Review Indonesia August2017

EXCLUSIVE INTERVIEWS MAKING SENSE OF THE SPOTLIGHT ON A ANTIBIOTICS:
WITH THE MINISTRIES OF HALAL LAW THRIVING MEDTECH WHEN LESS IS MORE
HEALTH AND INDUSTRY PAGE 14 MARKETPLACE PAGE 43
PAGE 12 & 13 PAGE 38
THE AWAKENING GIANT? page 21
INDONESIA AUGUST 2017

Acknowledgements
Pharmaboardroom would like to thank:
Prof. Nila Moeloek, minister of health of the Republic of Indonesia
Airlangga Hartarto, minister of industry of the Republic of Indonesia
Maura Linda Sitanggang, director general of pharmaceuticals and medical

devices, ministry of health
Penny Lukito, head, BPOM
Sigit Priohutomo, chairman, DJSN
Fachmi Idris, president director, BPJS
Agus Prabowo, chairman, LKPP
Parulian Simanjutak, executive director, IPMG
Darodjatun Sanusi, executive director, GP Farmasi
Sugihadi Hadiwinoto, chairman, Gakeslab
Kuntjoro Adi Purjanto, president, PERSI
Hasbullah Thabrany, chairman, Center for Social Security Studies Universitas

Indonesia (CSSUI)
Wiwy Sasongko, Managing Director, QuintilesIMS
As well as the companies we have met for their support, assistance and enthusiasm.
2 Healthcare & Life Sciences Review: Indonesia www.pharmaboardroom.com

HEALTHCARE & LIFE SCIENCES
REVIEW INDONESIA
Exclusive interview
with the Director
General of
Pharmaceuticals
and Medical Devices
at the Ministry of
Health, Maura Linda
CONTENTS
Sitanggang — August 2017
12
2 ACKNOWLEDGEMENTS
5 PREFACE
6 FOREWORD
The Awakening 8 SNAPSHOT IN FIGURES

Giant?
Cover Story 12 GOVERMENT PERSPECTIVE INTERVIEW
21 Maura Linda Sitanggang, Ministry of Health
13 GOVERMENT PERSPECTIVE INTERVIEW

Airlangga Hartarto, Minister of Industry
14 REGULATORY CHANGE FEATURE The Halal Law
16 PUBLIC PROCUREMENT INTERVIEW

Agus Prabowo, LKPP
18 UNIVERSAL HEALTHCARE INTERVIEW

Fachmi Idris, BPJS Kesehatan
21 THE AWAKENING GIANT? COVER STORY
22 Great Expectations
23 Plunging Into the Red
27 Creeping Protectionism
29 Market Distortions
Making sense of the
Halal Law 30 Winning Stratagems
Feature
14 34 The Quest for Partners
35 There for the Taking
36 MANUFACTURING AND WOMEN’S HEALTH

The Healhcare & Life Sciences Review was produced INTERVIEW Aylie Widjaja, Exeltis Indonesia
by PharmaBoardroom.
38 MEDTECH FEATURE Market Opportunities
Project Publisher: Mariuca Georgescu
Senior Editor: Louis Haynes 40 CEO PROFILE FEATURE Suryo Suwignjo, Philips
Editor: Patrick Burton
Project Director: Lisa Diericks 41 MNC STRATEGY INTERVIEW Milan Paleja, Novartis
Project Coordinator: Luis Sancho
Project Assitants: Anna-Luisa Vogt, Pauline Besson 43 EMERGING THREATS FEATURE Anti-Microbial
Graphic Design: Miriam León, Laura Breitfeld Resistance
For exclusive interviews and more info, please log onto 44 CONSUMER HEALTHCARE INTERVIEW
www.pharmaboardroom.com or write to contact@focusreports.net. Holger Welters, Beiersdorf
Copyright: All rights reserved. No part of this publication maybe reproduced in any
form or by any means, whether electronic, mechanical or otherwise including photo- 45 CLINICAL TRIALS FEATURE Untapped Potential
copying, recording or any information storage or retrieval system without prior written
consent of Focus Reports. While every attempt is made to ensure the accuracy of the
information contained in this report, neither Focus Reports nor the authors accept any
liabilities forerrors and omissions. Opinions expressed in this report are not necessarily
those of the authors.
www.pharmaboardroom.com Healthcare & Life Sciences Review: Indonesia 3

STAY IN TOUCH:
@pharmaboardroom
www.pharmaboardroom.com
JOIN THE CONVERSATION
Indonesia
Additional full-feature interviews from our Indonesia 2017 Report can be
accessed on PharmaBoardroom, the premier website for C-Level executives,
consultants and state actors in the pharmaceuticals and life sciences sector,
alongside hundreds of exclusive interviews featuring the main movers and
shakers of the industry, free country reports and sector insights supplemented
by the latest news from global markets.
AMPLIFIED CONTENT IN BRIEF
STEVEN LEE @pharmaboardroom

Country Lead, Siemens Healthineers New Article: The Indonesian #Halal Law:
Indonesia A Headache for #Pharma. #Indonesia
#Healthcare
RUFI SUSANTO Read the article
President (Core Market) and Senior
@pharmaboardroom
Managing Director Indonesia,
IDS Medical Systems @dedeyusuf_1, chairman #CommissionIX
#Parliament, exposes #education to drive
the lifestyle’ change in #Indonesia to fight
SAANJAY SHAMDASANI
#chronicdiseases
Head, Pharmaceutical and Life
Sciences Committee, American @pharmaboardroom
Chamber of Commerce Indonesia #Generics penetration in Southeast #Asia.
#APAC #Pharma #Singapore #Indonesia
JONATHAN SUDHARTA #Malaysia #Philippines #Thailand
Member of the Board of Directors,
Mensa Group, Indonesia See in detail
@pharmaboardroom
Benoit Martineau of #Sanofi on helping
OMAR LUQMAAN HARRIS
implement the Indonesian government’s patient
General Manager Pharma, GSK
access roadmap
Indonesia
Read the interview

PREFACE
Preface
Indonesia is a country with a population of 260 million, contribut-
ing one third of ASEAN’s total GDP, boasts a burgeoning middle
class, and has a pharmaceutical and life sciences sector worth USD
5.5 billion with seven percent annual growth. When the rollout of an
ambitious universal healthcare plan, aiming to cover the entire pop-
ulation by 2019, is added into the equation, it is clear that Indonesia
cannot be ignored by the international investment community.
The country’s almost unlimited potential, however, remains large-
ly unfulfilled and numerous barriers stand in the way of Indonesia
taking its place at the top table of pharmaceuticals and life scienc-
es in Asia and the world. Indonesia’s vast and scattered geography,
the government’s tendency towards cost-containment, the fact that
70 percent of the market remains in the hands of local players, and
the country’s reputation for unpredictable and oblique regulatory
changes all pose challenges for existent players, new market entrants,
and investors alike.
Through in-depth interviews with government representatives,
CEOs of the leading MNCs implanted in the country, as well as the
leaders of Indonesia’s rich ecosystem of local companies, a picture
emerges of a pharmaceutical and life sciences market on the cusp of
realizing its massive potential, but with numerous hurdles still to
overcome.

STRAP
FOREWORDIN HERE PLEASE
Strap subhead in here please
Dear members of the international healthcare community,
I am proud to introduce the 2017 edition of the Indonesia Healthcare & Life
Sciences Review, which I consider an excellent opportunity to showcase the pro-
gress underway throughout the country.
Along with continued increase in the quality of life in Indonesia over the last
few decades, pharmaceutical and healthcare industries remain side by side as allies
in overcoming the challenges to bring high quality solutions and ensure the high
quality of health system.
Beginning in 2014, Indonesia has embarked on a transformative transition
towards achieving universal social health insurance coverage in 2019; to ensure
access, affordability and quality of health services across the country.
Within this very important national priority, the Government continues to col-
laborate inclusively with all stakeholders ranging from public, private, academia
and civil society groups.
Alongside this national undertaking is the rapid growth of Indonesia’s pharma-
ceutical market. Throughout the years, Indonesia continues to increase in prom-
inence, both globally and in the Asia Pacific region. As of today, the outlook of
Indonesia health system has prospered into a solid foundation of resilience and
ensured access to medicine for its entire population.
Through the Indonesia Healthcare & Life Sciences Review 2017, I invite all
members of the global pharmaceutical and healthcare communities to take a close
look at the promising opportunities Indonesia has to offer, and to consider how
they can leverage their unique expertise and capabilities to support Indonesia’s
path in national health development.
Sincerely,
Prof. Nila Moeloek, MD, PhD

Minister of Health of the Republic of Indonesia

STRAP IN HERE PLEASE
LOCAL
CONVERSATIONS
GLOBAL
CONNECTIONS
We are present in more countries than anyone else.

We speak directly with healthcare leaders and pharmaceutical executives.
We are ready to share their insights and experiences with you.

SNAPSHOT IN FIGURES
Health Overview
INDONESIA IN FIGURES
POPULATION: 258.3 MILLION (5TH IN WORLD) RELIGIONS: MUSLIM 87.2%, CHRISTIAN 9.9%,
HINDU 1.7%, OTHER 0.9% UNSPECIFIED 0.4%
CAPITAL: JAKARTA (10.3 MILLION)
GDP (PPP): USD 3.033 TRILLION
AREA: 1,904,569 SQ KM (15TH IN WORLD) GDP (PPP) PER CAPITA: USD 11,700
LIFE EXPECTANCY AT BIRTH: 72.7 YEARS
Source: : CIA World Factbook (2016)
INDONESIA POPULATION PROJECTIONS HEALTHCARE COVERAGE PROJECTION

NUMBER OF PEOPLE
2014 250 3 YEARS INDONESIA UNIVERSAL HEALTHCARE
2014-2019
255.5
2015
2.2% 133,423,653 156,793,287
2020 271.1
8.4%
284.8 2014 2015

2025
PROJECTION
13.9%
2030 296.4
171,939,254
18.6%
2035
305.6
+22.2%
(In million persons)
2016 Source: BPJS Kesehetan
HEALTHCARE SPENDING IN ASEAN TOTAL HEALTHCARE EXPENDITURE AS A

% OF GDP IN INDONESIA, 2010-2019F
INDONESIA SPENDS LESS ON HEALTHCARE THAN MANY
OF ITS REGIONAL PEERS HEALTHCARE EXPENDITURE (USD BILLION)
4%
PERCENTAGE OF GDP
3.2%
LAOS 1.9% 3.0%
2.7%
3%
MYANMAR 2.3%
INDONESIA 3.6%
2%
MALAYSIA 4.2%
PHILIPPINES 4.7% 1%
THAILAND 6.5%
0%
VIETNAM 7.1% 2010 2015 2020F
Source: WHO Data Series; Frost & Sullivan Analysis

SNAPSHOT IN FIGURES
Pharma Market
NUMBER OF PHARMA COMPANIES IN INDONESIA
VALUE IN IDR BILLION PERCENTAGE (%) CAGR IN LAST 5 YEARS (%)

(2016) (2016)
4
SOE 47,636 72% 7.07%
178
DOMESTIC 47,636 72% 7.07%
24 17,695 28% 9.83%

MNC
Indonesian pharmaceutical market is 27% of the total ASEAN market

Source: Ministry of Health & IMS
MOVING ANNUAL TOTAL VALUE SHARE (PHARMACY + HOSPITAL + DRUGSTORE)
4Q12 42% 16% 37% 5%

GROWTH(%)
4Q13 42% 16% 37% 5% 3.7% 5.6%

PHARMACY
4Q14 41% 17% 35% 6% -2.0% -4.2%

+ -0.6% -3.1%
4Q15 41% 18% 35% 6%
4Q16 42% 17% 34% 6% -0.6% -3.1%
4Q12 63% 6% 30% 1%

18.3% 22.2%
4Q13 64% 6% 29% 1% MNC
HOSPITAL
11.4% 5.3% DOMESTIC

4Q14 63% 5% 31% 1%
39.2% 6.8%
4Q15 58% 5% 37% 1% DOMESTIC
11.7% 9.5% PRESCRIPTION
4Q16 58% 4% 37% 1%
DOMESTIC NON
PRESCRIPTION
4Q12 29% 32% 29% 10% 22.1% 18.8% MNC

PRESCRIPTION
4Q13 30% 31% 30% 10% 3.5% -2.7% MNC NON

DRUGSTORE
PRESCRIPTION
4Q14 30% 32% 28% 9% 0.8% -6.8%
4Q15 31% 33% 26% 10% -3.2% -10.6%
4Q16 31% 35% 24% 10%
Source: QuintilesIMS

SNAPSHOT IN FIGURES
Pharma Market Growth
TOTAL MARKET
MOVING ANNUAL TOTAL (MAT) VALUES (Billions Indonesian Rupiees)
THE INDONESIAN PHARMACEUTICAL MARKET HAS GROWN AT 7.49% IN MAT Q4 2016
2.973
GROWTH(%)
4Q12 9.877 20.290 16.629
3.449
4Q13 10.958 22.628 18.862 12.31
3.739
4Q14 12.174 23.678 20.005 6.62
3.602
4Q15 14.179 24.620 20.127 4.92
3.809
4Q16 14.886 27.068 21.450
7.49
4Q 2016
22.9% MNC PRESCRIPTION

DOMESTIC NON 32.1% MNC
PRESCRIPTION PRESCRIPTION
37.6%
NON 0.3% DOMESTIC
PRESCRIPTION MNC
PRESCRIPTION
UNBRANDED GENERIC
MNC NON
MNC NON 5.7% PRESCRIPTION PRESCRIPTION
PRESCRIPTION 62.4%
11.0% DOMESTIC NON
28.9% PRESCRIPTION
DOMESTIC UNBRANDED DOMESTIC PRESCRIPTION
GENERIC BRANDED
CAGR 5 Y
IN % TOTAL MNC DOMESTIC
TOTAL 7.80 9.83 7.07

