Laos was a French colony until 1953 and then underwent a civil war. Laos achieved political stability in 1975 when the war ended. Then, beginning in the late 1980s, Laos’ communist government started market reforms and opening up to the world. Although Laos is a small country with a population of 7 million, its natural resources, ongoing infrastructure projects, and foreign investment have helped aid the country’s economic development.
In the past decade, Laos’ GDP adjusted for Purchasing Power Parity (PPP) has more than doubled and is predicted to exceed $45 billion in 2017. For the past five years, Laos’ economy has sustained an average annual GDP growth rate of 7% due to its large mineral reserves, access to the massive Mekong River, and foreign investments primarily from China, Thailand, and Vietnam. In 2011, Laos transitioned from a low-income economy to a lower-middle-income economy and later joined the World Trade Organization (WTO) in 2013.
Healthcare in Laos
According to the World Health Organization (WHO), between 1997 and 2015, Laos’ poverty rate declined from 40% to 23% and average life expectancy increased from 57 to 67 years. Although there have been significant improvements in the country, Laos still has a developing healthcare system. With weaknesses in financing, health records, infrastructure, and management of health services, medical care in Laos remains inadequate and unevenly distributed.
The Laotian government currently has separate healthcare programs for different income groups: the State Authority for Social Security (SASS) for civil servants, the Social Security Office (SSO) for employees of state and private enterprises, the Community-based Health Insurance (CBHI) for informal-sector workers, the Health Equity Funds (HEFs) for the poor, and free maternal and child health services in selected provinces. The Ministry of Health (MOH) aims to achieve universal health coverage by 2025, but according to the WHO, the current health insurance programs only cover 20% of the total population.
The lack of coverage is partly due to the population being spread out in the country. Approximately 80% of the population live in rural communities and work in agriculture, and Laos is comprised of small villages clustered into various districts. The MOH has made efforts to provide services to more people by decentralizing into three administrative levels: a central Ministry of Health, provincial level administration, and district level administration.
However, the healthcare provided at the local level often struggles from a lack of qualified staff, inadequate infrastructure, and need for an affordable device and drug supply. As a result, Laos depends on international aid in the form of vaccines, training for medical professionals and staff, and strengthening of maternal and child health.
Wealthier individuals in need of medical care tend to visit Thailand for more expensive, but higher-quality treatment.
In 2015, total healthcare spending in Laos was $220 million and is predicted to rise as the economy grows. However, Laos will likely remain a small market due to its small population. Currently, there is a need for cheaper value medical products such as refurbished medical equipment and low-cost pharmaceuticals.
The Food and Drug Department (FDD) is the main regulatory authority in Laos and is responsible for regulating both pharmaceuticals and medical devices.
The most recent major legislation, the Law on Drugs and Medical Products No. 07/NA, was passed in 2012 and replaced the law from 2000. This 2012 law is in accordance with the ASEAN Medical Device Directive (AMDD) and provides stricter guidelines for drugs and medical products. Under this 2012 law, the MOH created classifications for medical devices and outlined the procedure for the registration of drugs and medical products used and distributed in Laos.
Medical devices are now classified in accordance with ASEAN standards. In Article 11 of the 2012 law, medical devices are classified into the following categories:
Type A – Low risk, such as: cotton, swabs, Band-Aids and others;
Type B – Low to medium risk, such as: surgical gloves, catheters and others;
Type C – Medium to high risk, such as: anesthesia equipment, endoscopic surgical equipment;
Type D – High risk, such as: craniotomy surgical equipment and others
Although Laos is a small country, it has a fast-growing economy and is poised to become a major energy producer in Southeast Asia with its hydroelectric power projects. Additionally, the Laos-China railway will be completed by 2021, further accelerating Laos’ economic growth. While the current healthcare system in Laos is underdeveloped, the government is improving its healthcare infrastructure with the help of its Asian neighbors through major investments and international aid agencies. Thus, Laos presents an opportunity to get involved early in the process to establish medtech and drug brand, reputation, and networks that will be essential in the future.