6% 2.4% 4.4% 5.3%

8.3

5.8

4.3
Average
3.9
2.6
2.4
2.0
1.2 1.3 1.3
Average:
0.8
0.4 0.5 1.2

Indonesia Thailand Vietnam Philippines Malaysia Singapore Singapore Malaysia Thailand Philippines Vietnam Indonesia

Source: Fitch Solutions, World Health Organization

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
12

Document Classification: KPMG Confidential

 2. Overview of Healthcare industry in Vietnam FOR CONVERSATION PURPOSE ONLY

The positive growth of healthcare expenditure is expected to pave the way for further
demand for digital health in the country.
Regional benchmarking

5.9% 6.0%
4,000 6
5.3%
3,500 4.8%
5
4.3% 4.2%
3,000
4
2,500
2,000 3
3,390.7
1,500
2
1,000
783 494.7 1
500 308.0
261 167.7 176.7 158.7
0 0
Indonesia Malaysia Philippines Singapore Thailand Vietnam

Total healthcare expenditure (% of GDP)

Total healthcare expenditure per capita (USD)
Average of total healthcare expenditure per capita (with Singapore)
Average of total healthcare expenditure per capita (without Singapore)

Source: Fitch Solutions, World Health Organization

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
13

Document Classification: KPMG Confidential

 2. Overview of Healthcare industry in Vietnam FOR CONVERSATION PURPOSE ONLY

Public HI scheme has witnessed significant changes and admirable achievements

DEVELOPMENT ROAD MAP OF PUBLIC HI

95%
POPULATION
COVERAGE
88% (2025f)
POPULATION MINISTRY
COVERAGE Person working in the agriculture, OF HEALTH 3%
(2018) forestry, aquaculture and salt industry; 35.0%
household members SOCIAL PUBLIC
30%
Children under age six, the near poor, SECURITY HEALTHCARE PRIVATE HEALTH
EXPENDITURE INSURANCE
2% students (49%) POPULATION
POPULATION OTHERS* 16% COVERAGE (2018)
COVERAGE Employees in non-state enterprises more than 1 TOTAL
(1992)
employee, other organization, war veterans, the poor HEALTHCARE
EXPENDITURE
OUT-OF-
National Assembly Representative, People’s Council member, preschool POCKET
45% (100%)
2.0%
teachers, social welfare groups, dependents of polices and armed forces
staff PRIVATE
PRIVATE 2% PRIVATE INSURANCE
INSURANCE HEALTHCARE
Civil servant, employees in state and medium-to-large private enterprises, pensioners, CONTRIBUTION TO
EXPENDITURE
TOTAL HEALTHCARE
the elderly (51%)
EXPENDITURE (2018)
OTHERS 4%
1992 1998 2005 2008 2018

MARKET OPPORTUNITIES

• Vietnam has achieved an impressive Universal Healthcare Coverage Achievement with approximately 90% of the population has covered by health
insurance by 2020, thanks to a premium subsidy of 100 per cent from the government. Within that, 1/3 Vietnamese have some form of private health
insurance which only make up a small fraction of the total healthcare expenditures.
• However, after the increases in healthcare fees at large public hospitals due to the fiscal autonomy mechanism more people are joining voluntary
health insurance. This is likely to boost private spending.
• Corporate obligation on annual check up: Since 2015, under Article 152 of labor Law 2012 and Article 21 of the Law on Occupational Safety and
Hygiene by the MoH, businesses across all sectors are obliged to provide employees with annual health check. This may push the private spending of
healthcare to increase
Source: KPMG analysis, Insurance Association of Vietnam
© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
14

Document Classification: KPMG Confidential

03
Unlocking world
class healthcare
in Vietnam
 3. Unlocking world class healthcare in Vietnam FOR CONVERSATION PURPOSE ONLY

KPMG’s house view on the way forward

#1 # 2 # 3
PUBLIC FUNDING EXPANSION OF PRIVATE IMPROVEMENT OF
EXPANSION SECTOR PARTICIPATION ADMINISTRATIVE EFFICIENCY

Improve administrative efficiency, and

Expand existing public funding for
Expand private sector participation thus lower the cost of care at an
healthcare to close care gaps
individual patient level

• A public funding model will develop • Private sector can help enhance • Empower local government
infrastructure to encourage market access, access capability decision making power in terms of
ecosystem development and private and experience or support. funding and implementation to
KPMG9s view

investment. enhance administrative efficiency

• Incentivization of public-private and potentially lower the cost.
• Diversify public funding sources by
leveraging alternative options such partnerships is essential to relieve
as tax contribution and certain burden for public sector.
encouragement of cooperation
between public and private insurers.