PRESCRIPTION 8.59 10.80 7.47
PRESCRIPTION BRANDED 7.77 10.71 5.76
UNBRANDED GENERIC 12.51 19.40 12.37
NON PRESCRIPTION 6.54 6.39 6.57

SNAPSHOT IN FIGURES
Leaderboards
TOP 10 COMPANIES IN PHARMACY SECTOR
MAT Value 4Q16 (Billions Indonesian Rupiees) + MARKET GROWTH
SANBE 549 6.3% 2.8%

DEXA MEDICA 508 5.9% 11.0%
KALBE FARMA 480 5.5% 9.0%
PFIZER 364 4.4% 3.1%
SANOFI-AVENTIS 296 3.4% -3.1%
BAYER INDONESIA 248 2.9% 2.1%
LAPI 247 2.9% 11.6%
B. INGELHEIM 237 2.7% 10.9%
MERCK INDONESIA 231 2.7% 4.8%
NOVELL PHARM 229 2.6% 15.7%
Average growth of pharmacy sector: 1.8% Source: QuintilesIMS
TOP 10 COMPANIES IN HOSPITAL SECTOR
MAT Value 4Q16 (Billions Indonesian Rupiees) MARKET GROWTH
DEXA MEDICA 875 8.3% 6.9%

KALBE FARMA 826 7.9% 6.7%
SANBE 737 7.0% 17.2%
NOVARTIS 421 4.0% 5.9%
ROCHE 412 3.9% 24.2%
OTSUKA 385 3.7% 24.3%
SANOFI-AVENTIS 283 2.7% -4.6%
ASTRAZENECA 278 2.6% 34.6%
B. INGELHEIM 276 2.6% 60.9%
NOVELL PHARM 274 2.6% 27.4%
Average growth of hospital sector: 10.3% Source: QuintilesIMS
TOP 10 COMPANIES IN DRUGSTORE SECTOR
MAT Value 4Q16 (Billions Indonesian Rupiees) MARKET GROWTH
KALBE FARMA 287 5.0% -3.2%

PHAROS INDONESIA 282 4.9% -5.2%
MERCK INDONESIA 254 4.4% -5.0%
DEXA MEDICA 195 3.4% 3.6%
BAYER INDONESIA 183 3.2% -12.7%
DARYA VARIA 167 2.9% 2.0%

PFIZER 158 2.7% -20.8%
KONIMEX 151 2.6% -3.7%
SANBE 145 2.5% -0.4%
FAHRENHEIT 143 2.5% 3.3%
Average growth of drugstore sector: -5.8% Source: QuintilesIMS

GOVERNMENT PERSPECTIVE
Maura Linda Sitanggang, Ministry of Health
SELF-
RELIANCE AND
INNOVATION
Maura Linda Sitanggang, director general at the In- THE FIRST GOAL ENTAILS THE ACCESS
donesian Ministry of Health, describes the Ministry’s OF MEDICINES THAT WE WISH TO
roadmap for ensuring that all Indonesians have ac- GUARANTEE FOR ALL INDONESIANS.
cess to medicine and how the Indonesian pharma- IN THIS REGARD, THE UNIVERSAL
ceutical industry has developed its self-reliance and HEALTHCARE SYSTEM (JKN) HAS BEEN
innovativeness. AS EFFICIENT A PARTNER AS WE COULD
HCLS: How does the Ministry of Health organize
HAVE HOPED FOR.
its priorities and how far along have you come to-
wards reaching the initial goals since you assumed device industries and the development of their viability.
your position as director general last year? Indeed, local manufacturers still have very low capaci-
MAURA LINDA SITANGGANG (MLS): We have ty when it comes to active pharmaceutical ingredients
five priority goals within our responsibility. The first (APIs), as 95 percent of the APIs used in Indonesia are
goal entails the access of medicines that we wish to imported from countries such as China and India.
guarantee for all Indonesians. In this regard, the uni- We would like to encourage the national industry to
versal healthcare system (JKN) has been as efficient become more innovation-centered.
a partner as we could have hoped for. We work with
two powerful tools to ensure our success: the national HCLS: The Ministry of Health has designed a 15-
formulary for medicines – which already encompass- year roadmap to transform the Indonesian phar-
es more than 1,027 items and is continously updated ma industry into an innovative industry. Could
- and the electronic purchasing through e-catalogue you expand on the construction of this roadmap?
of medicines – which is under the supervision of the MLS: This plan consists of three stages of five years
Public Procurement Agency of Indonesia (LKPP) and respectively. We will focus on cooperation and trans-
allows the public healthcare facilities to avoid long ten- fer of technology in the first five years. The second
der processes as it includes most of the medical prod- five years will focus on acquiring and developing the
ucts needed while guaranteeing the compliance of the technology, and the last five years will be to witness
solutions listed. the local industries launch their own, locally manufac-
The second goal consists of the control of medicines, tured products by mastering their own innovative tech-
which has been mandated to the National Agency of nologies. Overall, we would like to see local companies
Food and Drug Control Indonesia (BPOM). invest higher percentages of their revenues into their
The third and the fourth goals are highly related, R&D divisions.
i.e. the improvement in quality of the pharmaceutical This ambitious goal really requires a collaborative
services and the responsible use of medicines. In these effort from the industry and the Ministry. However,
priorities, we have been setting the pharmaceutical ser- we are dedicated to support the industry as best as we
vice standard required in the healthcare facilities such can. In this sense, we have installed a bottom-up infor-
as national and international accreditations that are to mation flow to directly gain inputs from the industry,
be earned. while at the same time, the industry can easily have us
The fifth, and last goal, is centered on the securing take part in the challenges they meet and the successes
the viability of the pharmaceutical as well as medical they celebrate.

GOVERNMENT PERSPECTIVE
Airlangga Hartarto, Minister of Industry
BUILDING DOMESTIC
MANUFACTURING
CAPABILITIES
Airlangga Hartarto, Minister of Industry of Indonesia, explains the Ministry’s
commitment to creating a business-friendly environment and mutually ben-
eficial collaboration between public and private stakeholders that are play-
ing a role in the implementation of Universal Healthcare Coverage (JKN).
national direct investments to Indonesia. Thus, we are

Airlangga Hartarto actively working on creating the regulatory environ-
ment that will bring those investments through several
MINISTER OF legal initiatives such as tax incentives.
INDUSTRY
HCLS: Indonesia is one of the strongest pharma-
ceutical markets within the region, with a 5.5 bil-
HCLS: What are the main concerns of the Ministry lion USD valuation and an incredible 12.6 percent
of Industry regarding the healthcare industry? annual growth. From the Ministry’s perspective,
AIRLANGGA HARTARTO (AH): Concretely, the what are the steps that the pharmaceutical industry
pharmaceutical sector represents around 9.8 percent of should undertake in order to leverage such growth
non-oil and gas industry GDP contributions and there- potential?
fore is one of our main concerns. AH: Firstly, the implementation of JKN is going to be
Our job in the healthcare industry is to build up the one of the main drivers of the industry’s growth. Hence,
business environment needed to foster the domestic private industry has to be at the forefront of the imple-
manufacturing of medicines as well as medical equip- mentation of the aforementioned promising govern-
ment. Indonesia is the fourth most populated country mental program through constructive Public-Private
worldwide and consequently, is a strategic market for Partnerships (PPPs).
healthcare companies because of the current and the Secondly, the pharmaceutical industry has to verti-
future potential that it offers; even more since 2014 cally integrate its business across the value chain, which
when the Universal Healthcare Coverage (JKN) started its means reducing its current dependence on foreign
implementation. We feel that to fulfil the national needs imports of APIs,95 percent of which come from coun-
it is highly important to produce locally. Both national as tries such as China and India.
well as international players have to collaborate in order Thirdly, technology plays an important role in
to bring high quality, effective, and cost attractive health- enhancing the operational efficiency ratios of the phar-
care solutions to the entire Indonesian health system. maceutical industry, which is crucial for those compa-
nies that want to take advantage of the huge local mar-
HCLS: Your mandate is expected to end in 2019, ket through enlarging patient access to their medicines.
what is your action plan to achieve your goals until Fourthly, pharmaceutical companies have to quickly
then? adapt their offering and procedures to those local regu-
AH: We are fully aware that in order to create a strong latory specifications such as the Halal Law, which might
domestic industry we need to attract both foreign and soon be applicable for pharmaceutical products.

REGULATORY CHANGE
The Halal Law
THE HALAL LAW:

A HEADACHE FOR
PHARMA
The Halal Product Assurance Law, enacted in 2014 and due
to be implemented across Indonesia in 2019, will mandate that
all food and drink that that enters, is distributed, and is traded
in Indonesia must be halal certified. However, the law will also
extend to cover all medicines, chemicals and biological prod-
ucts; creating a serious headache for the Indonesian pharma-
ceutical industry.
S
ome industry leaders pharmaceutical industry to com- sciences sector as pharmaceutical
have argued that the ply with new regulations as soon companies could stop producing
‘Halal Law’ will simply as possible. Minister of Industry drugs in Indonesia or even refrain
be unworkable in prac- Airlangga Hartarto affirms that from bringing them to market for
tice. Darodjatun Sanusi, “pharmaceutical companies have fear of sanction for non-compli-
executive director at GP Farmasi to quickly adapt their offering and ance.” These potential sanctions are
(National Association of Local procedures to local regulatory spec- strict, with failure to maintain the
Companies in Indonesia), postu- ifications such as the Halal Law, halal status of a product that has
lates that “any form of mandatory which might soon be applicable for obtained a Halal Certificate being
implementation of halal certifica- pharmaceutical products.” punishable by imprisonment of up
tion, as it is projected now, will be This legislation stands as a to five years or a fine of up to Rp
close to impossible as 95 percent direct threat to the operations of two billion (USD 150,000).
of our raw pharmaceutical ingre- pharmaceutical MNCs with oper- Local pharmaceutical outfits
dients are imported; coming from ations in Indonesia as well as to also stand to be negatively impact-
different sources and making it Indonesian patients’ ability to ed by this controversial law; with
pretty difficult for the government access innovative and potentially state-owned vaccine producer Bio
to audit the producers on the halal life-saving treatments. In the words Farma calculating that the nation’s
status of their products.” of Parulian Simanjuntak, executive vaccine industry faces up to Rp 1.5
However, the Indonesian gov- director of IPMG (International trillion (USD 156 million) in losses
ernment seems to be steadfast in Pharmaceutical Manufacturers should the bill be passed into law
its determination to deploy the Group), “[the Halal Law] could in its current form. Additionally,
Law and has been encouraging the pose a real menace to the life as A. Lin Neumann, managing

REGULATORY CHANGE
The Halal Law
[THE HALAL LAW] COULD POSE A REAL

MENACE TO THE LIFE SCIENCES SECTOR
AS PHARMACEUTICAL COMPANIES COULD
STOP PRODUCING DRUGS IN INDONESIA OR
EVEN REFRAIN FROM BRINGING THEM TO
MARKET FOR FEAR OF SANCTION FOR NON-
COMPLIANCE. PARULIAN SIMANJUNTAK, IPMG
director of the American Chamber into Indonesia. Minister Hartarto There is also the potential that
of Commerce in Indonesia, high- avows that “We are fully aware that the Halal Law will create oppor-
lights, “The Halal Law would mean in order to create a strong domes- tunities, especially for companies
that [pharmaceutical] companies tic industry we need to attract both with manufacturing in Indonesia.
are required to separate their man- foreign and national direct invest- Some industry players are starting
ufacturing and supply chain from ments to Indonesia. Thus, we are to consider the potential of posi-
other products.” actively working on creating the tioning Indonesia, the country
In terms of the Law’s impact on regulatory environment that will with the world’s largest Muslim
investment into Indonesia, some certainly bring those investments.” population, as a Halal manufactur-
believe that the damage has already How regulatory certainty for ing hub to serve not only nation-
been done. The impression that pharmaceutical companies can al demand but also other mar-
Indonesia remains a high-risk coun- be squared with the Halal Law kets with predominantly Muslim
try to do business where the regu- remains unclear, but state-industry populations such as the Middle
lation can change practically over- dialogue is ongoing to find a solu- East. Dede Yusuf, chairman of
night has been compounded by the tion. IPMG’s Simanjuntak posits Commission IX of the House of
Halal Law, especially as the legisla- that “there are two solutions that Representatives responsible for
tion’s implementation regulation should be discussed: amend the law the Health and Manpower sectors,
for the pharmaceutical industry has in order to take out pharmaceuti- states that “we would be delight-
not yet been issued; creating a lot of cal drugs from the Halal context, or ed if companies could make Halal
question marks and uncertainty. make voluntary the application of medicines and they would even be
However, the Indonesian state such law within the manufacturing able to sell them to other Muslim
remains eager to attract investment process of pharmaceuticals.” countries.”

