Recently released market study: Indonesia Pharmaceuticals & Healthcare Report Q3 2013

From: Fast Market Research, Inc.
Published: Wed Aug 07 2013

Theoretically, considerable opportunities for pharmaceutical manufacturers exist in relation to the Indonesian pharmaceutical market. Demand for medicines will continue to be supported by the country's large population, the rollout of the universal healthcare programme in 2014 (with the ultimate aim to cover all Indonesians by 2019) and the expansion of healthcare services. However, Indonesia will remain a risky operating environment, with market access hampered by a range of intellectual property barriers and the government's biased stance against foreign companies.

Headline Expenditure Projections

* Pharmaceuticals: IDR58,553bn (US$6.25bn) in 2012 to IDR63,915bn (US$6.56bn) in 2013; +9.2% growth in local currency terms and +5.1% in US dollar terms. Forecast broadly in line with the previous quarter.
* Healthcare: IDR220,081bn (US$23.56bn) in 2012 to IDR242,335bn (US$24.88bn) in 2013; +9.7% growth in local currency terms and +5.6% in US dollar terms. Forecast broadly in line with the previous quarter.

Full Report Details at

Risk/Reward Rating: In our Q313 Pharmaceutical Risk/Reward Rating (RRRs), following a slight adjustment of our assessment methodology, Indonesia slipped by one place to 13th position out of the 18 Asia Pacific markets. Its Rewards are viewed as being slightly better than the regional average, but its Risks profile is considerably more unfavourable, both in terms of industry- and country-specific risks, which will continue to detract foreign players from investing in the country's pharmaceutical market.

Key Trends And Developments

* In April 2013, in line with efforts to standardise procedure across the region, Indonesia adopted the Association of South East Asia Nations (ASEAN) terminology of a separate health supplement category, which distinguishes between health supplements and food and pharmaceuticals. Indonesia is likely to adopt ASEAN-harmonised regulations for a health supplements category by 2015, said Daniel Quek, the chairman of the ASEAN Alliance of Health Supplement Associations.
* In May 2013, a new regulation was introduced in Indonesia's public health insurance system, which distinguishes insurance participants who are subsidised by the government from those who are not. With criteria for the subsidy to be further regulated by the country's social affairs ministry, enrolment in the health insurance programme is mandatory for all Indonesian citizens. While the first stage of enrolment from January 1 2014 covers subsidised participants, citizens not eligible for subsidy will be enrolled from January 1 2019 onwards. Under the new regulation, the government will pay premiums for subsidised individuals, while premiums for non-subsidised workers will be shared between employees and their employers.

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