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
16

Document Classification: KPMG Confidential

 3. Unlocking world class healthcare in Vietnam FOR CONVERSATION PURPOSE ONLY

Identifying a <breakthrough= strategy to reach Vietnam’s potential as an ASEAN’s LS hub

<Breakthrough= strategy for LS sector in Vietnam
through exploration of <transformational= opportunities
Typical / Traditional Life Sciences development stages
Vietnam has the opportunity to create a <breakthrough= strategy that
initiates the stages in parallel, rather than the traditional sequential
development model. This parallel model takes advantage of the
Vietnam’s potential
breakthrough from the complimentary nature of the steps and their requirements. By beginning
traditional LS development with clinical trials and digital health, Vietnam will start the journey within
stages through
<Transformational sector its current capabilities, while building up for more complex opportunities
growth opportunities=
Singapore
2020 2035
Government-led
Timeline
development for
IP creation
R&D Hub
Malaysia Including clinical trial development activities leading to future research
capabilities

Branded manufacturing
Generics manufacturing

Digital Infrastructure
Indonesia

Malaysia
1990s Thailand
Indonesia
Thailand 1990s
(1990s) Vietnam

Singapore (1970s)
Stages
Local Manufacturing Technology Clinical Innovative Product
(Process Innovation) Transfer Trials Creation

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
17

Document Classification: KPMG Confidential

2. Overview of Healthcare industry in Vietnam FOR CONVERSATION PURPOSE ONLY

With a large population and strong patient-doctor relationship, Vietnam can potential y
be an attractive destination for clinical trials, with more than 210 clinal trials conducted
from 2014 to 2021 in Vietnam
Total clinical trials from 2014-2021 Number of new clinical trials in Vietnam

38
Singapore 748 4 35
33
4
4
28 28 28
11 6
Thailand 747 2 5
5 6
7
4
Philippines 293 16 8
17 1
4
22
13
12
22
16 2
Vietnam 218 1
6 13
7
7 6
3 5 3
Indonesia 162 1 1 2

2014 2015 2016 2017 2018 2019 2020 2021

Cambodia 24
Phase I and I/II Phase II and II/III Phase III Phase IV

KEY HIGHLIGHTS
• Due to a variety of challenges from hospital to pharmaceutical company aspects, Vietnam continues to fall short when compared to other regional
counterparts in terms of the number of clinical trial that have been undertaken over the past years.
• However, Vietnam with large of population of more than 98.2 million people (in 2021) offers a sizeable pool participant, healthcare experts, and strong
patient-doctor relationships, those factors are expected to accelerate the development of clinical research in near future.

Source: Fitch Solutions, KPMG analysis

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
18

Document Classification: KPMG Confidential

3. Unlocking world class healthcare in Vietnam FOR CONVERSATION PURPOSE ONLY

Values of Innovative Pharma Industry: Building the quality brand for Vietnam
Health benefits Local pharma sector development
▪ Patient access to innovative medicines ▪ Technology transfer
▪ Patient Support Programs ▪ Toll manufacturing
▪ Compassionate Use assistance ▪ Capability building for local manufacturer, workforce
▪ Latest innovative medicines for rare disease / address unmet needs ▪ Investment in local manufacturing
▪ Develop export capacity

Public Private Collaborations, CSR Fostering Start-up,

▪ Hospital facility Entrepreneurship eco-system
▪ Service-based PPCs ▪ Foster an entrepreneurial
▪ Trainings for HCPs culture and technology transfer
▪ Disease awareness Innovative regime that drive new
▪ CSR Pharma establishment of start-up
Industry companies
HCP capability building
▪ Provide CME to HCPs
▪ Projects / Programs
Domestic R&D / clinical trials
expertise development
▪ FDI attracted for clinical trials

Workforce / Human resources & training

▪ Creation of new employment (i.e. reduction FDI, Tax
G
of unemployment rate) and ▪ Bring more FDI projects
▪ Higher education / Vocational training into Vietnam
▪ Tax contributions