PUBLIC PROCUREMENT
Agus Prabowo, LKPP
EFFICIENCY AND
TRANSPARENCY
THROUGH
TECHNOLOGY
Dr. Agus Prabowo, chairman at LKPP (National Pub-
lic Procurement Agency) explains the importance of
embracing technology to gain efficiency and effective-
ness in the public procurement process for healthcare
products and highlights the outcomes of the imple-
mentation of an e-catalog in Indonesia. AGUS
PRABOWO
HCLS: Could you please introduce are the main
chairman, LKPP
activities of the LKPP?
AGUS PRABOWO (AP): LKPP is the National
Public Procurement Agency and is a governmental insti-
tution that was established back in 2008. LKPP’s main
mandate is to reform the current procurement model,
which represents a significant percentage within the pendence of Indonesia on medicines and medical de-
total state budget, towards a more efficient, transparent, vices imports.
and reliable procurement system. My main priority in healthcare is to empower the use
In this sense, we have four strategic underpinnings of better systems such as e-catalog to serve all public
to support our mission: regulatory, education, IT, and hospitals or public care centers in their routine health-
integrity. We create detailed and solid procurement reg- care expenditures. I want to highlight that e-catalog is
ulation to avoid any misunderstanding, we educate all going to play an important role in the implementation
government officials to successfully implement our pro- process of universal healthcare coverage (JKN) that the
curement programs, we empower the use of technology current government is putting in place in Indonesia;
in our activities, and we ensure that all the three afore- LKPP is highly aligned with the government’s goals.
mentioned guidelines are aligned towards a more effi-
cient, transparent and reliable procurement system. HCLS: How engaged is LKPP in the successful im-
plementation of JKN?
HCLS: LKPP is in charge of formulating, devel- AP: We act as mediators between the producers and
oping and implementing public procurement poli- users, which are industry and government respective-
cies for several industries. Could you expand on the ly. Indeed, we put both stakeholders together to define
main priorities on your agenda that are related to the specifications of the medicines or medical devices
the healthcare industry? as well as the price to subsequently list such products
AP: LKPP oversees several industries, but healthcare in an open market, in this case e-catalog, that will pos-
plays an important role in our operations and we are itively impact all the actors within the healthcare sec-
creating a more open market through several initiatives tor. We have disrupted the way procurement is done in
such as “e-catalog”, which is an e-market place for med- Indonesia through implementing technology in order
icines and medical devices. This is even more complex to minimize inefficiencies within the tendering system
to manage than other sectors because of the high de- such as transparency and lead times.

PUBLIC PROCUREMENT
Agus Prabowo, LKPP
HCLS: How prepared is Indonesia to embrace

such technological developments?
AP: There are some inherent challenges in Indonesia
such as infrastructure and geography but we have to
start implementing best practices as soon as possible.
The longer we wait, the fewer benefits we will get from
being efficient since the beginning of JKN program as
well as the greater difficulties of implementing improve-
ments in later stages. In my opinion, private industry
should be onboard with such a transformation and
Public Private Partnerships (PPPs) would be an inter-
esting way to advance in this regard.
WE HAVE DISRUPTED THE WAY

PROCUREMENT IS DONE IN INDONESIA
THROUGH IMPLEMENTING TECHNOLOGY
IN ORDER TO MINIMIZE INEFFICIENCIES
WITHIN THE TENDERING SYSTEM SUCH
AS TRANSPARENCY AND LEAD TIMES.
HCLS: Are you collaborating with other regional

HCLS: How can the e-catalog positively impact the and international institutions to identify and im-
procurement process for medicines? plement best practices in the healthcare procure-
AP: In the past, when the procurement system was still ment arena?
fully based on tenders, procurement was supply oriented AP: We have been really open to learning from other
but, with e-catalog, we have changed this paradigm and countries since our inception back in 2008. Indeed, sev-
now the procurement system is demand-driven. eral programs that we have developed are based on in-
Furthermore, LKPP aims to obtain high quality ternational best practices from countries in our region
healthcare products at an affordable price; indeed, qual- such as South Korea but also other markets such as
ity cannot be jeopardized by any other criteria in health. Europe. In the next few weeks, we have a trip to Europe
Moving from being price- to quality-driven has been a to develop new ideas for PPP schemes, new evaluation
change in the Indonesian mindset and, in this regard, systems such as Multiple Criteria Decision Analysis
e-catalog ensures that all products listed comply with (MDA) for pharmacies, and high tech medical equip-
national regulation and, are therefore of high quality. ment procurement practices.
In addition, the e-catalog gives continuous procure-
ment service that ensures that any public hospital or HCLS: What are the main objectives that you
point of care that gets funded by the government will would like to accomplish in the upcoming years?
get the medicine or medical device in the quantity and AP: My main objective is to successfully implement
time needed. Tenders do not offer uninterrupted service and consolidate the e-catalog in the sectors that LKPP
and their process is highly time-consuming. is serving, putting onboard all industry stakeholders.
It is important to highlight that e-catalog, as a tool, is Secondly, building up domestic manufacturing capa-
easily scalable to any public institution in the country, bilities in key areas such as healthcare is within my stra-
creates reliable data, and ensures transparency through- tegic roadmap. Finally, I want to continue supporting
out all the procurement process avoiding any misalign- the government in fighting against corruption through
ment with the regulation. fostering high transparency in all our activities.

UNIVERSAL HEALTHCARE
SPREADING plan and one of those is targeting the challenge of in-

creasing the membership base of JKN-KIS. Obviously,
HEALTH there are annual registration targets that are support-

ed with specific initiatives. In this sense, we have a su-
NATIONWIDE pervisory board within BPJS Kesehatan that is closely

following up on these ambitions as well as tracking the
advancements.
Thus, we currently have segmented action plans to tar-
get each different social group: private employees, govern-
Prof. DR. Dr. Fachmi Idris, M.Kes, president director
ment employees, self-employees, and the ‘poor’ segment. In
at BPJS Kesehatan (Security Administering Body for
addition, we are actively collaborating with other National
Health), explains the evolution of the Universal Health-
care coverage program of Indonesia (JKN-KIS), as Ministries such as Manpower and Planning in order to
well as the challenges in its implementation. enlarge the reach of our operations and accomplish the
registration targets established in JKN-KIS’s strategic plan.
HCLS: Dr. Fachmi, can you briefly introduce the The inclusion of all the segments is certainly a challenge
main activities and responsibilities of BPJS Kese- and we are fully aware that we need to attract and regis-
hatan? ter the non-poor segment in JKN-KIS in order to advance
FACHMI IDRIS (FI): BPJS Kesehatan was creat- towards the financial sustainability of the model since JKN-
ed in 2014 as a successor to the former Social Security KIS needs their premiums in order to be financially viable.
Institution of Indonesia (ASKES). The main purpose of
BPJS Kesehatan is the successful and sustainable imple- HCLS: On that point, one of the main debates of
mentation of the Universal Healthcare coverage program JKN’s implementation is its financial sustainability,
of Indonesia (JKN-KIS), which is expected to cover all na- which will be more challenging in 2019 when it is
tional citizens by 2019; today it already covers 70 percent expected to cover 260 million people. As president
of the national population. director of BPJS Kesehatan, what is your assessment
of this issue?
HCLS: Can you expand on the main focus areas FI: JKN-KIS is a new program for Indonesia and, con-
during the implementation of JKN? sequently, we are still fine-tuning the final scheme – the
FI: At the beginning, the main concern was the prepa- financial model is one of the points under debate. It is
ration of the national constitution and the overall regula- important to mention that the current premium scheme
tion structure that will support the development, imple-
mentation, and the sustainability of JKN-KIS.
BPJS Kesehatan is an instrument that fully serves the
successful realization of universal healthcare coverage in
Indonesia. Since our creation back in 2014, we have been
working on enlarging the number of citizens registered, the
quality of the health services provided, and the sustainability
of JKN-KIS moving forward. I am very proud of the results
obtained so far but there is still a long way to go.
HCLS: JKN-KIS is expected to cover the entire Indo- FACHMI IDRIS

nesian population by 2019. What is your action plan to
president director,
catch up with the remaining 30 percent before 2019? BPJS Kesehatan
FI: There are several public institutions involved in
JKN-KIS such as DJSN (National Social Security Council),
which designed and developed the strategic roadmap for
JKN-KIS. There are clearly defined sections within this

UNIVERSAL HEALTHCARE
is still below the actuarial that dictates the real cost of strong commitment of the government in providing, at
the healthcare service – which the government used as least, basic healthcare to the entire population.
a benchmark but did not fully implement in order to
enlarge healthcare access. Therefore, the financial deficit HCLS: What is the solution to this financial mis-
of JKN-KIS will continue to exist even if all Indonesians match?
pay the premium established according to their segment. FI: There are three different solutions that were as-
The JKN-KIS premium and the actuarial obviously vary sessed to drive JKN-KIS towards financial sustainability:
according to the social economic segment. In order to increasing premiums; reducing the pack of healthcare
ensure a better understanding of the current financial sit- services, and capital injection.
uation, let me expand on the economic numbers – premi- The first consideration was to increase the premiums
um versus actuarial - of two segments: the poor and the paid by society in order to minimize the economic gap
self-employed. between the premium and the actuarial. Nevertheless, this
Firstly, the established monthly premium for poor and measure will directly reduce access to healthcare services
near poor segment is Rp. 23,000 (USD 1.7) per capita versus since the financial capacity of a large part of the population
the actuarial calculation that is Rp. 36,000 (USD 2.7) - there cannot afford any increase in premiums. Consequently, this
is a gap of Rp. 13,000 (around USD 1). measure is not aligned with the constitutional objective of
Secondly, the established monthly premium for the covering all Indonesian citizens.
self-employed segment is sorted out into three different The second option would be to reduce the pack of health
healthcare service levels. In the third class, the established benefits covered by JKN-KIS in order to decrease the actu-
monthly premium is Rp. 25,500 (USD 1.9) per capita ver- arial cost. However, the current system is only covering
sus the actuarial calculation that is Rp. 53,000 (USD 3.9) basic care services, which are highly needed by the popula-
- there is a gap of Rp. 27.500 (around USD 2.00). In the sec- tion. Again, this way would not be ethically viable and not
ond class the established monthly premium is Rp. 51,000 aligned with our constitutional objective of covering basic
(USD 3.8) per capita versus the actuarial calculation that is healthcare needs.
Rp. 63,000 (USD 4.7) - there is a gap of Rp. 12,000 (around Thirdly, the government could inject more money into
USD 0.9). In the first class, it is the only segment where we JKN-KIS in order to finance its implementation, regardless
do not have any gap since actuarial exactly matches with the of the deficit. This is currently the chosen option by the
premium established. government and clearly shows the strong commitment of
The reason why the program continues, no matter the President Joko Widodo to deploying universal healthcare
fact that it is systematically designed to be in deficit, is the coverage in Indonesia.
JKN-KIS IS A NEW PROGRAM FOR INDONESIA

AND, CONSEQUENTLY, WE ARE STILL FINE-
TUNING THE FINAL SCHEME – THE FINANCIAL
MODEL IS ONE OF THE POINTS UNDER DEBATE


COVER STORY
In the Global League
INDONESIA
The Awakening Giant?
Not so long ago dismissed by international investors as
Asia’s “great underachiever”, Indonesia, complete with its
sprawling population of 260 million and blossoming middle
class, tends to elicit great enthusiasm and fanfare these
days. Nowhere is this truer than in the pharmaceuticals and
life sciences sectors. Valued at USD 5.5 billion, and regis-
tering an impressive seven percent annual growth, the local
pharma market stands out as being one of the best perform-
ing in the entire region.
Moreover, with a much acclaimed universal healthcare cov-

erage scheme inching towards completion and a singularly
unorthodox and vigorous president promising to trim Indo-
nesia’s negative investment list and return the economy to
heady seven percent growth rates through business-friendly
policies, many analysts are justifiably wondering whether
South East Asia’s ‘forgotten giant’ could finally be beginning
to awake from its long slumber.
At a first glance, the raw figures certainly do look pretty en-

ticing. “Indonesia ranks as a heavyweight market in its re-
gion, contributing one third of ASEAN’s total GDP, and is
developing rapidly… We’re talking about the fourth largest
population on the planet, expanding at a rate of about five
million people every year, a sustainable five percent GDP
growth rate, and a pharmaceutical market forecast to dou-
ble in size by 2020. What is there not to like?” asks Servier’s
managing director, Alban Nérot. “We simply cannot afford to
ignore such obvious potential and thus my primary objective
has to be to ensure that this is reflected within our corporate
ambitions and results,” he enthusiastically adds.

COVER STORY
Other actors, however, are proceeding rather more state expenditure on public health.
cautiously. “While it is true that an increase in dispos- “Prior to implementation, annual
able incomes has resulted in a surge of sales for beauty health insurance for the poor ran
and personal care products and in spite of there being to the tune of some IDR eight tril-
much clamour and hubbub about Indonesia breaking lion (USD 602 million). Nowadays
into the top ten global skincare markets by 2019, we this budget for the poor and nearly
still perceive complexities in the day-to-day dynamics poor, known as the ‘Contribution
of the local marketplace,” contemplates Holger Welters, Assistance Recipient,’ has shot up to DR. NILA
president director of the skincare specialist Beiersdorf, approximately IDR 25 trillion (USD MOELOEK
another prolific investor in the Indonesian life sciences 1.8 billion) and, in the parliament, minister of health
space. “It is clear to me that while the underlying poten- we are pushing hard for an even
tial certainly exists, this potential has not yet been con- greater allocation,” affirms Dede
verted into a reality,” he warns. “Thus, we have to be Yusuf, chairman of Commission IX,
highly selective when approaching this kind of oppor- the health and manpower commis-
tunity, keep our feet on the ground and set about eval- sion of the Indonesian parliament.
uating these forecasts carefully and pragmatically.” These developments, logically,
represent quite a game changer for
a pharmaceutical industry long
critical of anemic public spending
MAURA LINDA
GREAT EXPECTATIONS on healthcare. “Our clients have SITANGGANG
been much encouraged by the sheer director general of
Perhaps the single issue that has served to whip up opportunities generated by JKN: the pharmaceuticals and
medical devices,
investor confidence more than anything else has been market has overnight become con- ministry of health
the Joko Widodo administration’s ambitious reform siderably more attractive for them
of the country’s national health service. Indonesian and we are witnessing a surge in
healthcare has traditionally been notorious for its frag- investments, acquisitions and joint
mentation. However, in the fall of 2014, Indonesia’s ventures, all of which affords local
government surprised many by launching a radical ini- companies the prospect to acquire
tiative to establish a compulsory national health insur- technology and know-how hitherto
ance system with the aim of providing basic care for all out of reach. Taking all of this into
by 2019. Nila Moloek, Minister of Health, reaffirms “The account, our calculations now place
Indonesian government is committed to achieving its Indonesia’s pharma sector as grow-
PENNY LUKITO
goals in the health sector […] among other things, the ing at a rate of around seven percent
head, BPOM
JKN program, which has drawn in more than 175 mil- annually over the next four to five
lion people.” years,” recounts Wiwy Sasongko,
The scheme, known as ‘Jaminan Kesehatan Nasional’ managing director of QuintilesIMS.
or ‘JKN,’ primarily seeks to improve the livelihoods of Other commentators have been
citizens stuck in the middle – namely those too poor to quick to concur. “I know of one
afford health insurance, but deemed not poor enough medical device company whose
for state support. Under the provisions of JKN, all cit- products are registered on the gov-
izens would now be able to access a tranche of basic ernment’s reimbursement list that
health services provided by public facilities, and certain has registered a leap in their reve-
specially designated private ones too, covering treatment nues of 50 percent in the last year
AGUS
for everyday illnesses from chest infections to surgery alone,” confides AmCham manag- PRABOWO
and chronic diseases. ing director, Lin Neumann. “There chairman, National
Rolling out a grandiose welfare program on this scale is no doubt that this reform heralds Public Procurement
Agency (LKPP)
has logically gone hand in hand with considerably higher a very positive step for the industry

COVER STORY
The Only Certainty is Uncertainty!

