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Oct 02, 2020 / 09:27

Covid-19 seen as opportunity for Vietnam to accelerate reforms in health sector

Vietnam's generic drug market will post robust growth rates over the coming years, driven by the government's encouragement of the predominant generic-based local industry.

While the pandemic remains a challenge, Vietnam sees it as an opportunity to accelerate reforms in the health secto and continues to improve public health in order to provide quality health services to the population amid Covid-19, according to Fitch Solutions, a subsidiary of Fitch Group.


Vietnam is also working towards revising the Law on Health Insurance and the Law on Examination and Treatment with more emphasis on efficiency and digital healthcare, such as promoting telemedicine with a personal e-medical record system deployed in all medical facilities, as well as applying remote medical examination and treatment to mobilize leading medical experts to assist in the treatment of Covid-19 patients, in addition to distance training on Covid-19 responsiveness.

Over the coming years, Fitch Solutions expects the government to reassess the public funds allocated to innovative health products.

While public healthcare expenditure increased in 2020 as a result of the Covid-19 pandemic, the accompanying economic slowdown will reverse this dynamic in subsequent years.

Fitch Solutions also believes public health and prevention services will be affected by budget cuts. Moreover, there will be new budget restrictions, more reference pricing, greater emphasis on cost-effectiveness studies and additional mechanisms to increase the uptake of cost-effective therapeutics such as generic drugs. As such, Vietnam's generic drug market will post robust growth rates over the coming years, driven by the government's encouragement of the predominant generic-based local industry, as well as the expansion of healthcare services, Fitch Solution noted.

Domestic medicine production remains firmly within the generic drug sector given the lack of scientific expertise for innovative drug development, and also primarily due to the significantly higher demand for generic drugs in the country as a whole.

In addition, while the development of healthcare services in Vietnam will increase the ability for patients to access higher quality medicines, affordability levels remain low and as such opportunities for patented drug makers will remain restricted.

Since the implementation of a national Social Health Insurance (SHI) program, Vietnam has made strong strides in extending universal healthcare coverage (UHC) in the country. According to a report produced by the Vietnam Social Security agency, by the end of May 2019, there were 84 million people participating in the public health insurance system nationwide, covering 89% of the population. A target set by a resolution of the 6th Plenum of Communist Party of Vietnam, states that by 2025 about 95% of the Vietnamese population will be covered by the national health insurance scheme.

Notably, Fitch Solutions said Covid-19 will have impacts on Vietnam’s UHC. Pre-Covid-19, there were already challenges that Vietnam’s health program was facing such as financial stability of the healthcare scheme. Budget deficits are prominent in the country due to the rising demand for health services. While the government is focused on improving the delivery of public healthcare services, Fitch Solutions also noted that limited public financing, uneven distribution of health services, inadequate infrastructure and a similar shortage of qualified workers will affect the goals of the UHC program going forward.