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With its new healthcare insurance scheme, Jaminan Kesehatan Nasional (JKN), aiming to cover all citizens by 2019, next year will see Indonesia emerge as the most promising emerging market for pharma investment, according the Frost & Sullivan’s Reenita Das.
Indonesia is expected to be the most promising market for pharma next year, thanks to its new healthcare insurance scheme Jaminan Kesehatan Nasional (JKN), according to Reenita Das, partner and senior vice president of Healthcare & Life Sciences at Frost & Sullivan. JKN's goal is to cover all citizens by 2019. "In the short term, it is expected to boost the prescription drug demand in Indonesia as it will cover medical consultation and drug costs for participants. It is estimated that the drug spend as a percentage of total health expenditure will be close to 19 percent after JKN implementation," Das told PharmExec. "Local drug manufacturers like the Darya-Varia Group, Konimex, and Tempo Scan Pacific control about 75 percent of over the counter medicines and are expected to continue their dominance over the market. Currently in 2014, over the counter medicine covers 40 percent of total pharmaceutical market in Indonesia. This will grow to approximately 50 percent by the end of 2015." Das predicts that more global multinational pharma companies will make more deals with local, home grown companies in this region. "This will continue to be expedited in response to local governments protectionist policies and to help in private-public partnerships. For example, in February 2014, Fresenius Kabi AG agreed to buy a 51 percentstake in Indonesian drug maker PT Ethica Industri Farmasi from PT Soho Global Healthcare, which is Indonesia’s oldest pharmaceutical company. The deal is estimated to be worth $200 million. With this move, Fresenius Kabi has become the latest foreign company to invest in Southeast Asia’s growing healthcare market."