Q&A with Milan Paleja, president director, CPO head & country president, Novartis
What is your strategy to successfu- nals in both public and private sectors about our inno-
lly navigate within a dynamic envi- vative products. Our goal is twofold: to make the right
ronment like Indonesia? medicines available and to enable the right healthcare
Our business expansion strategy is professionals to prescribe them, i.e. enhance the skills of
based on enhancing patient access doctors in Indonesia and bring innovative medicines to
in both public and private sectors, the country.
and providing Continuing Medical
Education (CME).
What are your key areas of focus in this pursuit?
MILAN PALEJA
—
We are focused on providing our in- Novartis is committed to improving and extending pa-
country novative and effective medicines to tient lives by providing patients with access to our inno-
president and more Indonesian patients, particu- vative medicines. When I was appointed to lead Novartis
general manager, larly in new therapeutic areas and for Indonesia, had four priorities.
Novartis Indonesia diseases that have a heavy socio-eco-
nomic burden such as Heart Failure. First, enhance our operational efficiency and motivate our
For the public market, we have 28 SKUs listed in the natio- team. Second, drive the growth of Novartis Indonesia by
nal formulary, available for all Indonesians who are covered increasing access to our products in both public and pri-
by the Indonesia’s National Health Insurance Program. vate sectors. Third, position Novartis as the government’s
partner in implementing the Universal Healthcare Cove-
On a parallel and complementary track, we run CME pro- rage Program or JKN. Fourth, diversify our product offe-
grams to inform doctors and other healthcare professio- rings to different therapeutic areas.
as a whole” agrees Chris Wren, executive director of the developing an integral solution that enables a treat-
British Chamber of Commerce, “multinationals right ment continuum between patients and doctors, and
now enjoy the largest share of the therapies being reim- JKN provides a proper opening for us to finally bring
bursed under the system and they are seeing the public that to market,” enthuses Suryo Suwignjo, president
sector outpace the private in terms of growth rate, which director of Philips.
is tremendous news when you consider Indonesia’s Siemens Healthineers’ country lead, Steven Lee, is
mammoth untapped market.” equally forthright. “This decisive boost to the purchas-
ing power of the public hospital apparatus marks a
golden opportunity for Siemens to deliver up new inno-
SEEING THE PUBLIC SECTOR OUTPACE vations and methodologies and to simultaneously fur-
THE PRIVATE IN TERMS OF GROWTH nish both private and public arenas with state of the art
RATE, WHICH IS TREMENDOUS NEWS solutions that can radically improve the patient expe-
WHEN YOU CONSIDER INDONESIA’S rience. It also fosters the right receiving environment
MAMMOTH UNTAPPED MARKET. for us to be able to extend beyond an essentially prod-
CHRIS WREN BRITISH CHAMBER OF COMMERCE uct-oriented approach towards a more holistic offer-
ing in which we can act as a true healthcare solutions
Medical device companies and healthcare solutions provider rather than merely a piece-by-piece equipment
technology integrators are especially enthusiastic about seller” he observes.
the additional spending power that the reform confers
upon hospitals. “The implementation of universal
healthcare coverage is, without a doubt, driving hospi-
tal demand for more efficient equipment and for more PLUNGING INTO THE RED
effective integrated care solutions, which represents
precisely the sort of space where we believe we have the Materializing JKN’s lofty ambitions, however, is prov-
most to offer… our overall healthcare strategy is about ing to be a formidable task for a national treasury

COVER STORY
already under increasing strain. “As What, then, is the solution to resolving this systemic
of today, JKN covers some 178.2 mil- financial mismatch? Three solutions have been mooted:
lion citizens which is roughly equiv- increased premiums, reducing the pack of healthcare ser-
alent to 70 percent of the national vices, or external capital injections. Increasing the premi-
population, but there remain big ums paid by society in order to minimize the econom-
question marks over how to render ic gap between the premium and the actuarial would,
the system financially sustainable however, compromise the principle of universal coverage
PARULIAN in 2019 when it is supposed to be because a large segment of the population simply can-
SIMANJUNTAK catering for 260 million,” admits not afford any increase. Similarly any reduction in the
executive director, Fachmi Idris, president director healthcare package would also leave patients untreated
IPMG
of Badan Penyelenggara Jaminan as the current system is presently only geared towards
Sosial Kesehatan (BPJS), the social covering basic care services, urgently required by the pop-
security agency charged with imple- ulation. So far, therefore, the Widodo administration,
mentation, “we are fully aware that ever attentive to courting popular opinion, has resort-
we will need to do much better in ed to option three: injecting whatever cash is needed to
attracting and registering the non- breach the gap, in the full knowledge that this cannot be
poor segment if we are to properly sustainable in the long run when coverage is mandated
balance the books and render the to expand yet further.
DARODJATUN program financially stable.” For Sigit Priohutomo, chairman of the National
SANUSI Indeed, at present, JKN is run- Social Security Council or ‘DJSN,’ the only feasible way
executive director, GP ning at a chronic deficit with state to square the circle will be to “establish a co-payment
Farmasi
coffers making up the shortfall.
Idris explains how this comes
about. “The established month-
ly premium for the poor and near
poor segment is Rp. 23,000 (USD
1.7) per capita versus the actual cost
that is about Rp. 36,000 (USD 2.7)
leaving the equivalent of a 1 dollar
gap to make up. Then for much of
DR. KUNTJORO
ADI PURJANTO the self-employed there is also an
chairman, PERSI overspend compared to the premi-
ums: tier two citizens, by socio-eco-
nomic profiling, have their month-
ly premiums set at Rp. 51,000 (USD
3.8) against the actuarial calcula-
tion that is Rp. 63,000 (USD 4.7)
meaning that it is really only the
tier one segment that pays a premi-
um that matches the real cost. The
brute reality is that financial deficit
DEDE YUSUF
would therefore continue to exist
chairman,
Commission IX
even under perfect conditions in
which each and every citizen pays
the premium established according
to his or her segment, all because of inherent flaws in
the structural design!” he laments.

COVER STORY
arrangement with private industry.” “Even though all

citizens and employees are obligated to join the system
by law, some companies have yet to register their staff, so
we need to work towards enforcing the rules,” he avows.
“As the Indonesian state clearly does not possess suffi-
cient resources to fulfill the national healthcare objective,
public and private partnerships (PPPs) would seem to be
SIGIT FACHMI IDRIS HASBULLAH
obvious pathway forward by leveraging private capital PRIOHUTOMO THABRANY
and resources to the purpose of enlarging government president director,
chairman, Center for Social
chairman, National BPJS Kesehatan
reach,” concedes Philips’ Suryo Suwignjo. Social Security Council Security Studies of the
University of Indonesia
(DJSN)
“We’ve noted that the JKN is struggling in three fun- (CSSUI)
damental areas: infrastructure overload, budget deficit,
and implementation,” reveals QuintilesIMS’ Sasongko. has only five million inhabitants to Indonesia’s 250 mil-
“The state is going to have to take a deeper look into lion!” he exclaims.
how they are spending the money, how much reaches the Many key opinion leaders agree with this stark assess-
patient in the end and how they can generate a bigger ment. “People appear to forget that the universal health-
bang for their buck. Then, on top of all of that, there are care program is not only about providing coverage to
going to be some basic structural issues that will need everyone, but also about ensuring a certain level of
to be surmounted. For instance, the ratio of hospitals quality in health provision delivered at the right time
and doctors per citizen in Indonesia is clearly too low to ensure that there are no catastrophic out of pocket
and unfit for purpose. Right now, Indonesia possesses a expenses in the event of requiring extensive medical
comparable number of oncologists to Singapore, which
TOP 15 PHARMA COMPANIES IN INDONESIA

RANKING BASED ON RX + OTC SALES (2016)
#1 KALBE FARMA
#2 SANBE # 9 SOHO
10 NOVELL PHARM
#3
#
DEXA MEDICA
PHAROS 11 BIOFARMA
#4 INDONESIA
#
TEMPO SCAN # 12 DARYA VARIA

# 5 PACIFIC
# 6 KIMIA FARMA # 13 KONIMEX
# 7 FAHRENHEIT # 14 MERCK INDONESIA
# 8 SANOFI-AVENTIS # 15 HEXPHARM JAYA

COVER STORY
attention; thus it is essential to get a grip on the finan-

cial sustainability of the program and start embracing INDONESIA POSSESSES A
pharmaco-economics in order to align financial restric- COMPARABLE NUMBER OF
tions with national health goals,” argues Dr. Hasbullah
Thabrany, chairman at the Center for Social Security
ONCOLOGISTS TO SINGAPORE,
Studies of the University of Indonesia (CSSUI) and a WHICH HAS ONLY FIVE
senior health care financing consultant to the National MILLION INHABITANTS TO
Social Security Council of Indonesia. INDONESIA’S 250 MILLION!
“Already we are noticing a strong shift towards cost WIWY SASONGKO QUINTILESIMS
containment with regards to the procurement of medi-
cines within the program and a clear preference for use be deployed to ascertain the added value of latest-gener-
of cheap, non-branded generics which will ultimately ation innovations.
pose a challenge for multinationals whose prices tend to Shifts to the procurement system have, indeed, already
be set higher than the local ones,” acknowledges Parulian been enacted in a bid to take costs out of the system.
Simanjuntak, executive director of the International “Formerly, when the procurement system was still fully
Pharmaceutical Manufacturers Group (IPMG). He has, based on tenders, the process was supply-oriented but, by
therefore, been lobbying policymakers to understand implementing an e-catalogue, we have managed to shift
that merely focusing on the cheapest therapies is not the paradigm so it is demand driven,” points out Agus
necessarily the most cost-effective way in the long run Prabowo, chairman of the Public Procurement Agency
and that Health Technology Assessment (HTA) should (LKPP). Disruptive technologies such as ‘Halodoc,’ a

COVER STORY
novel mobile healthcare application promoted by the medical devices at the Ministry
Mensa Group, are also being trialed as cost savings meas- of Health. “We see our mission
ures. “Halodoc’s purpose is to drive healthcare demand as providing support to an infant
towards different cheaper channels, so that rather than industry in its transition from a
visiting a doctor for a simple headache, a short telecon- trading to a research-based logic
sultation might instead suffice,” says Jonathan Sudharta, by the horizon of 2025, by which
member of the Board of Directors at Mensa Group. time it should be able to stand
In view of the scheme’s unsteady economic outlook, firmly on its own two feet,” she STEVEN LEE
some of the more wary pharmaceutical actors have been elaborates. country lead,
Siemens Healthineers
adopting a ‘wait-and-see’ posture. “To date we, have been “We are collaborating closely
hesitant to create any significant dependency on JKN with the government to increase
until we can gain greater clarity on pricing rules and the power of indigenous phar-
timeframes for payment,” confides Servier’s Alban Nérot. maceutical firms and have set a
“Although JKN could potentially represent a decent mid- target of increasing the exports
term opportunity for us, it could equally instead adverse- of local players to 30 percent of
ly impact the P&L of multinational innovative drug production capacity. Meanwhile
developers, by favoring locally sourced generics…and we are pulling out all the stops
with the ongoing uncertainty surrounding its financial to promote Indonesian self-suf-
SURYO
viability we prefer to exercise prudence and stick with the ficiency of raw materials such as SUWIGNJO
tried and tested private market for the time being.” active pharmaceutical ingredi-
president director,
ents,” attests Darodjatun Sanusi, Philips
CREEPING PROTECTIONISM
Meanwhile, there are a handful of market distortions

that threaten to take some of the shine off the ini-
tial jubilance over the JKN displayed by many inter-
national company contemplating market entry. First
and foremost, has been successive Indonesian govern-
ments’ longstanding dalliance with nationalism and
protectionist measures.
The Widodo administration remains true to the ste-
reotype on this count with a special division having
been set up within the Ministry of Health explicitly
dedicated towards cultivating a local pharma manu-
facturing industry, import-substitution industrializa-
tion and a spirit of self reliance. “We have formulated a
15-year roadmap to transform the local pharma indus-
try into an innovative, homegrown player. In the first
five years the emphasis will be squarely upon coopera-
tion and technology transfer. The second five years will
be devoted to technological acquisition and develop-
ment and then the final five years should see the launch
of locally manufactured products by mastering their
own innovative technologies,” declares Maura Linda
Sitanggang, director general of pharmaceuticals and

