Country Report: Indonesia

Sep 01, 2013
By Pharmaceutical Executive

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Ask Indonesians about a bad experience in medical care and each will have a story to tell. The poor state of Indonesia's health care system has turned 'improving quality' into the top priority of the government of Indonesia. Better quality of care has become especially important as the fourth most populated country in the world moves into full traction with its plans to achieve universal health care coverage.

According to the Ministry of Health, 72 percent of the population, just over 176 million Indonesians, were already part of some type of health financing scheme. Now Indonesia's policymakers are committed to covering every citizen by 2019. The implementation of universal health care coverage will start in January 2014 and is widely seen as a significant step forward for Indonesia's 238 million people.


Total Market
Badan Penyelenggara Jaminan Sosial, BPJS as the system is locally referred to, aims to drastically increase the quality and access to medicines and medical treatment to the entire Indonesian population. From policymakers to health care providers, drug manufacturers to distributors, all stakeholders in Indonesia's health care and pharmaceutical sector are now facing the critical task of defining their role within this changing environment.


Key Indicators Indonesia
Most multinational companies (MNCs) do not expect to play a major role within BPJS but, despite the vast volume, serving BPJS will not be easy or cheap for local manufacturers either. Not only are they required to ramp up manufacturing capacity to serve a growing market, permits to manufacture –due to Indonesia's Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (jointly referred to as PIC/S) adherence– have become stricter than ever.


Courtesy of Sanofi
Increasingly important within Indonesia's changing pharmaceutical landscape is the role of the distributor. Not only will distributors play a key role in making universal healthcare coverage a reality by physically making medical devices and medicines available across Indonesia's complex geography, they will also play an essential role in identifying where and how the market will benefit from BPJS by providing the manufacturer with the latest data from the field.


Dr. Nafsiah Mboi, Minister of Health
Promising macro-economic data, exponential growth rates, demographic potential, and a growing middle class have drawn Indonesia into the international spotlight, earning a place among the world's 'pharmerging' countries. Executives should not stare themselves blind on the double digit growth rate however. Indonesia remains a market where both MNCs and local pharmaceutical companies can enjoy steep growth curves-- provided they are willing to invest in the long run. These long term investments can take on various formats, including manufacturing, partnering, and brand building. All will be central to function as an agent of change while Indonesia heads towards universal health care coverage.