"Indonesia Pharmaceuticals & Healthcare Report Q2 2016" Published

The challenges facing domestic pharmaceutical firms in Indonesia will continue. While efforts to alleviate the country's reliance on pharmaceutical raw material imports are underway, these are unlikely to have a substantial impact until 2017. Moreover, the ability of Indonesia's universal healthcare programme to facilitate sales will be constrained by the country's medical services infrastructure, and low commodity prices will weigh on the economy and household purchasing power.

Headline Expenditure Projections

Pharmaceuticals: IDR77,643bn (USD5.7bn) in 2015 to IDR85,550bn(USD5.9bn) in 2016; +10.2% growth in local currency terms and 3.2% in US dollar terms.

Healthcare: IDR347,253bn (USD25bn) in 2015 to IDR387,513bn (USD27bn) in 2016; +11.6% growth in local currency terms and 4.6% in US dollar terms.

Risk/Reward Index

Indonesia ranks 11 out of 19 Asia Pacific markets on BMI's Pharmaceutical Risk/Reward Index, scoring 48.7 out of 100.0 in Q216. While the country has positive industry rewards, scoring 24.8 out of 44.0, it is dragged down by a low country reward score (10.2 out of 21) as well as higher industry risks (scoring 8.4 out of 21) and country risks (scoring 6.5 out of 14).

Full Report Details at
- http://www.fastmr.com/prod/1119010_indonesia_pharmaceuticals.aspx?afid=301

Key Trends And Developments

In January 2015, Royal Philips announced an agreement with the Sijunjung Regency in West Sumatra for the full-scale commercial implementation of Philip's mobile obstetrics monitoring service in the region.

That same month, Kalbe Farma announced that it has begun the construction of a bio-pharmacy raw material manufacturing plant in West Java, which is expected to commence commercial operations in 2017/2018.

In December 2015, Chief of Investment Coordinating Board Franky Sibarani noted that Singapore has expressed an interest to invest USD15mn into the pharmacy industry.

BMI Economic View

Indonesia's economy is undergoing a difficult transition as it shifts from a commodities export-led model, to one that is more sustainable, ie export-oriented industrialisation. In order to achieve our average real GDP growth forecast of 5.8% per annum over the next five years, improved reform momentum and faster infrastructure development will be necessary.

BMI Political View

Indonesian President Jokowi's move to reshuffle his cabinet and replace key economic ministers with technocrats will be positive for Indonesia's economy. However, we note that the positive effects will only be realised over the medium term; as such, we maintain our forecast for Indonesia's GDP growth to come in at 4.8% in 2015.

The Indonesia Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.

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