COVER STORY
executive director of GP Farmasi, the National Association of Local

Companies in Indonesia.
Of even more concern to multinational drug developers, recent pro-
posals for stiffer local content requirements include the adoption of a
revised patent law, which suggests that patent holders will lose exclusiv-
ity within five years if they do not locally manufacture the object of their
patent. “While we are all sympathetic to the Indonesian governments CHRISTIAN
WIWY SASONGKO
desire to create its own cluster industries, there can be absolutely no EBERLE
managing director,
QuintilesIMS doubt that the international investor community would much rather president director, APL
Forging a Powerful Indigenous Manufacturing Base

High up on the populist agenda coverage. We have recently built up a new cutting-edge
of the Widodo administration is a manufacturing plant in Bandung, in West Java, that has
staunch commitment to developing tripled our manufacturing capabilities and our API fabri-
Indonesia’s own localized industrial cation capabilities will simultaneously be backing up the
bases for strategic sectors such as government in achieving financial sustainability within the
pharmaceuticals. “We are concer- JKN scheme, as it will drastically lower the costs of pro-
ned that a full 95 percent of the duction,” he elaborates.
active pharmaceutical ingredients
(APIs) that our nation presently con- “We have definitely witnessed some positive advance-
HONESTI sumes are, in fact, imported from ments during the last couple of years with the coming
BASYIR countries such as India and China into play of initiatives like that of Kimia Farma, but there
— and have thus made it our goal to is still quite a way to go before Indonesia realizes its full
president reduce this dependency through in-country potential,” notes Herny Prasetya, president of
director, PT shrewd regulation and incentives to the International Society of Pharmaceutical Engineering
Kimia Farma encourage our very own indigenous (ISPE). “We calculate that the cost of manufacturing is still
(Persero) Tbk
pharma industry to integrate verti- rather high, especially when it comes to producing APIs
cally,” confirms Minister of Industry, from scratch so many local outfits will need to do more
Airlangga Hartarto. to transition towards continuous production and identify
ways to optimize their operational efficiency ratios.”
One company that has been espe-
cially receptive to this clarion call Basyir is confident, however, that Indonesia can, in time,
has been Kimia Farma, the top per- turn around the traditional image of being a recipient
former on the local market in 2016, country and actually start building homegrown quality
according to QuintilesIMS statistics. brands that are respected abroad. “70 percent of the
“Consciously aligned with the go- production coming our API manufacturing will eventually
vernment’s objective of reducing target overseas markets including mature economies such
AIRLANGGA
the disproportionate dependence as Korea, Japan and Europe,” he enthuses.
HARTARTO
—
of Indonesia on API imports, we
minister of have been constructing the first SOURCES OF APIs
industry real API manufacturing plant in the
95% OF APIs HAVE TO BE IMPORTED FROM ABROAD
country which is expected to attain
completion by mid-2018,” proudly
affirms Honesti Basyir, president director of the company.
EUROPE CHINA 919 INDIA
“Today our pharmaceutical manufacturing unit consti-
tutes the main contributor to our profit and loss (P&L),
representing some 34.25 percent of our revenues and 459
growing more than 30 percent last year,” explains Bas- 153
yir. “Our short-term strategy is going to focus on stren-
gthening our position in the pharmaceutical manufactu-
ring division so as to be able to cope with the projected (million usd)
growing demand coming from universal health insurance Source: Ministry of Trade

COVER STORY
see an incentive-based structure rather than the arbi-

trary cracking of the regulatory whip which is sure to IT’S IMPORTANT TO CONSIDER THAT
wreak havoc with their business strategies,” points out
INDONESIA CONSTITUTES THE WORLD’S
AmCham’s Lin Neumann.
LARGEST ARCHIPELAGO COMPOSED
OF MORE THAN 17,000 DISPARATE,
DIVERSE AND IN SOME CASES POORLY
MARKET DISTORTIONS CONNECTED ISLANDS AND, THEREFORE,
ENTAILS SIGNIFICANT DISTRIBUTION
Beyond needing to align with evermore-stringent local AND PATIENT ACCESS BARRIERS.
content regulations, many new market entrants also DR. KUNTJORO ADI PURJANTO PERSI
report finding themselves having to contend with a myr-
iad of local idiosyncrasies that hamper their efforts to poorly connected islands and, therefore, entails signifi-
establish a smooth-running business. “Indonesia’s drug cant distribution and patient access barriers. Even once
registration timeframe, for instance, stands as one of the you’ve secured all the requisite approvals, physically get-
slowest in the region and, consequently, products are not ting your product to the intended market place can be
introduced in the country as fast as they should be to an expensive, time-consuming and logistically tricky
the extent that medical tourism is starting to become a business,” warns PERSI’s chairman, Dr. Kuntjoro Adi
concern with affluent Indonesians instead opting to be Purjanto.
treated abroad in countries such as Thailand, Malaysia or A World Economic Forum survey recently ranked
Display Ads_1:4 Focus Reports.pdf 1 7/11/17 9:07 PM
Singapore where they can more easily access latest-gener- Indonesia’s infrastructure 82nd in the world—behind
ation, innovative treatments,” warns Simanjuntak.
At the same time, many international drug developers
have noticed an erosion of in-country profit margins as
a result of a proliferation of coun-
terfeit medicines. The National
Association of Hospitals (PERSI),
for example, estimates that unregis-
tered drugs represented as much as
10 percent of the total Indonesian
pharmaceutical value in 2016, while C
the Indonesian Food and Drugs M
BENOIT Supervisory Agency (BPOM) man- Y

MARTINEAU
aged to seize more than a thousand CM
president director,
Sanofi packets of counterfeit medicines MY
worth USD 4.2 million in 32 prov-

CY
inces within the space of only a

CMY
week during the same year.
Meanwhile many new entrants K
severely underestimate the loss-

es incurred from navigating the
country’s patchy infrastructure and
logistical complexities. “It’s impor-
MADA SHINTA
tant to consider that Indonesia con-
DEWI stitutes the world’s largest archipel-
country manager, ago composed of more than 17,000
Mundipharma
disparate, diverse and in some cases

COVER STORY
Thailand, Mexico and Egypt, among of intent,” reassures idsMED’s pres- the South East
other places—and just barely ahead ident (core market) and senior man- Asian theatre
of India and Tajikistan. Meanwhile, aging director for Indonesia, Rufi of operations.
the number of days containers spend Susanto. This is the type
between unloading and leaving the of market where
gates of Jakarta’s port, which han- more than 70
dles the bulk of Indonesia’s inter- percent of the
national trade, is currently at an all- WINNING STRATAGEMS pharmaceuti- ALBAN NÉROT
time high of six days. cal value is vest- managing director,
“ There’s no denying that What, then, are the secrets to mak- ed in the hands Servier
Indonesia has always been very chal- ing a success out of Indonesia’s of local players
lenging in terms of regulatory and high-risk, high-reward busi- and you have
structural issues; it has not wrong- ness environment? For Benoit to be quick on your toes… being
ly earned the reputation of being Martineau, president director of able to anticipating future dynam-
an unpredictable business environ- Sanofi, flexibility and adaptabil- ics in a fast-changing, fluid envi-
ment with certain lack of trans- ity are two useful assets. “Despite ronment and react rapidly is highly
parency, but those issues are now our positioning as the number one advantageous.”
gradually being resolved and the MNC in the country, I would say Being able to spot emerging
commitment to universal healthcare that Indonesia still represents one trends and being a first mover in
is certainly a very strong statement of the most challenging markets in aligning to them has certainly

COVER STORY
proved lucrative for many actors. GSK, for its part, is betting
Mindful of Indonesia’s rapid eco- on adapting to a transforma-
nomic development, Siemens tion underway with Indonesia’s
has been astutely re-orientating epidemiological profile and the
its offering to cater to the needs explosive rise of chronic, life-
of a brand new middle class in style, developed-world style dis-
the ascendancy. “We have been eases. “While we recognise we
HOLGER increasingly pivoting towards are entering a period in which RUFI SUSANTO
WELTERS the middle and upper-middle the public market is going to president (core
president director, class private market,” expounds be the primary growth driver of market) and senior
Beiersdorf managing director,
Siemens Healthineers’ Steven Lee. the Indonesian industry, courte- IDS Medical Systems
“Our intention is to retain those sy of the rollout of JKN, we are
patients that are undergoing treatment abroad by forecasting that much of this
offering them higher standards in technology and growth projection is going to be accounted for by
innovation back home in Indonesian hospitals. The non-branded generics especially given the financial
industry as well as the government are endeavouring pressures afflicting the BPJS. Instead our attention
to reverse this patient outflow and we detect a real will be directed towards the non-communicable dis-
effort on the part of all parties to enhance standards ease segment – comprising cardiovascular, diabetes
of service quality so that is one specific niche that we and oncology - where our core competencies around
have selected to scope in on.” innovative medicine are known to be most effective,”

COVER STORY
reasons Omar Luqmaan Harris, the company’s pres-

Leading the Charge Against NCDs ident director.
Beiersdorf, which currently exhibits one of the
As Indonesia’s middle class highest growth rates in the skincare category, mean-
mushrooms, the demography while puts its own success firmly down to a triple
of disease has undergone a
combination of sustained investment, speciality
sharp transformation with a
steep reduction in incidence focus upon a core competency and the ability to
of infectious diseases, but at drum up new levels of demand where previously lit-
the same time, an alarming tle existed. “Providing education about the benefits
increase in non-transmissi- of our products has been absolutely crucial in this
ble, chronic, so-called lifestyle
market to enhance the penetration of our brands,”
ASHISH PAL disease including diabetes,
— cancer, respiratory conditions confesses Holger Welters. “Though we encountered a
president and cardiovascular disorders. pre-existing market of sorts, we found ourselves hav-
director, MSD
Long considered maladies of ing to further develop and stimulate the customer
affluent urban populations in need by communicating the importance of skincare,
mature, developed econo-
and raising awareness over the dangers of its negli-
mies, these non-communicable diseases have been
spreading silently and, in many cases, largely un- gence. For instance, the concept of sun care tends
checked to the point where they are now becoming to be well ingrained in peoples’ minds in developed
a significant burden on social welfare and economic western markets, where people are highly conscious
growth. Fortunately international drug developers of the risks of skin cancer, but tends to be lacking
such as MSD are now engaging vigorously with the
somewhat in underdeveloped, emerging markets like
local market in a bid to turn the situation around.
this. We are proud to have already attained a lead
“MSD in Indonesia has been on an exciting transfor- position in therapies for injured skin through our
mational journey…our local portfolio today is speci- product Hansaplast®, which demonstrates that this
fically tailored to address growing chronic diseases strategy is working,” he notes.
such as diabetes and cancer,” declares the com-
pany’s president director, Ashish D. Pal. Indeed, with
the International Diabetes Federation recently esti-
mating that there are more than 10 million people
living with diabetes in Indonesia, some 90 percent of INDONESIA STILL REPRESENTS ONE
whom are believed to be suffering from the Type-2 OF THE MOST CHALLENGING
version, the company has won acclaim for bringing
in an innovative therapy combining Sitagliptin and
MARKETS IN THE SOUTH EAST ASIAN
extended-release Metformin, which helps patients THEATRE OF OPERATIONS. THIS
to effectively lower blood sugar and avoid serious IS THE TYPE OF MARKET WHERE
complications.
MORE THAN 70 PERCENTOF THE
So too has the company been at the forefront of PHARMACEUTICAL VALUE IS VESTED
efforts to combat cancer. “Aware that lung cancer IN THE HANDS OF LOCAL PLAYERS
constitutes the leading cause of cancer morbidity
in Indonesia with over 20,000 deaths annually – the BENOIT MARTINEAU SANOFI
highest in Southeast Asia – we were very proud to
receive approval for Pembrolizumab, the first ever Mundipharma, a global leader in pain management,
immunotherapeutic agent for non-small cell lung
cancer to enter the market,” he exclaims. At the narrates a not entirely dissimilar story of having to
same time the company has been collaborating clo- draw attention to a very real unmet need in the mar-
sely with the Ministry of Health to roll out its Human ket, but one that had not always been understood as
Papillomavirus (HPV) vaccine program. “The stark such locally. “We discovered that the penetration of
reality is that 26 women in Indonesia are dying each pain management treatment was disproportionately
day from cervical cancer, so we are doing what we
can to arrest this development,” he sighs. low in Indonesia due to a confluence of cultural, reg-
ulatory and educational factors,” reveals Mada Shinta

COVER STORY
Dewi, the company’s country man- in the country. Having opened its
ager. “Firstly, Asians, in general, local affiliate less than five years
do not tend to complain so much ago the company registered 65
about pain, because in their cul- percent growth last year and now
tures it is perceived as impolite to boasts an in-country staff of over
be making a fuss. Secondly, opi- 100 employees. “It’s a long jour-
oid medicines are highly restrict- ney that needs to be supported
ed on the local market. Thirdly, by a lengthy repertoire of medical DJONNY HARTONO AGUS DARJONO
there has barely any education of education initiatives in collabora- president director, president director,
pain management in the medical tion with the medical associations, Enseval Metro Drug Indonesia
universities… We have therefore pharmacies and hospitals. The
made it our business to develop results so far are very encouraging,
this arena and spread understand- but there is still a long way to go,” “We ascertained exactly what the
ing about the dynamics of pain concludes Dewi. local market and local clients
and its alleviation,” she explains. Indeed one overriding hallmark required and remodeled our offer-
Right now, Mundipharma is con- of successful ventures in Indonesia ing to match accordingly. Doing
centrating its efforts on applying tends to be that they engage with business in this very young, raw
pain management knowledge in the marketplace on its own terms market is a world away from the
the treatment of cancer patients, instead of trying to transplant a much more static Malaysian eco-
one of the primary causes of death business model devised elsewhere. system or a highly developed and
h
We rethink life and science

alt
He
to understand health.
en’s
It is time to change the rules.

