PHARMACEUTICAL INDUSTRY IN INDONESIA

Population: 246.9 million (2012)

Life expectancy: 69.32 years (2011)
Age Groups:
0-14 years: 27.3% (male 34,165,213/female 32,978,841)
15-64 years: 66.5% (male 82,104,636/female 81,263,055)
65 years and over: 6.1% (male 6,654,695/female 8,446,603) (2011 EST.)
Gross domestic product: 878 billion USD (2012)
Pharmaceutical market size: 6.5bn USD in 2012
Introduction:
Indonesias pharmaceutical sector has been growing steadily with double digit
compound growth since 2009 and projections of 14% growth for 2011 according to the
Indonesian Pharmaceutical Association. Indonesia is a highly attractive market for the
pharmaceutical industry given its large population as the fourth most populous country in
the world, but spending on healthcare is very low in comparison to neighboring countries of
similar GDP
Regulatory or Governing body:
The authority on Indonesia pharmaceutical regulations is the National Agency of Drug and
Food Control (NADFC). Registering drugs can be an extremely lengthy and taxing process.
Registration can take from one to three years
The Association of Southeast Asian Nations (ASEAN) Common Technical Documents (CTD)
must be used, and ASEAN standards should be followed. Generic pharmaceutical pricing is
regulated by the government. Pharmaceuticals included in the Essential Drugs List -- 92% of
which are generic and 2.5% of which are innovator -- cannot be sold for more than a 50%
margin. Other generics are also subject to pricing restrictions.
Pharmaceuticals are classified as indicated below:
Narcotics (category O),
Prescription medicines (category G),
OTC medicine with warning labels (category W), and
General OTC products (category F).
The NADFC also regulates drug advertising. All advertising materials must be approved by
the NADFC. Category G prescription drugs are not permitted to be advertised to the public.
Category W drugs can be advertised to consumers, provided they have warning labels on
packages. There is no restriction on the advertising of category F products.
Pharmaceutical companies in Indonesia:
The Indonesian Pharmaceutical Association states that 95% of locally produced drugs are
being consumed domestically, with the remaining 5% exported.
Domestic pharmaceutical firms have 70% of the Indonesian drug market. Almost 60 foreign
pharmaceutical companies control the remaining 30% of the Indonesian drug market; the
largest are Bayer, Pfizer, and GlaxoSmithKline (GSK).
Almost all pharmaceutical products registered in Indonesia must be manufactured in
country.
The only exceptions are patented products and drugs that cannot be manufactured
in Indonesia.
Foreign applicants for product registration must have an Indonesian manufacturing
facility or appoint an intermediary.
Indonesias Kalbe Farma, founded in 1966, has a market capitalization of $7 billion and is the
largest listed drug company in the Association of Southeast Asian Nations (ASEAN).

Foreign companies in Indonesia
More and more foreign drug companies are looking to Indonesia for future profits. Despite
restrictions on manufacturing and ownership, more than 50 international pharmaceutical
companies have business in Indonesia.
Foreign ownership in domestic drug companies is limited to 75 percent. The other 25
percent of a company must be owned by an Indonesian national.

Opportunities:
With the continuing expansion of the healthcare sector, demand for low-cost drugs
is likely to increase.
The Indonesian pharmaceutical market is largely import-driven, exports are likely to
increase as more domestic producers adhere to Good Manufacturing Practice (GMP)
standards.
To improve Indonesia pharmaceutical regulations and Good Clinical Practice (GCP)
standards, the country is becoming an increasingly attractive location for clinical
trials.