1 PATIENT BENEFITS 2 GOVERNMENT BENEFITS 3 INDUSTRY BENEFITS

• Improved treatment outcomes • Social and economic growth through more • Enhancement of local manufacturing
• Reduced overall cost through high-tech investment, vocational training, • Develop export capabilities
and healthier workforce
faster access to high quality, • Increase R&D activities and become
innovative medicines • Highlight steps to improve competitiveness, a hub for pharmaceutical sector
and legal and business environment

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
19

Document Classification: KPMG Confidential

3. Unlocking world class healthcare in Vietnam FOR CONVERSATION PURPOSE ONLY

Potential future value of Vietnam’s innovative pharmaceutical sector

WHAT CAN BE ACHIEVED?

Additional market value of innovative pharmaceutical industry - Future Quantitative benefits:

potential (USD bn)

168.1
USD26.8 billion - 99.3 billion value-added by 2045.

An addition of USD 26.8billion to USD 99.3 billion output for the

innovative pharmaceutical industry by 2045
142.7
15% to 20% industry growth above current
baseline.

121.2
USD100 million investment throughout the industry.
113.3
102.9

87.6 78,800 to 488,500 jobs created in innovative

74.5
pharma in 2045
63.5
54.1 10.2% to 15.0% productivity boost over 2020 to
46.3 2045, as compared with 7.7% baseline growth rate.
39.6
33.8
24.8 29.0 40.8
21.3
15.8 18.3
11.7 13.6
Qualitative benefits:
10.1
7.6 8.7
4.9 5.7 6.6 14.0
0.7 1.2 1.4 1.4 1.4 + HCP capacity building + Lowered out-of-pocket PPC
+ Entrepreneurship ecosystem expenses
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045

+ Faster access to innovative + Becoming a regional innovation

Current trend Potential future growth (lower @20%) medicines hub through clinical trials
Potential future growth (lower @15%)

© 2023 KPMG Tax and Advisory Limited Branch, a Vietnamese limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (<KPMG International=), a Swiss entity. All rights reserved.
20

Document Classification: KPMG Confidential

Contact us
Luke Treloar
Partner, Head of Strategy
National Head of Healthcare & Life science
Deal Advisory Services

T +84 (28) 3821 9266 ext. 8261

M + 84 908 441 528
E luketreloar@kpmg.com.vn

Hanoi Ho Chi Minh City Da Nang

46th Floor, Keangnam Landmark 72, 10th Floor, Sun Wah Tower, D3, 5th Floor, Indochina Riverside Towers,
E6 Pham Hung, Me Tri, Nam Tu Liem, 115 Nguyen Hue, Ben Nghe, District 1, 74 Bach Dang, Hai Chau I, Hai Chau,
Hanoi, Vietnam Ho chi Minh City, Vietnam Da Nang, Vietnam
T: +84 (24) 3946 1600 T: +84 (28) 3821 9266 T: +84 (236) 351 9051

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide
accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one
should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2023 KPMG Limited, KPMG Tax and Advisory Limited, KPMG Law Limited, KPMG Services Company Limited, all Vietnamese one member limited liability companies and
member firms of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Scan to visit our website: kpmg.com.vn
All rights reserved. Email: kpmghcmc@kpmg.com.vn
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.

Document Classification: KPMG Confidential

 Demand and market access
2 for pharma products

7
Healthcare Sector in Vietnam

PHARMACEUTICAL SECTOR - OVERVIEW

Vietnam's import & export value of pharma products Macro view
2017-2022
◼ Vietnam has ~180 drug producers, the pharma sector
2017 2018 2019 2020 2021 2022
500 accounts for ~2.2 % of GDP
0 ◼ Domestic firms: produce simple dosage medications,
-500 functional foods and generic drugs. Lack of R&D and
investment capability.
-1000
◼ High dependence on import of finished products, 90
Value (USD million)

-1500
% of OTC and pharma products are imported.
-2000
◼ High dependence on China and India for raw material
-2500 import. Volume ~400m USD.
-3000

-3500
Bilateral view
-4000
◼ Imports from Austria amount to 40-50 MEUR p.a.
-4500
◼ 80:20 ratio for pharma/medical devices.
Import Export ◼ Key products: antisera/vaccines, stroke medicines.

