As Vietnam is in the process of streamlining the government apparatus, the Vietnamese healthcare sector is also undergoing a period of strong transformation. In this context, mergers and acquisitions (M&A) activities, mainly concentrated in the private sector, are a trend in Vietnam. According to Associate Professor, Dr. Dang Duc Nhu, Senior Lecturer at the University of Medicine and Pharmacy – Vietnam National University, Hanoi and Senior Advisor of Medicallaw Company, if standardized and strictly controlled by law, M&A solutions can become a great driving force, helping the Vietnamese healthcare system expand its scale, improve its management capacity and easily access new technology.
PV: In the most understandable way, could you please tell us about the term M&A?
Associate Professor, Doctor, Doctor Dang Duc Nhu: M&A is a form of corporate restructuring in which there is a transfer of ownership, control, or assets between companies. The goal of M&A can be to expand scale and operating markets, increase competitiveness, access non-technology, human resources, or new supply chains, or optimize resources and costs. For example, a business buys part or all of another business’s equity fund to take control.
At that time, the acquired enterprise still exists as a legal entity but is under the management of the buyer. Or in the form of merger, two or more merged enterprises will form a new company. In short, M&A here is the process of transferring ownership or merging between enterprises. This is an important strategy to help enterprises grow quickly, optimize resources and improve their position in the market.
PV: Yes, so sir, in the current context in Vietnam, what benefits will M&A activities in the healthcare sector, when effectively implemented, bring, especially to the people?
Associate Professor, Dr. Dang Duc Nhu: M&A activities in the healthcare sector will bring many practical benefits, focusing on improving service quality and healthcare accessibility for all people. Regarding service quality and technological innovation, M&A deals often come with large capital investors and foreign investment. This investment is used to upgrade facilities, purchase modern medical equipment and apply advanced treatment regimens that are internationally standardized. Vietnamese people enjoy better healthcare services, so there is no need to go abroad for treatment.
In terms of network expansion and cost reduction, M&A helps clinic and hospital chains expand faster and bring high-quality medical services closer to people in remote areas, as well as help optimize operating costs. That can indirectly reduce the cost of medical examination and treatment, or diversify service packages at more reasonable prices. In terms of transferring and improving management capacity, international investors often bring a lot of hospital management experience: managing service quality according to international standards. This helps improve the medical examination and treatment process and improve the professional capacity of medical staff.
PV: Sir, how are M&A activities taking place in the healthcare industry in Vietnam? What do you think is the biggest challenge currently related to implementing this M&A solution?
Associate Professor, Dr. Dang Duc Nhu: M&A activities in Vietnam in the healthcare sector have been quite active in recent years, focusing on specialized clinic chains, private hospitals, pharmaceutical companies and pharmacy chains. The deals often involve international investment funds, or large corporations in the region. In Vietnam, M&A deals in healthcare are increasingly attracting the attention of many hospitals, pharmaceutical chains and clinics. However, there are two biggest challenges and complications related to M&A in healthcare. The first is the complexity of legal and specialized regulations.
M&A appraisal is much more complicated than other specialties, related to practice licenses, hospital professional operation licenses, fire prevention and fighting, environment, senior personnel, good doctors, then the list of drugs and equipment, regulations on health insurance.
The drug bidding is very difficult. It is the hospital’s autonomy mechanism, which can cause legal risks, and it is difficult for businesses to evaluate. So M&A activities need to have units, for example, Medical Law has implemented and consulted for over 200 hospitals nationwide.
Healthcare is a business of trust, so the quality of service must be closely linked to the team of medical experts. However, the biggest challenge today is how to retain and promote a team of good professionals, integrate a new management system without reducing the quality of medical examination and treatment, as well as some complex problems that can take a long time to resolve.
PV: With a population of over 100 million people, in your opinion, how potential and attractive is the Vietnamese pharmaceutical market to international investors?
Associate Professor, Dr. Dang Duc Nhu: In my opinion, the Vietnamese pharmaceutical market with over 100 million people is an extremely attractive market, highly appreciated by international investors. Vietnam has a large population and a very fast aging rate. Therefore, the demand for health care and long-term care will skyrocket in the coming decades. Regarding the growth of health spending, the middle class is growing very quickly in Vietnam and is increasingly interested in spending more on high-quality health care services, health insurance and advanced pharmaceutical products.
Regarding preferential policies and integration, the State’s policies are increasingly open and encouraging private investors, especially foreign direct investment (FDI) in the health sector. Deep international economic integration and signed trade agreements also open up opportunities for cooperation and technology transfer. Regarding the potential of the pharmaceutical market, Vietnam is one of the countries with the highest pharmaceutical market growth rate in the region. The demand for generic drugs, specialty drugs and vaccines is increasing.
PV: What do you expect from the HIMA international conference on M&A, which will be held for the first time in Vietnam. The event will take place this November?
Associate Professor, Dr. Dang Duc Nhu: On November 21, Medical Law will organize an international conference (HIMA) on mergers and acquisitions in the healthcare industry or (M&A). The event is authorized by the Hanoi People’s Committee and is considered the largest ever. Medical Law of Vietnam is currently a prestigious Vietnamese medical legal consulting company, with many large domestic private hospital and clinic chains and many foreign companies using its services.
As a speaker, I hope that the Conference will create a high-quality dialogue forum, a place for policymakers, legal experts, international investors and leaders of health facilities to discuss current legal barriers. The goal is to find solutions and recommendations to improve the legal framework and attract high-quality investment capital in the health sector.
In terms of selective investment promotion and connectivity, the Conference will be an effective bridge to introduce Vietnam’s potential investment opportunities, especially in priority areas such as specialized healthcare, medical technology and high-quality pharmaceutical manufacturing plants. Vietnam also needs to attract responsible investment capital, accompanied by technology transfer and advanced management techniques.
The conference will be a place to share international experiences in implementing successful M&A deals in healthcare, the importance of legal due diligence, specialized issues, and post-merger compliance, to ensure the effective and sustainable development of Vietnam’s healthcare sector.
PV: Sincerely thank Associate Professor, Doctor Dang Duc Nhu