Indonesia Pharmaceutical and Healthcare Industry SWOT
Strengths
Significant market growth potential, with a fast-growing population.
Well-established local industry, with domestic players especially prominent in
manufacturing.
Sizeable and strong generic drug market, largely owing to the low-income
population.
Introduction of Good Manufacturing Practice (GMP) standards.
Weaknesses
The market is among the least developed in Asia.
No private insurance and no pharmaceutical reimbursement.
Lack of formal price controls leading to delays or rejections of marketing applications
if the proposed price is deemed too high.
Low purchasing power of large section of the population.
Regulatory system biased in favour of local drug producers.
Pharmaceutical sales through illegal channels.
Reliance on imported active pharmaceutical ingredients (APIs), which makes the
industry sensitive to currency fluctuations.
Opportunities
Demand for low-cost drugs to increase with the continuing expansion of the
healthcare sector and rising cost awareness.
Trade liberalisation within the Association of South East Asian Nations (ASEAN)
regional group to potentially speed up growth, as could government subsidies of
healthcare costs.
Exports likely to rise as more producers meet GMP standards.
The proposed privatisation of the local manufacturing industry holds considerable
benefits for the industry from private control and funding.
Rising attractiveness of Indonesia as a clinical trials base.
Government encouragement of exports.
Despite some problems with the programme, the government is planning to
consolidate the local industry in order to reduce costs.
Potential removal of the pharmaceutical industry from the negative investment list.
Threats
Poor intellectual property (IP) protection leading to reduced foreign investment
(FDI).
Poor efficacy of counterfeit drugs leading to a distrust of pharmaceuticals.
Inadequate healthcare coverage and lack of disease monitoring leading to epidemics.
Recently introduced regulation stipulating that all foreign companies must have local
manufacturing facilities.
Escalating raw material cost and taxation of imports resulting in pharmaceutical
products becoming prohibitively expensive.
Widespread corruption continuing to deter foreign investment.
Reduction of tariffs on drugs under ASEAN harmonization programme posing threat
to local industry.



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Desloratadine 0.5 750
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Omeprazole Pellets 8.5% 150 2100
Ondansetron Hydrochloride 100 70000
Ondansetron Hydrochloride Dihydrate 145 102375.1013
Ranitidine Hydrochloride Form 2 21400 355595.6876
Pt. Tatarasa Primatama 38430.35 3145884.933
Amlodipine Besilate Ph Eur 700 141388.9844
Amlodipine Besilate Ph.Eur 500 99278.11036
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Atorvastatin Calcium ( Form - P ) 8.85 6603.989843
Cetirizine Dihydrochloride Ph.Eur. 100 20139.77276
Cetirizine Hydrochloride 1425 218476.2608
Cetirizine Hydrochloride EP 50 4250
Cetirizine Hydrochloride USP 80 16000
Ciprofloxacin Base (DMF) 150 22500
Ciprofloxacin Hydrochloride 1500 49493.25563
Ciprofloxacin Hydrochloride USP 6000 174000
Ciprofloxacin Lactate Monohydrate 700 56161.06742
Dextromethorphan Hydrobromide 4900 830277.518
Diltiazem Hydrochloride 298 23936.87937
Enalapril Maleate 5 866.1736773
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Fluoxetine 150 16500
Fluoxetine Hydrochloride 124.55 12512.13837
Ibandronate Sodium 1 1237.390968
Itraconazole Pellets 22% 350 37961.98401
Ketorolac - USP 100 20000
Ketorolac Tromethamine 520 158882.5463
Levofloxacin 150 15500
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Loratadine 260 64659.73609
Moxifloxacin Hydrochloride (MOA2) 146 218804.6683
Naproxen Sodium 1370 55143.52345
New Products 0 87871.55411
Olanzapine Form 1 (Canada) 20 40000
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Omeprazole Pellets 3000 48000
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Ondansetron Hydrochloride 15 10976.98445
Ondansetron Hydrochloride Dihydrate 73 53421.10173
Pantoprazole Sodium USP 2 700
Rabeprazole Sodium 6 2200
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Ramipril 50 40000
Ramipril Ph.Eur. 30 30812.6949
Ranitidine Hydrochloride Form 2 5250 89094.52162
Repaglinide 1.9 7506.843484
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Rosuvastatin Calcium 0.45 2204.923982
Sertraline Hcl - LRM 50 7500
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Sparfloxacin 45 7499.004121
Telmisartan(CIP) 25 13506.15668
Valsartan 55 17147.81696
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Clopidogrel Bisulphate Form 1 1300 931902.8109
Pt.Dexa Medica 25.8 52318.77662
Atorvastatin Calcium ( Form - P ) 6 4500
Febuxostat 14.8 30830
Moxifloxacin Hydrochloride 5 16988.77662