Source: UN Comtrade
8
 Healthcare Sector in Vietnam

PHARMACEUTICAL IMPORTS AND EXPORTS IN MIO. USD

by products
by products
2021
2021
2020
2020
2019
2019
2018
2018
2017
2017
0 500 1000 1500 2000 2500 3000 3500 4000
0 50 100 150 200
Human/animal blood; vaccines, toxins, etc. Medicaments not in measured doses or put up for retail sale Medicaments in measured dose or packed for retail Wadding, gauze, bandages, etc.

IMPORT EXPORT
by markets, 2021 by markets, 2021
EU ASEAN
USA EU
China Japan

India Korea, Republic of

ASEAN USA

Korea, Republic of Bulgaria

United Kingdom China

Japan Hong Kong, China

Other Other
9
Healthcare Sector in Vietnam

MARKET ACCESS FOR PHARMA PRODUCTS

◼ EU exported EUR 2.47 billion pharmaceutical products to Vietnam between January and October 2022, 24% of all
EU exports to Vietnam in that period.

◼ EVFTA: Duty-free import of EU pharma products at the latest by 2027 (more than 50 % of products are already
duty-free)

◼ 20 October 2022: Vietnam recognised the EU Single Market for pharmaceuticals and the unity of the EU regulatory
framework, by ending the discrimination among EU members states9 regulatory authorities of pharmaceuticals
(Circular 08/2022/TT-BYT).

◼ 8 February 2023: Vietnam extended the validity of 8,800 existing marketing authorisations of pharmaceutical
products until the end of 2024 (National Assembly Resolution 80/ 2023/ QH15).

10
Healthcare Sector in Vietnam

DRUG REGULATORY PROCESS IN VIETNAM

◼ Time frame to process a dosser

is usually 18-24+ months

◼ But if necessary, the applicant

with have to furnish
supplementary documents
within a short period of time (7
working days)

◼ Documents need to be
translated into Vietnamese

◼ Organized template for dossier

to be used

11
 Demand and market access for
3 medical devices

12
Healthcare Sector in Vietnam

MEDICAL EQUIPMENT SECTOR - OVERVIEW

Vietnam's import & export value of medical
equipment 2017-2022 Macro view
2017 2018 2019 2020 2021
1500 ◼ Domestic firms: produce basic medical supplies,
such as scissors, rubber health products, scalpels,
1000 hospital beds and disposables
◼ Higher exports growth rate in the last few years
500 made Vietnam8s trade balance of medical devices
Value (USD million)

positive.
0 ◼ High reliance on imports in radiation instruments,
ultrasonic scanning, MR…
-500

Bilateral view
-1000
◼ Imports from Austria volatile, ~ 20 MEUR p.a.
-1500
◼ Key products: equipment for hospital projects,
Import Export
hearing aids, dental instruments

Source: UN Comtrade
13
 Healthcare Sector in Vietnam

MEDICAL EQUIPMENT IMPORTS AND EXPORTS IN MIO. USD

by products by products
2021 2021

2020 2020

2019 2019

2018 2018

2017 2017

0 200 400 600 800 1000 1200 0 200 400 600 800 1000 1200
Electromedical instruments and appliances Therapy appliances, ventilation and breathin appliances Orthopaedic appliances; hearing aids; implants X-rays and radiation instruments Medical furniture

IMPORT EXPORT
by markets, 2021 by markets, 2021
China USA
USA Japan
Germany China

Japan Netherlands

Korea, Republic of Belgium

France Korea, Republic of

Italy Germany

Ireland Hong Kong, China

Other Other
14
Healthcare Sector in Vietnam

IMPORTANT MEDICAL DEVICE REGULATIONS

◼ Decree 07/2023/ND-CP dated 03.03.2023 – amend/supplement a number of articles from Decree No. 98/2021/ND-CP – effective
03.03.2023: validity extension of Import Licenses for medical devices (issued from 01.01.2018 until 31.12.2021) and of circulation
numbers for In Vitro Diagnostics (IVDs) (issued from 01.01.2014 until 31.12.2019) until 31.12.2024.

