A Look at the Vietnamese Device Market

Although underdeveloped, the healthcare sector in Vietnam isexpanding rapidly. Since October 2009, some health insurance is compulsory for all citizens in Vietnam, and the Vietnamese government plans to achieve universal health coverage by 2015. It also has pledged approximately $2.2 billion to improve and build more specialty hospitals and provincial-level general hospitals in less developed regions by 2013.

The rapidly growing Vietnamese medical device sector largely is driven by imports, which make up about 90 percent of the market. Medical devices from China, Japan and Singapore accounted for almost half of all medical imports in 2010. Domestic production mainly is limited to low-end medical devices and basic items such as syringes and hospital beds. Unfortunately, device shortages are commonplace.

Vietnam’s medical device market is estimated at $400 million, or about $6 per capita in 2010. It is expected that the device market will continue to expand at about 15 percent a year. Experts believe that the Vietnamese market will surpass $1 billion in about seven years, as the country further develops.

Since the government lifted the ban on private practice in 1989, the private healthcare sector in Vietnam has grown significantly. Because current public health facilities are very poor, people often choose private facilities if they can afford it.

Best Prospects

The Vietnamese healthcare system needs a wide variety of medical equipment for such areas as cardiovascular, liver cancer, diabetes and orthopedics.

The best sales prospects for this growing market include:

• Imaging diagnostic equipment (i.e., X-ray machines, CT scanners, color ultrasound machines, magnetic resonance imaging machines);

• Operating theaters;

• Sterilizing equipment;

• Patient monitoring equipment; and

• Emergency equipment.

Regulatory System

The Ministry of Health in Vietnam (MOH) oversees medical device regulations. Within the MOH, the Department ofMedical Equipment and Health Works (DMEHW) regulates medical devices specifically. In addition, the Ministry of Science and Technology performs some regulatory functions relevant for domestically made medical devices. In terms of labeling requirements, text must be in English and Vietnamese or French and Vietnamese.

Previously, only local players wereallowed to distribute medical devices in Vietnam. Foreign companies were required to sell their products to a local wholesaler that would then distribute the goods themselves or through a network of smallerdistributors. Since 2009, wholly foreign-owned companies have been allowed toestablish a market presence in Vietnam.

Import License

An important fact about medical device registration in Vietnam is that the basic process is different for imported devices than for domestically manufactured devices. Technically, most imported devices do not need product registration, just an import license.

A dossier for a new import licenseincludes the following documents:

• The original product catalog;

• The instructions manual and technical specifications (enclosed with their Vietnamese translations) of each kind of device;

•A quality control certificate—ISO, U.S. Food and Drug Administration (FDA), European Commission (EC) —or equivalent;

• Free sales certificate from country of origin; and

• Quality declaration letter.

Foreign registration processing with the correct documentation—FDA or EC approval—is very rapid, with positive or negative responses usually given within three weeks.

Clinical Trials

The DMEHW typically will grant an import license within 15 working days of receiving an application dossier, unless clinical trials are required. This may be the case if a medical device has a new function, a new therapy, or is the first of its type to be imported into Vietnam.

Foreign clinical trials can be accepted for registration, but they also must have been accepted by the foreign country’s medical regulatory agency and be registered in the country of origin. Also, the MOH’s Science and Technology Council must examine and approve the foreign clinical trial results.

If the MOH decides that local clinical trials also must be conducted in Vietnam for the product to be approved, the manufacturer or distributor will not be the sponsor of the trials. Rather, the MOH will organize and conduct the trials itself, typically in three or more hospitals. Depending on the product being tested, trials may take three to 12 months to complete or more, in some cases.

If local clinical trials are required, and no trials have been performed inside or outside of Vietnam, the DMEHW will arrange them. The applying company is responsible for preparing clinical trial protocols. At the end of the trial, the hospitals will pass the results back to the DMEHW and the applicant. The applicant then should resubmit the application with the trial results. The DMEHW will issue its decision within another 15 working days.

Registration for Domestic Devices

Domestically made devices, on the other hand, generally require product registration.

A dossier for new product registration for domestically made devices includes the following documents:

• License of operation with testimony of meeting hygiene, safety and quality standards or cosmetic good manufacture practice certificate;

• Business registration certificate or investment certificate of organization or individual to register the product;

• Certificate of mandate signed by the manufacturer if the organization or individual to register the product is not the manufacturer;

• Composition: A detailed listing all chemical ingredients in generic or International Nonproprietary Names together with their concentration or percentage; and

• Quality standards as well as methods of testing.

For domestically made products, the language of the dossier should be either Vietnamese and/or English. One dossier is used to apply for registration for each product family.

Fees

The medical device registration fee is about $19 per product, while the prices of import permits are: $31 for equipment costing less than $63,000; $62 for the $63,000-$190,000 range; and $187 for goods worth more than $190,000.

Ames Gross is president and founder ofPacific Bridge Medical, a Bethesda, Md.-based consulting firm that helps companies doing business in the Asia market. A recognized national and international leader in the Asian medical markets, Mr. Gross founded Pacific Bridge Medical in 1988, which has helped hundreds of medicalcompanies with business development and regulatory issues in Asia.