Investment In The Healthcare And Medical Device Sectors – Food, Drugs, Healthcare, Life Sciences

A. Overview of the health sector in Vietnam

There is no denying that Vietnam is really an attractive investment destination in Southeast Asia. It has great potential to develop a quality, self-sustaining life science sector. Improvements in health care will lead to several benefits. With an increasing focus on healthcare, production, service providers, clinical research institutions and others are stimulated. As a result, small and medium-sized enterprises (SMEs) are boosted and exports could replace the need for foreign aid by attracting sustainable FDI and PPP.

The close cooperation between the most important actors from the private and public sectors is of particular importance for positive development. In doing so, certain key objectives should be set. Significantly, it is important to ensure fast and sustainable access to medical treatment and to urgently improve the quality of the treatment process. High quality home treatments not only increase patient satisfaction, but also improve their own economy by counteracting outgoing medical tourism.

In addition, it should be ensured that the existing investors remain in Vietnam and that new ones are drawn ashore. To do this, investors must be shown that the Vietnamese market does not harbor any undiscovered risks, but is stable and predictable. Also, incorporate collaborative and partnering opportunities to develop local skills.

B. Outpatient: Home care and home treatment

A major problem in the Vietnamese health sector is limited capacity in hospitals. There is a gap between bed capacity and the need for inpatient treatment. The Ministry of Health has its hands full to counter the congestion in hospitals. Even facilities with a larger bed capacity have now set up a home care service to improve aftercare for chronic and long-term illnesses for discharged patients.

Patients in Vietnam are financially overwhelmed with treatment costs, so affordable treatment is required. However, this must be achieved without any loss of quality. In particular, the indirect costs of health care, such as travel expenses, meals during the hospital stay and loss of income during treatment, put patients and their families under enormous financial pressure. Due to the congestion situation in hospitals and the not yet fully developed home care, patients tend to take care of themselves with the help of their families. Due to the lack of professional follow-up care, this leads to possible additional health complications. In addition, patients often need to come to the hospital at some point and in some cases with more severe illnesses.

Therefore, professional homecare programs should be further researched and developed, with easy access to the programs for all. This is particularly necessary for the chronically ill. Home care and home treatment can help reduce public spending on chronic diseases and thus save health budgets.

C. Implementation

There are two main prerequisites for implementing the homecare structure. First, the creation of a simple, transparent legal framework that contains incentives for investors. This encourages multinational companies to invest and transfer their know-how and technology to Vietnam, thereby increasing the revenue and quality of the country’s health sector. Second, to streamline the administrative process to shorten the process of delivering new, high quality patient care solutions and to respond to the growing need of a growing Vietnamese population for rapid and sustainable access.

D. Code of Conduct for the Medical Device Industry

The background to the code of conduct for medical devices are the various risks associated with the industry, in particular the unfair competition between the industry players. The Code is intended to facilitate ethical dealings between members of society who develop, manufacture, sell, distribute or distribute medical technology in Vietnam and individuals and organizations who use, recommend, buy or prescribe medical technology in Vietnam. The content of the Code of Conduct should focus on 1) strict compliance with laws and regulations in this area; 2) prioritizing people and patient health and safety; and 3) promoting scientific and educational activities for the best benefit to the patient.

In multinational companies, the compliance area is usually very pronounced and strict. Therefore, it is particularly important to invest in an ethical business environment, especially when investing in high-risk jurisdictions. The commitment to high ethical standards would certainly bring long-term benefits to the health sector in Vietnam and attract more investors.

E. Outlook on important trade agreements TPP 11, EUVNFTA and investment protection agreements

In January 2017, US President Donald Trump decided to withdraw from US participation in the TPP. In November 2017, the remaining TPP members met at the APEC meetings and agreed to advance the now CPTPP (TPP 11) without the USA. On November 12, 2018, Vietnam officially became the seventh member of the CPTPP.

The CPTPP aims to eliminate 100% of tariff lines and duties between Member States on certain goods and goods. An increase in trade will have a major impact on the health and medical sectors. The agreement is suitable to support public-private partnerships (PPPs), which have a positive effect on the development of innovative technologies for medical products and could facilitate the transfer of the necessary know-how. Lower or no trade tariffs can lead to lower import costs for the essential components of medical devices. This in turn leads to lower acquisition costs for medical practices and hospitals and thus ultimately to a reduction in treatment costs.

The annexes of the CPTPP (chapter TBT) deal with specific challenges of the trade in pharmaceuticals, medical devices and technology products. The regulations require members to define what medical devices are and when they are subject to state law, and this information must be made public. This requirement helps ensure timely mitigation measures if a product application is not approved or is deemed defective. This increased transparency brings great advantages to all distributors of medical products, employees in the medical industry and patients.

A specific example is that before the CPTPP came into effect in Vietnam, Canada faced Vietnamese tariffs of 7% on the export of life science products such as canned pharmaceuticals for retail use. From January 14, 2019, these tariffs will no longer apply. As a result, Canada and other countries are exporting more and more products to Vietnam and gradually improving the quality of medical facilities in Vietnam.

Another important trade agreement is the Vietnam Free Trade Agreement (EVFTA) of the European Union, which came into force on August 1, 2020. The EVFTA offers a great opportunity to open up new markets for both the EU and Vietnam and bring more capital to Vietnam due to Vietnam easing access and reducing almost all tariffs by 99% as well as a commitment to provide better conditions for workers . In addition, the EVFTA promotes the development of (almost) all economic sectors in Vietnam. Both agreements promise great benefits for the health and medical industries.

Both the CPTPP and EVFTA contain a chapter on government procurement that addresses the requirement to treat foreign and domestic bidders equally when a government purchases goods or requests a service with a value above the established threshold. Vietnam undertakes to publish tender information in good time, to give bidders sufficient time to prepare and submit bids and to maintain the confidentiality of bids. The GPA in both agreements also requires the contracting parties to evaluate bids on the basis of fair and objective principles, to evaluate and award bids only on the basis of criteria set out in notices and tender documents, to have an effective complaint and dispute resolution system, etc. create. Vietnam has implemented an online bidding mechanism with easily accessible information for foreign investors.

The EVFTA comes with the EU-Vietnam Investment Protection Agreement (EVIPA), which is being examined for ratification by the EU member states. Foreign investors enjoy a high level of protection under the EVIPA. This agreement is a combination of the 1958 New York Convention and the 1965 ICSID. EVIPA and CPTPP allow foreign investors to sue the Vietnamese government over its investment-related decisions. The final award will be final and enforceable without the local courts questioning its validity.

Currently, Vietnam reserves the right to comply with the investor-state dispute settlement obligation for 5 years from the effective date of the EVIPA. Nonetheless, Duane Morris Vietnam has the legal and technical tools to use such provisions for the benefit of investors with immediate effect.

The author Dr. Oliver Massmann at omassmann@duanemorris.com with pleasure. Dr. Oliver Massmann is General Director of Duane Morris Vietnam LLC, a member of the board of directors of PetroVietnam Insurance JSC and the only foreign lawyer who presents in Vietnamese to the members of the NATIONAL ASSEMBLY OF VIETNAM.

Disclaimer: This warning has been prepared and posted for informational purposes only and is not offered as legal advice, nor should it be construed as such. For more information, see the firm’s full disclaimer.

source https://dailyhealthynews.ca/investment-in-the-healthcare-and-medical-device-sectors-food-drugs-healthcare-life-sciences/