◼ Decree No. 98/2021/ND-CP – effective Jan 1, 2022

◼ Decree No. 111/2021 – Amends Decree No. 43/2017 and Updates Labeling requirements

Previous regulations

◼ Circular No. 30/2015/TT-BYT – effective since 2015 and was phased out by Dec 31. 2022

◼ Decree No. 36/2016/ND-CP–effective Jan 1, 2020 and now overruled by Decree 98/2021

◼ Decree No. 169/2018/ND-CP – amended Decree 36 adds fast track approval; and CSDT requirement (now overruled by Decree 98/2021)

◼ Decree No. 03/2020/ND-CP – amended Decree 36 details implementation process of new Rules (now overruled by Decree 98/2021)

15
Healthcare Sector in Vietnam

MARKET ACCESS FOR MEDICAL DEVICES AND IVDs

◼ Decree No. 98/2021/ND-CP – effective 1 Jan 2022. Regulated medical devices and IVDs can only be marketed in
Vietnam if they have a Marketing Authorization Code (MAC). The MAC does not expire.

Product classification Product registration Other topics regulated

ISO 13485
◼ Price management
Class A (low risk) Declaration of ◼ Declare the prices before circulation,
Applied update prices on MOH portal
◼ List wholesale and retail price in VND
Standards at various places, incl. POS or place of
Class B (low- application to transaction
◼ Publish the winning bids for medical
medium risk) local DOH devices of public medical facilities
◼ Not buy or sell medical devices without
a declared price or at a higher price
„Fast-track“ registration
Class C (medium- Marketing ◼ Information and advertisement
◼ CFS or MA from any of the following:
high risk) Authorization ◼
◼
EU, UK, Switzerland
FDA – USA
◼ Clinical trials
Registration ◼ TGA – Australia
application to ◼
◼
MHLW or PMDA – Japan
NMPA – China
◼ Post-market and risk management
Class D (high risk) MOH ◼ MFDS – Korea
◼ Other

ISO 13485 ◼ Import license or registration number or

16
ASEAN CSDT format CFS under commercial form in Vietnam
Healthcare Sector in Vietnam

MARKET ACCESS FOR MEDICAL DEVICES AND IVDs

◼ Decree No. 98/2021/ND-CP – effective 1 Jan 2022. Regulated medical devices and IVDs can only be marketed in
Vietnam if they have a Marketing Authorization Code (MAC). The MAC does not expire.

Product classification Product registration Other topics regulated

ISO 13485
◼ Price management
Class A (low risk) Declaration of ◼ Declare the prices before circulation,
Applied update prices on MOH portal
◼ List wholesale and retail price in VND
Standards at various places, incl. POS or place of
Class B (low- application to transaction
◼ Publish the winning bids for medical
medium risk) local DOH devices of public medical facilities
◼ Not buy or sell medical devices without
a declared price or at a higher price
„Fast-track“ registration
Class C (medium- ◼ Information and advertisement
high risk) InMarketing
reality, MOH has◼ soCFS far
or MAissued
from anyaofvery limited
the following:
Authorization ◼ EU, UK, Switzerland
◼ Clinical trials
number of new MA ◼◼Licenses
Registration
FDA – USAfor Class C and D
TGA – Australia
application ◼
devices. toThis delay◼has MHLWcaused
NMPA
or PMDA – Japan
– China frustration to
◼ Post-market and risk management
Class D (high risk) – Korea
MOH
manufacturers and ◼◼localMFDSmedical
Other facilities in
ISO 13485 need for
◼ new Importequipment.
license or registration number or
16
ASEAN CSDT format CFS under commercial form in Vietnam
 Upcoming events
4

17
Program of ADVANTAGE AUSTRIA Ho Chi Minh City

OUR EVENT OFFER FOR YOU

◼ 7 March 2023: Webinar <Healthcare Sector in Vietnam=

◼ 11-12 September 2023: Austrian Health Technology Days Vietnam

Register your interest now!

◼ 13-15 September 2023: Austrian Group Pavilion at MEDICAL FAIR Thailand

organized by ADVANTAGE AUSTRIA Bangkok

◼ 2024: Trade Missions (tbc) and Individual Business Coachings

◼ February 2025 TBC: Incoming Mission from Vietnam to Health Day 2025 in Vienna

www.wko.at/aussenwirtschaft/vietnam 18
5 Your questions please!

19
WEBINAR

Healthcare Sector in
Vietnam

Thank you for your participation!

AußenwirtschaftsCenter Ho Chi Minh City

Wirtschaftsdelegierter: Dietmar Schwank
T +84 28 7109 9781
E hochiminhcity@wko.at
W www.wko.at/aussenwirtschaft/vietnam