Wom
D e n t a l H e a lt
h c ar
e
Exeltis Indonesia
PT. Nufarindo
Kirana Two Office Tower
7th Floor Unit E
Jl. Boulevard Timur Kav 88
Kelapa Gading, Indonesia 14240
Phone: +62 21 2962 9755
M
de
o
rn
Plant Wo
Jl. Raya Mangkang Kulon, KM 16,5
u nd
Care
Kec. Tugu, Semarang, Indonesia 50155
www.exeltis.co.id

COVER STORY
rigidly structured marketplace the appropriate supply of pharmaceuticals, medical

like Singapore. The demand in devices and equipment to ensure that the appropriate
Indonesia right now is not neces- healthcare demand can be met on all levels.”
sarily for the most high-tech prod- Conscious that, while digital disruption and mobile
ucts, but those that fully serve health can represent important breakthroughs in
their purpose with an affordable any emerging economy, the potential is amplified in
price,” explains idsMED’s Susanto. the fragmented geography of Indonesia, Enseval has
JORGE WAGNER been investing heavily in modernizing and upgrading
director, Boehringer its processes. “In the sales and distribution side, we
Ingelheim have already introduced our ‘Enseval network order
THE QUEST FOR PARTNERS system’ that eases our client commands through web
and mobile applications without any geographic and
Enlisting the support of local entities to assist with time restrictions.
commercialization can also offer considerable advan- Meanwhile, Anugerah Pharmindo Lestari (APL) plays
tages to multinationals as they set about trying to a significant role in assisting drugs companies and
navigate the Indonesian market’s highly complex healthcare providers alike with the distribution and
contextual environment. One such outfit, Metro Drug logistics part of the value chain. “While JKN represents a
Indonesia (MDI), has positioned itself as a partner of great step forward for the Indonesian people, its imple-
choice within the ‘commercial sales organization are- mentation does pose new challenges in the activities of
na,’ under which its clients maintain their business administration and collection management so APL has
license and distribution activities, but outsource the
task of fostering demand for their products. “Though
we also offer full-agency end-to-end solutions, we
identified considerable demand on the part of the
MNCs for a local mentor with expertise in market-
ing value-added services that overcome the inherent To become the most preferred
challenges of the market,” recalls president director, partner in healthcare industry
Agus Darjono. “Clients predominantly demand our in Indonesia In-Licensing
marketing insights as well as commercial actions that Long term
Partnership
will create demand for their products through strong-
er penetration rates in different channels like clinics, CSO
hospitals, and other healthcare institutions. MDI’s Contract Sales
Organization
network with key customers and opinion leaders is
one of our fundamental operational underpinnings
since they ensure the accurateness of our commercial
insights and ultimately, the success of our demand
creation initiatives,” he elaborates. CSMO
Contract Sales &
Indonesia’s single largest distributor, Enseval, has Marketing
also been noticing the impact of the implementation Organization
of JKN. “Geographically we have seen an increasing AGENCY REGULATORY
demand for our services in more remote provinces like Full Brand SERVICES
Mangement
Kalimantan, Sulawesi and Papua,” observes president
director, Djonny Hartono, “and also registering rising
demand according to socio-economic strata. The poor PT Metro Drug Indonesia
Menara Jamsostek, 22nd fl., Jl. Jend. Gatot Subroto No. 38,Jakarta
are discovering their right to healthcare while a grow- 12710 - INDONESIA
Phone: +62 21 522 8338 | Fax: +62 21 522 8337
ing middle class is seeking higher-quality treatment. www.metrodrug.id
The task at hand for a distributor like us is to ensure

COVER STORY
been taking a proactive stance to streamline these pro- “Yes, compared to other markets, innovative medi-
cesses through optimized cold chain management, a cine remains poorly represented on the national phar-
consolidation of our national distribution centers and maceutical agenda, so there is a massive amount still to
the integration of latest digital technologies,” confirms do, yet it is precisely because of this that Indonesia con-
APL’s president director Christian Eberle. stitutes a market where we can make a big difference
At the same time, APL has also been experiencing and where a company like ours, so long as it perseveres
a significant upswing in demand for its commercial- and conducts itself smartly, can reap real rewards,” he
ization and marketing services. “We deploy a unique concludes.
market insight and benchmarking tool, which gives cli-
ents strategic and tactical information to support their
decision-making. Through our insider understanding Kimia Pharma: Leading The Way
of the rapidly evolving regulatory environment and
our extensive business intelligence capabilities, we are Indonesia is the largest economy in the ASEAN region
uniquely positioned to execute an effective sales, brand with over five percent annual GDP growth in recent
years and is expected to break into the world’s top
development, channel management and marketing
ten economies by 2030. The Indonesian pharmaceuti-
strategy,” proclaims Eberle. cal industry, with a current value of USD 5.6 billion, is
expected to grow around seven percent annually and
more than double its size by 2020. This growth is led
by local players which make up nine of the country’s
top ten companies, account for more than 70 percent
THERE FOR THE TAKING
of the industry’s value and around 95 percent of its
volume.
What, then, to make of a market that seems to promise
so much, yet simultaneously poses such glaring draw- One significant driver of this growth is the rollout
backs? While it remains a complicated place for doing of Indonesia’s Universal Healthcare Program (JKN),
which aims to cover all of the country’s 250 million
business for the uninitiated, there can be no doubt that inhabitants by 2019. The government has adopted a
those companies that have cracked the market are gen- cost-driven approach when selecting which healthca-
erating good returns. re solutions to list in JKN; a move which has positively
Boehringer Ingelheim is perhaps a good illustration impacted domestic companies since they can offer
of this point. The company has been staunchly and more cost attractive solutions than their MNC peers,
which are more focused on innovative, and therefore
resolutely believing in the potential of the archipelago costly, drugs.
since the 1960s, even acquiring a manufacturing plant
in the early 2000s and continuing to invest heavily in One example of a local company benefiting from the
developing its local footprint. This perseverance has, government’s cost-conscious approach is Kimia Far-
indeed, been paying off and the company now finds ma, positioned as the industry top performer in 2016
and the leading Indonesian pharmaceutical SOE (Sta-
itself one of the fastest-growing players within the top te Owned Enterprise). Honesti Basyir, president di-
20 for the second year in succession. rector of the company, highlights that “JKN has been
“Indonesia remains a tricky market for MNCs one of our main growth drivers, representing 60 per-
because local players still dominate some 70 percent cent of our sales. Indeed, as the largest pharmaceuti-
of the pharmaceutical value and the pressures on the cal SOE we have the duty to support our government
in this journey. In terms of manufacturing, one of the
public purse are clear for all to see…Nevertheless, when main reasons we built our new manufacturing plant
you peer deeper into how the industry is organized, it in Bandung is to be able to cope with the growing
becomes clear that the local players are actually dom- demand coming from JKN.” To maintain this growth,
inating the OTC segment, whereas the prescription Basyir points to the fact that his company is “impro-
market is much more finely balanced with 45 percent of ving our operations; moving towards digitalization
both in back-end and front-end processes that not
the branded prescription medicines value in the hands only enhance product quality but also improve overall
of MNCs,” assesses Jorge Wagner president director of efficiency.”
Boehringer Ingelheim.

MANUFACTURING AND WOMEN’S HEALTH
Aylie Widjaja, Exeltis Indonesia
A PARTNER
FOR LIFE
Aylie Widjaja, managing director at Exeltis Indonesia,
shares her excitement about developing the compa-
ny’s footprint in Indonesia, making it a manufacturing
hub for Asia, highlights the challenges in navigating
the public market, and discusses the company’s sig-
nificant offering in the women’s health field.
Aylie Widjaja At the same time, the pharma industry is under

immense cost pressure under JKN, negotiating
EXELTIS with public institutions like the Social Security
Administering Body for Health (BPJS) and the National
Public Procurement Agency (LKPP).
In addition, this cost containment environment is
HCLS: How do you see the Indonesian healthcare even more challenging for MNCs since they have to
landscape evolving? compete with local industry, which due to the nature
AYLIE WIDJAJA (AW): We are really pleased that of their products as well as their domestic capabilities
things are moving towards the right direction with the are able to offer cheaper prices.
implementation of universal healthcare coverage and In a nutshell, the government has to focus on enhanc-
the advancements the government has made in this re- ing the country’s competitiveness to reduce manu-
gard. I believe that the industry in general and Exeltis facturing costs, which will benefit both industry and
in particular can play a key role in its implementation. government in terms of less profit pressures and the
I am equally pleased with how the private market is financial sustainability of JKN.
developing, which is certainly more developed than the
public market. Further, Indonesia’s private market is HCLS: Exeltis entered Indonesia when it acquired
more advanced compared to China for example. PT Nufarindo in December 2012. How has the com-
pany evolved since then?
HCLS: What do you believe should be the main AW: Initially, we were very much focused on due dil-
healthcare priorities of the country? igence. There were significant differences in terms of
AW: Even though the market is developing, there are national versus international manufacturing and reg-
several challenges, especially in the public market. The ulatory standards.
government has the vision of becoming self-sufficient Part of this was due to the fact that the Indonesian
in terms of catering to the medical needs of the popula- National Agency of Drug and Food Control (BPOM)
tion. However, the cost of manufacturing pharmaceu- has enforced higher standards than before. Therefore,
ticals in Indonesia is still more expensive than in other a lot of medicines that were in the market at that time
countries in the region, such as China and India for did not comply with current regulatory requirements.
example. This is mainly due to the fact that Indonesia Despite having been challenged, we managed to
currently imports 95 percent of its APIs. However, the reformulate our drugs and we are positively advancing
government is very conscious about this circumstance to this end. At the same time, we are looking at Exeltis
and is putting efforts in place to reduce such depend- Group to find other great products from corporate that
ence on imports through fostering FDI and NDI. can perfectly fit the Indonesian market.

MANUFACTURING AND WOMEN’S HEALTH
Aylie Widjaja, Exeltis Indonesia
my job to successfully identify and select the most pro-

spective areas in which to invest.
Internally, we have to continue to rethink our prod-
uct portfolio, find those products that perfectly fit here.
Externally, we are identifying the limitations as well as
needs in the country, and thus select those solutions that
can fill the existing gaps in Indonesia.
HCLS: How do you ensure that your portfolio is

best suited for the local needs?
AW: We work with a combination of data and direct
ground contact with physicians and patients. We are very
active in these kinds of activities since they result in the
best possible insights. Understanding the market is really
To sum up, we are just starting to consolidate our important, knowing its limitations and dynamism, espe-
footprint in Indonesia. We have to give better options to cially in emerging markets, to shape your product offering.
patients to have more affordable and quality medicines As we are still in the inception stage of our operations
through creating domestic manufacturing capabilities in Indonesia, we are now focused on female healthcare.
in the country and offer differentiated products. As such, women’s health is positively developing in
Indonesia but obviously; there is still a long way to go.
HCLS: In order to enlarge its footprint in the Currently, we only have oral contraceptives in Indonesia
country, Exeltis recently invested in a new plant but we have many different products that target every
dedicated to the production of hormone products. stage of the female life cycle. My objective is to position
Could you expand on the manufacturing strategy of Exeltis as a partner for women during their life journey.
Exeltis in Indonesia? Ultimately however, we also want to make a name for
AW: When we acquired PT Nufarindo we started to el- ourselves in metabolism and oncology by introducing
evate our manufacturing standards. A lot of things have certain biosimilar products that are developed at the cor-
been done in this regard and I am very pleased that we porate level.
have already reached GMP standards, with guidance and
support from BPOM.
We have already built our hormone manufacturing MY OBJECTIVE IS TO POSITION
facility, which we want to position as a hub to serve not EXELTIS AS A PARTNER FOR WOMEN
only Indonesia but also all Asian markets. Our ambition
is to get there in between five to ten years.
DURING THEIR LIFE JOURNEY.
We are currently in the first phase, which consists of HCLS: What actions are you putting in place in or-
primary packaging. Our next investment will be allocat- der to develop women’s health in Indonesia?
ed to develop our end-to-end hormone manufacturing AW: We participate in several medical education activi-
capabilities. Additionally, we are continuously investing ties such as symposiums and workshops in which we tar-
in upgrading our existing manufacturing facilities to get doctors as well as midwives, where we introduce our
improve efficiency. offering to them. In this sense, we are strongly engaged
with gynecology associations. We are approaching all lev-
HCLS: How important is the Indonesian affiliate els of healthcare professionals.
within the Asia context? In addition, we are now starting to develop some edu-
AW: We are the largest affiliate of Exeltis in Asia and cation initiatives more directly targeted at patients. We
we expect to drastically increase our size in the future. are working with digital platforms to find new ways to
Aligned with that, our corporate management is strong- have more direct contact with patients around disease
ly supporting the development of our operations. It is awareness.

