Market Research Reports - Ken Research Indonesia Pharmaceutical Regulations

Indonesia Pharmaceutical Market will be led by Growing Generic Drugs and Bio-
pharmaceutical Market: Ken Research
Expansion of product portfolio by major pharmaceutical companies and increase in demand for
generic drugs were the key factors driving growth in Indonesia pharmaceutical Market.
The report titled “Indonesia Pharmaceutical Market Outlook to 2022 - By Therapeutic
Segment (Anti-Infectives, Gastrointestinal and Metabolism, Cardiovascular System, Central
Nervous System, Respiratory, Musculoskeletal, Dermatology, Genitourinary and Hormones,
Blood, Oncology), By Domestic and International Players, By Generic and Patent Drugs, By
OTC & Prescription Drugs, By Region” by Ken Research suggested a growth at a CAGR of 10.0%
in revenue in Indonesia Pharmaceutical Market by 2022.
Indonesia healthcare market has observed a favorable growth in the last 5 years. The market is
still under penetrated especially in the tier 2 areas in Indonesia as of 2017.
The launch and execution of JKN scheme by the government has led to surge in demand for
primary healthcare facilities and increased generic drug sale. The market has underscored
various deregulation programs which has stimulated foreign investment in the industry.
Indonesia Pharmaceutical market is dominated by domestic players which controlled majority
of the market in 2017. Recent favorable government regulations have facilitated the entry of
foreign players in the space. There are 206 pharmaceutical companies (182 domestic and 24
international companies) located in Indonesia.
The market is driven by deregulation in FDI regulations in pharmaceutical and favorable
government policies leading to increase in sale of generic drugs. Increased investment in
innovation of new drugs with higher margin led to increased profitability of pharmaceutical
companies. Expansion of major companies through mergers, acquisitions and alliances has
enabled companies to manufacture high end medicines and pharmaceutical products.
The local companies largely focus on generic drugs manufacturing that are dependent on
imported active pharmaceutical ingredients (API), mainly from China and India.
As Jaminan Kesehatan Nasional (JKN) has prioritized the use of generic drugs, the demand for
unbranded generic drugs has grown as Indonesians increasingly rely on generic drugs. This has
augmented the domestic players’ sales. But at the same time, the market has also witnessed an
increase in number of new players which has driven down the margins. Since the product
portfolio of majority domestic pharmaceutical companies is dominated by generic drugs, the
sales have gone up since 2014. Moreover, the prices of generic drugs are regulated and
consistent across Indonesia whereas the prices increase by 10% for branded drugs annually.