MEDTECH
Market Opportunities
ROOM FOR innovations to the Indonesian market”. Nonetheless,

challenges persists as “Having your products listed
GROWTH within the nationwide government e-catalogue pro-

curement method, which is providing a solid frame
for healthcare businesses in the country, does not
automatically guarantee good market access due
to multiple factors: the large population, the archi-
pelago geography, and the shortages in infrastruc-
ture.” To counteract these challenges, Lee highlights
The Indonesian medical technology market has seen
impressive growth in recent years, boosted by the im-
Siemens’ “after-sales services as well as our constant
plementation of universal healthcare, and still holds effort to find the right partners to collaborate with
numerous opportunities in terms of connecting rural in reaching the remotest areas in the country. These
communities via digital technologies and recapturing are what give us the customer proximity needed to
wealthier patients who might previously have looked approach the market.”
abroad for treatment. Suryo Suwignjo, country director at Philips, points
G
out that “Indonesia by itself has more than 17,000
lobally speaking, the Indonesian islands with scarce healthcare infrastructure and pro-
medtech market is quite underdevel- fessionals; consequently, patient access is one of the
oped and highly reliant on imports. most important challenges to tackle. Therefore, tech-
Nevertheless, the market has expe- nologies such as digitalization and telehealth can cre-
rienced promising growth rates of ate important healthcare breakthroughs in Indonesia”.
approximately 15 percent on an annual basis dur- However, GE Healthcare’s Izmee notes that “even
ing the last decade and it is expected to reach USD 1 though the government is really interested in intro-
billion in value by 2020. This growth has been mir- ducing telemedicine - as it would help the country to
rored at GE Healthcare, where country director Haris overcome national healthcare burdens - there are some
Izmee explains that “we have been growing at a dou-
ble-digit rate over recent years and we expect to per-
INDONESIA MEDICAL DEVICE SECTOR
form above the market average in the next five years”.
MARKET SHARE
As with the rest of the Indonesian healthcare sec-
tor, medtech’s promising performance is being driv- USD1 BN MED TECH MARKET BY 2018
en mainly by the implementation of the Indonesian
Universal Healthcare Program (Jaminan Kesehatan
Nasional - JKN), which is boosting demand from
both public and private hospitals. GE Healthcare’s
Izmee elucidates that “JKN has also impacted our
private segment since more than 50 percent of the DENTAL PRODUCTS
hospitals in Indonesia are private and the govern- ORTHOPEDIC IMPLANTS

ment needs their support to successfully implement 2%
AUXILIARY EQUIPMENT
JKN. Consequently, more and more private hospitals 6%
are getting their infrastructure ready to cope with the 6% CONSUMABLES
increasing demand coming from JKN patients.” 24%

OTHERS
Steven Lee, country lead at Siemens Healthineers 31%
DIAGNOSTIC
Indonesia, supports Izmee’s comments and points 35% IMAGING
out that “the government has increased healthcare
expenditure, which has boosted the buying pow- 13% ANNUAL MARKET GROWTH
er of public and private hospitals. This trend is an
opportunity for Siemens Healthineers to bring more Source: GGM Industrial Techonology Research Institute

MEDTECH
Market Opportunities
inherent barriers to its implemen- this type of hospital because they classes. Indonesia is the largest
tation such as medical education have higher capacity levels and a source of medical tourism in the
and regulation.” higher quality level of healthcare region, mostly to neighboring
As with any disruptive technol- practitioners. By doing so, Philips countries such as Singapore and
ogy, education plays a key role is raising the bar of services and Malaysia. Both government and
in communicating not only the know-how by not only enhancing the industry are fully aware of this
benefits of such innovations but healthcare infrastructure but also patient outflow and are commit-
also ensuring that healthcare pro- contributing to the development ted to decisively increasing the
fessionals are correctly using the of human capital. Through these quality of service offered domes-
products. Philips’ Suryo explains types of initiatives we aim to cre- tically in order to retain these
that “We are closely collaborating ate not just a single impact on the patients. Siemens Healthineers’
with the government through dif- healthcare eco-system but rather a Lee affirms that “We aim to retain
ferent initiatives in teaching hos- systemic one.” those patients that are undergo-
pitals to provide them with not On the private side of the ing treatment abroad by offering
only the best equipment but also Indonesian market, opportunities them higher standards in technol-
the best medical education. We for the medical devices industry lie ogy and innovation in Indonesian
are concentrating our efforts on with the middle and upper-middle private hospitals.”
HARIS IZMEE
Country Director, GE Healthcare Indonesia
HCLS: Indonesia accounts for 30 percent of GE Healthcare’s business in South

East Asia. Could you pinpoint the reasons that position Indonesia as such a stra-
tegic market for the company?
HARIS IZMEE
HARIS IZMEE: Just looking at demographic data, Indonesia is the fourth most
populous country globally with more than 250 million inhabitants. Furthermore, the
implementation of the universal healthcare coverage (JKN) has boosted the demand for healthcare ser-
vices. Hence, GE Healthcare strongly supports the government in the implementation of this ambitious
healthcare program.
The corporate motto, “Healthymagination” aims to enhance healthcare quality, access and affordability in
order to bring better health to people. How is this global philosophy implemented in Indonesia?
Since GE Healthcare’s inception in Indonesia, we have always advanced alongside three main axes: en-
larging market access, improving quality, and enhancing affordability. In fact, we are continuously thinking
about these three pillars when undertaking business decisions and I am really delighted about the align-
ment with the current government goals.
We have totally transitioned from being product- to being solution-oriented, looking to only introduce
those products to Indonesia that can create healthcare breakthroughs targeted at local challenges, needs
and trends. Focusing on emerging markets and Indonesia, we are developing an affordable healthcare
portfolio that maintains the highest level of quality but only includes the most relevant features according
to our clients’ needs while at the same time making our solutions more accessible.

STRAP
CEOINPROFILE
HERE PLEASE
Strap
Suryo
subhead
Suwignjo,
in herePhilips
please
LOREMFROM
IPSUM PRODUCTS TO
DOLOR SIT SOLUTIONS
AMET
A
fter 14 years of management expe- Additionally, Suwignjo is also inspired by “the
Preface: A rience at US technology giant IBM, fact that by doing business we are also contribut-
Suryo Suwignjo was appointed pres- ing to a better quality of life for people.” The suc-
ident director of Philips Indonesia cess of the business can be seen in the fact that “the
in April 2014. Since then, the glob- company has been growing at a solid, sustainable
al Philips group has spun off its lighting business and healthy double-digit rate over the last three
and consolidated its consumer electronics and years.” In terms of ensuring a better of quality of
healthcare businesses in order to, in Suwignjo’s life for patients, Philips’ innovative medtech solu-
words “focus entirely on healthcare, offering an tions are helping bridge access gaps in a country
end-to-end solution covering the entire health con- where healthcare infrastructure is severely under-
tinuum – from hospital to home.” Consequently, developed, especially in remote areas. Suwignjo
Suwignjo’s priority has been to implement this is keen to highlight the tailored strategy that has
new strategy “of developing an integral solution been adopted in a diverse market with more than
that enables a treatment continuum between 5,000 kilometers of coastline and approximately
patients and doctors” across Indonesia. 17,000 islands; pointing out that “we have to listen
Suwignjo explains that the experience gained intently to our clients to be able to provide them
in his previous role at IBM has stood him in good exactly with what they need and shape our portfo-
stead for implementing change at Philips; point- lio accordingly.”
ing out that, “Philips is moving from being prod-
uct-oriented to being solution-oriented. IBM
passed through a similar change in the past when
it switched its business from hardware to software.
Hence, my prior experience is certainly helping me
to better understand as well as implement this stra-
tegic move, allowing me to apply my previously
acquired knowledge to the current context.”
Furthermore, Suwignjo is something of a trail-
blazer in that, as he notes, “even though Philips has
been in Indonesia for more than a century, I am
the first Indonesian president director.” He there-
fore feels a great motivation to perform well and
highlight the ability of Indonesians in prominent
management positions. He explains that his posi-
tion at Philips “allows and motivates me to show-
case the existing local professional capabilities in
Indonesia; Indonesians are able to lead prominent
multinational companies and bring their business
SURYO SUWIGNJO
to the next level.” PHILIPS

MNC STRATEGY
Milan Paleja, Novartis
THE PARTNER HCLS: What is your strategy to

successfully navigate within such
OF CHOICE a dynamic environment?

MP: Our business expansion
strategy is based on enhancing pa-
tient access in both public and pri-
vate sectors, and providing CME.
We are focused on providing our
Milan Paleja, country president and general manager of Novartis Indone-
innovative and effective medicines
sia, discusses his main priorities since assuming his current position and
the organization’s business expansion strategy, based on enhancing pa- to more Indonesian patients, par-
tient access to innovative medicines in both the public and private sectors. ticularly in new therapeutic areas
and for diseases that have a heavy
HCLS: Mr. Paleja, you were Novartis Indonesia group’s growth socio-economic burden such as
appointed as country president was by 16 percent in 2016, a growth Heart Failure.
and general manager of Novar- rate that is twice that of the multi- For the public market, we have 28
tis Pharmaceuticals in Indonesia national pharma industry. By uti- SKUs listed in the national formu-
back in March 2016. What was lizing innovative digital media, we lary, available for all Indonesians
your assigned mission? provided continuing medical edu- who are covered by the NHIP.
MILAN PALEJA (MP): Novartis cation (CME) to healthcare profes- On a parallel and complementa-
is committed to improving and ex- sionals in remote areas. To date, our ry track, we run CME programs to
tending patient lives by providing CME programs have reached more inform doctors and other health-
patients with access to our innova- than 800 physicians in different care professionals in both public
tive medicines. When I was appoint- therapeutic areas and planned for and private sectors about our inno-
ed to lead Novartis Indonesia, I had additional 800 in year to go. vative products.
four priorities.
First, enhance our operation-
al efficiency and motivate our
team. Second, drive the growth
of Novartis Indonesia by increas-
ing access to our products in both
public and private sectors. Third,
position Novartis as the govern-
ment’s partner in implementing
the Universal Healthcare Coverage
Program or JKN. Fourth, diversify
our product offerings to different
therapeutic areas.
HCLS: What have been your

biggest accomplishments during
the first year of mandate? MILAN
MP: We actively worked with PALEJA

various stakeholders in support- country
ing Indonesia’s National Health president and
Insurance Program (NHIP). Thanks general manager,
Novartis
to our multi-stakeholder engage- Indonesia
ments and highly motivated team,

MNC STRATEGY
Milan Paleja, Novartis
Our goal is twofold: to make the a shared services organization called 800 hundred and more physicians
right medicines available and to ena- Novartis Business Services (NBS), that we are engaging will then have
ble the right healthcare profession- which consolidated a number of the ability to reach out to thousands
als to prescribe them, i.e. enhance business support services currently and thousands of patients across
the skills of doctors in Indonesia spread across divisions. This syner- Indonesia to make their lives better.
and bring innovative medicines to gy allows Novartis divisions to focus
the country. more on customer-facing activities.
HCLS: What are the synergies HCLS: Innovation is within the WE ARE COMMITTED
between pharmaceuticals, oncol- core values of Novartis; hence, the TO LEVERAGING
ogy and eye care Business under company invests approximately NOVARTIS
Novartis Indonesia and how are 18-20 % of its total revenues in INNOVATION
you fostering them? developing R&D activities. How
MP: To achieve our mission of much of such innovation is go-
AND IMPROVING
improving and extending patients’ ing to be brought to the country INDONESIAN
lives, we have a program called in order to target the Indonesian PATIENTS’ LIVES.
“Customer First” in which all patients’ needs?
Novartis divisions collaborate on MP: We are committed to lever- HCLS: What are the three
initiatives that prioritize our cus- aging Novartis innovation and im- main objectives that you would
tomers, including the NHIP and key proving Indonesian patients’ lives. like to achieve in the upcoming
accounts, as well as provide value to To date, we have launched five new two years?
patients. medicines in Indonesia address- MP: As I have mentioned earlier,
In 2014 as part of an ongoing pro- ing Heart Failure, COPD, Multiple our goal is twofold: to make the
ductivity initiative, Novartis created Sclerosis, Psoriasis and Cancer. The right medicines available and to en-
able the right healthcare profession-
als to prescribe them, i.e. enhance
the skills of doctors in Indonesia
and bring innovative medicines to
the country.
In the upcoming years, we want
to further strengthen our col-
laboration with the Indonesian
Government, particularly the
Ministry of Health & Ministry
of Finance, in order to support
the NHIP and increase access to
Novartis products.
We aim to build up our team
competencies and send outstand-
ing Indonesian talents to Novartis
group companies overseas.
Last but not the least; we will
develop patient support programs
across key therapeutic areas in order
to help more Indonesian patients
gain access to innovative and effec-
tive treatments.

EMERGING THREATS
Anti-Microbial Resistance
ANTIBIOTICS:
SOMETIMES LESS IS MORE
The World Health Organization (WHO), these days, considers anti-Microbial Resistance (AMR) an
emerging global menace with the number of afflicted patients forecast to increase dramatically in the
coming years. As the world’s fourth most populous nation, Indonesia now lies at the vanguard of fresh
efforts to raise awareness about this gathering storm and at the very heart of new initiatives to bolster
antiseptic usage and encourage proper prescribing behaviors.
A
ntibiotics are essential for the treat- A recent survey carried out by the Indonesian
ment of communicable diseases, but Caring Parents Foundation (YOP) found that 95
the bacterial resistance related to percent of doctors always prescribe antibiotics to
the consumption of anti-microbial their patients and 75 percent of them prescribe
drugs has radically curbed the ben- antibiotics for mild sicknesses, such as coughs.
efits of such medicines. The threat of AMR is well Indeed, these figures align with research conduct-
known and the WHO has categorized this global ed by the Indonesian Health Ministry back in 2013
health burden as one of the top threats to man- that demonstrated that only 27 percent of physi-
kind, with some 700,000 victims suffering from cians in Indonesia had prescribed the correct dose
antibiotic-resistant bacteria annually. Future fore- of antibiotics for their patients. Consequently, Dr.
casts are even more concerning: it is estimated Nila F. Moloek, Indonesian Minister of Health, has
that 10 million people will die annually due to this specifically requested that the Indonesian Doctors
health burden by 2050, according to the 2014 AMR Association (IDI) “design initiatives targeted at
Review. promoting the appropriate prescription and the
In Indonesia, however, a proliferation of inci- smart use of antibiotics by healthcare practition-
dence of anti-microbial resistance has not yet ers in the country.”
been adequately communicated in public health In parallel, many drug developers active in the
awareness campaigns. Furthermore, data on the local market believe they have a duty to support the
prevalence of AMR in Indonesia remains scant government in its efforts through the deliverance
and incomplete. Increasingly, however, policy- and roll out of educational and knowledge-sharing
makers, healthcare providers, clinicians and pri- programs. Mundipharma, for instance, stands out
vate industry actors alike are starting to acknowl- as a shining example to this effect. “Mundipharma
edge the dangers of allowing this status quo to is currently carrying out medical education initia-
prevail. In the assessment of Mundipharma’s tives within its Consumer Health division through
country manager, Mada Shinta Dewi, “AMR has its antiseptic Betadine® explicitly to fight against
become an increasingly significant national health antimicrobial resistance,” explains Shinta Dewi. “If
issue for our country, especially as we rank as one only patients were to use antiseptics before start-
of the largest antibiotics consumers globally.” ing an antibiotics treatment, significant strides
Meanwhile, the Indonesian Health Ministry has forward could be attained,” he affirms. “Thus we
set about creating a dedicated task force called regard it as part of our mission to raise awareness
the Antimicrobial Resistance Control Committee throughout the in-country medical profession as
(KPRA) in order to fight against the phenomenon to the immense benefits to be derived from sound
of antibiotics overuse. use of antiseptics.”

CONSUMER HEALTHCARE
Holger Welters, Beiersdorf
MORE THAN
SKIN DEEP
Holger Welters, president director at Beiersdorf Indo-
nesia, describes the company’s ambitious growth plan
for emerging markets and the importance of bringing
high quality skincare solutions to Indonesia through
Nivea® and Hansaplast®.
Holger Welters
BEIERSDORF
in line with the rate we have been enjoying in the past
few years. Naturally, what we started implementing in
2012 has been crucial to driving and delivering this
HCLS: In 2012, Beiersdorf introduced a corpo- growth. It enabled us to heavily invest in upgrading
rate strategic roadmap: “Blue Agenda”, which aims our manufacturing plant in East Java, which mainly
to strengthen brands, increase innovative power, serves the national demand. Looking ahead, we have
expand presence in emerging markets, and focus already put in place several actions that will secure our
on dedicated employees. How is this strategic plan sustainability as well as growth in the future.
reflected in Indonesia?
HOLGER WELTERS (HW): All Beiersdorf employ- HCLS: How is your offering structured here in
ees live and breathe the “Blue Agenda”, which means Indonesia?
that these guidelines are reflected in our daily opera- HW: Currently, we are solely commercializing the
tions. On a more corporate level, the “Blue Agenda” Nivea® and Hansaplast® brands. Our short-term
emphasizes that our core business is skincare and that strategy is focused on strengthening these two trade-
this is the area where we focus our capabilities such marks while in the long-term, we expect to introduce
as R&D, know-how, and investments. On a local level, other Beiersdorf brands such as Eucerin®. However, in
Beiersdorf Indonesia is offering skincare solutions order to successfully launch new products and guar-
through Hansaplast® for injured skin, and Nivea® for antee their longevity in Indonesia, many prerequisites
beautiful skin. need to be fulfilled, including strong market know-
With regards to expanding presence in emerging mar- how, an accurate strategy as well as the right team.
kets, we have started investing strongly in Indonesia
but also the Philippines since the Blue Agenda was HCLS: How do you foster the use of the Beiers-
launched in order to seize the immense potential these dorf brands to encourage an increased personal
markets bear. care mentality among Indonesians?
HW: Providing education about the benefits of our
HCLS: What is the significance of the Indone- products is crucial to enhancing the market penetra-
sian affiliate within the regional context? tion of our brands. There is a market but the need by
HW: Indonesia must deliver aggressive growth to our itself needs to be developed by communicating the im-
regional business. Therefore, we are targeting approxi- portance of skincare, the impact of its negligence and
mately +15 percent CAGR over the foreseeable future, the benefits of using our products.

CLINICAL TRIALS
Untapped Potential
PROTECTIONISM &
CLINICAL RESEARCH:
HINDRANCE OR HELP?
The Indonesian clinical research industry is highly underdeveloped, pri-
marily as a consequence of regulation issued back in 2010 that limits the
possibility of sending clinical trial materials outside of the country. Howev-
er, Indonesia has the potential to play a leading role in the regional clinical
trial landscape because of its large population, vast geographic area, as
well as the willingness of the domestic pharmaceutical industry to make
this a reality.
C urrently, the number of registered

clinical trials in Indonesia is one of
the lowest across the entire ASEAN
region, mainly due to 2010 regulation
that created tighter controls on clin-
ical trial samples being taken out of Indonesia for
the purposes of pooled analyses. Endang Hoyaranda,
Indonesia, highlights that “The IPMG (International
Pharmaceutical Manufacturers Group) member com-
panies have shared for consideration a proposed
roadmap on how Indonesia, Southeast Asia’s larg-
est economy, can become a healthcare investment
hub for the region. The roadmap outlines the ide-
al conditions for R&D investment, policies to fos-
president director at Prodia Group, explains “The ter local–MNC industry partnerships, and sugges-
government issued a regulation about clinical mate- tions on the Universal Healthcare coverage program
rial transfer back in 2010 that limited the possibility (Jaminan Kesehatan Nasional - JKN). We believe that
of sending clinical trial materials outside Indonesia, Indonesia’s large and diverse population offers a
the so-called MTA (Indonesian Material Transfer great clinical research opportunity.” However, “a tre-
Agreement). This regulation tremendously limit- mendous amount of work needs to be done which
ed CRO activity and consequently, the volume of includes increasing investment in human capital,
clinical trials run in Indonesia is very small in com- enforcing strong IP protection, investment in build-
parison to what it was in the past and especially to ing the clinical trial infrastructure and a regulato-
what it should be - considering the population size ry framework that supports rapid registration and
of the country.” As of January 2016, Indonesia had broadening patient access. We look forward to work-
289 registered clinical trials while peers in the region ing in continued partnership with the Ministry of
such as Thailand and Singapore had 1,866 and 1,573 Health, towards realizing this vision”, Pal adds.
respectively. Bringing the discussion to a regional level and
Nevertheless, the industry is actively dialogu- aligned with the latter point, “we are aware that
ing with key stakeholders to advance towards a Indonesia is clearly underdeveloped when compared
more liberalized clinical development sector. In to Thailand, Malaysia or Philippines. The only way
this sense, Ashish Pal, president director at MSD to change that is through close collaboration with

CLINICAL TRIALS
Untapped Potential
“IPMG members such as Novartis, Merck, Bayer,

Boehringer Ingelheim, and Pfizer have invested more
than USD one billion in Indonesia’s pharmaceuti-
cal industry over the past few years, particularly for
the construction of factories and clinical research.”
Additionally, and aligned with the government’s
collaboration goals, there are several partnerships
between local companies and MNCs in the medi-
cal development arena since the latter leverages on
Indonesian companies to develop their clinical tri-
als in Indonesia and overcome local challenges. In
this sense, “Prodia enjoys the trust of leading MNCs
to support them in running clinical trials in the
country. Our local knowledge is one of our com-
petitive advantages in our CRO business”, reveals
Horayanda.
Furthermore, from a patient access standpoint,
“liberalizing the clinical development sector will offer
Indonesian patients more access to clinical research
as a possible treatment option; help bring better
medicines to patients faster and expand our medical
research industry”, QuintilesIMS’ Sasongko adds.
authorities – sharing information and ideas to bring In a nutshell, Indonesia has regulatory barriers that
more clinical research to Indonesia” Wiwy Sasongko, limit exporting clinical samples and, therefore, such
managing director at QuintilesIMS Indonesia, laws have a significant impact on the industry’s abili-
declares. ty to perform clinical trials locally. Therefore, there is
Hence, both the MNC and local industry is com- an opportunity cost in such a protectionist policy in
mitted in helping the country overcome these chal- terms of market access and, especially, economic val-
lenges and, as an example, “Prodia is already collab- ue. In fact, just as an example that showcases the eco-
orating with four hospitals to help them to manage nomic potential of clinical research and associated
clinical trials in their establishments through train- investment, each year Singapore attracts around USD
ing courses and other medical education programs. eight billion of biopharmaceutical investment with
We are keen to invite other industry stakeholders to a prime focus on R&D activities. Thus, it looks like
develop clinical trials capabilities in the country”, the only path of development involves a continuous
Prodia’s Horayanda discloses. effort from the industry to work with the authorities
Despite the obvious challenges in terms of national to make reasonable and necessary changes so that
regulation and capabilities, it looks like the industry Indonesia can compete with other South East Asian
has not stopped investing in this area. In the words countries in the clinical trials arena as well as take
of IPMG’s executive director, Parulian Simanjuntak, advantage of its strong potential economic value.
WE BELIEVE THAT INDONESIA’S LARGE AND DIVERSE

POPULATION OFFERS A GREAT CLINICAL RESEARCH
OPPORTUNITY.
ASHISH PAL MSD

INDEX
Including advertisers
Advertisers
COMPANY NAME PAGE

American Chamber of Commerce 4, 15, 22, 29
APL 25, 28, 34, 35
Beiersdorf 22, 27, 31, 32, 44
Boehringer Ingelheim 34, 35, 46
BPJS Kesehatan (Security Administering Body for Health) 18, 24, 25, 31, 36
BPOM (National Agency of Food and Drug Control) 12, 22, 29, 36, 37
British Chamber of Commerce 23
CSSUI (Center for Social Security Studies of the University of Indonesia) 25, 26
DJSN (National Social Security Council) 18, 24, 25
GE Healthcare 38, 39
GP Farmasi 14, 24, 28
GSK 4, 31
Enseval 30, 33, 34
Exeltis 33, 36, 37
IDS Medical Systems 4, 29, 31
IPMG (International Pharmaceutical Manufacturers Group) 14, 15, 24, 26, 45, 46
Kimia Farma 20, 28, 35
LKPP (National Public Procurement Agency) 16, 17, 22, 26, 36
Mensa Group 4, 27
Metro Drug Indonesia (MDI) 33, 34
Ministry of Health 6, 12, 22, 27, 32, 42, 45
Ministry of Industry 13, 14, 28
MSD 24, 32, 45, 46
Mundipharma 26, 29, 32, 33, 43
Novartis 23, 41, 42, 46
PERSI (National Association of Hospitals) 24, 29
Philips 23, 25, 27, 38, 39, 40
Prodia Group 45, 46
QuintilesIMS 22, 25, 26, 28, 46
Sanofi 4, 29, 30, 32
Servier 21, 27, 30
Siemens Healthineers 4, 23, 27, 31, 38, 39

Photo © cover: Dipo Andy

Photo © page 2: Pixabay. Public domain.
Photo © page 4: Traditional Indonesian puppets. Flickr: kaybee07
Photo © page 5: Ketut Soki
Photo © page 6: Pixabay. Public domain.
Photo © page 13: Indonesia Airport Gate E1. Flickr: Jirapat Suparitchikul
Photo © page 14-15: Kaze wo atsumete. Flickr: ∆ sept. ∆
Photo © page 16-17: Albert Yonathan.
Photo © page 18-19: Negeri Di Atas Awan, Central Java. Flickr: Tanti Ruwani
Photo © page 21: Batik Painting Yanci. Flickr: Jago Bahaya
Photo © page 36-37: Kampung Warna Warni - Malang, Indonesia. Flickr: Charles Erbianco
Photo © page 40: Pixabay. Public doamin.
Photo © page 41-42: Sanur Paradise Plaza Suite. Flickr: Marufish
Photo © page 45-46: Semeru at Sunrise. Flickr: Adi Prabowo

Review Indonesia August2017

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Review Indonesia August2017

Caricato da

Copyright:

Formati disponibili

EXCLUSIVE INTERVIEWS MAKING SENSE OF THE SPOTLIGHT ON A ANTIBIOTICS:

THE AWAKENING GIANT? page 21

INDONESIA AUGUST 2017

Prof. Nila Moeloek, minister of health of the Republic of Indonesia

Airlangga Hartarto, minister of industry of the Republic of Indonesia

Maura Linda Sitanggang, director general of pharmaceuticals and medical

Penny Lukito, head, BPOM

Sigit Priohutomo, chairman, DJSN

Fachmi Idris, president director, BPJS

Agus Prabowo, chairman, LKPP

Parulian Simanjutak, executive director, IPMG

Darodjatun Sanusi, executive director, GP Farmasi

Sugihadi Hadiwinoto, chairman, Gakeslab

Kuntjoro Adi Purjanto, president, PERSI

Hasbullah Thabrany, chairman, Center for Social Security Studies Universitas

Wiwy Sasongko, Managing Director, QuintilesIMS

2 Healthcare & Life Sciences Review: Indonesia www.pharmaboardroom.com

The Awakening 8 SNAPSHOT IN FIGURES

13 GOVERMENT PERSPECTIVE INTERVIEW

14 REGULATORY CHANGE FEATURE The Halal Law

16 PUBLIC PROCUREMENT INTERVIEW

18 UNIVERSAL HEALTHCARE INTERVIEW

21 THE AWAKENING GIANT? COVER STORY

23 Plunging Into the Red

35 There for the Taking

36 MANUFACTURING AND WOMEN’S HEALTH

www.pharmaboardroom.com Healthcare & Life Sciences Review: Indonesia 3

JOIN THE CONVERSATION

AMPLIFIED CONTENT IN BRIEF

STEVEN LEE @pharmaboardroom

4 Healthcare & Life Sciences Review: Indonesia www.pharmaboardroom.com

www.pharmaboardroom.com Healthcare & Life Sciences Review: Indonesia 5

Dear members of the international healthcare community,

Prof. Nila Moeloek, MD, PhD

6 Healthcare & Life Sciences Review: Indonesia www.pharmaboardroom.com

We are present in more countries than anyone else.

www.pharmaboardroom.com Healthcare & Life Sciences Review: Indonesia 7

INDONESIA POPULATION PROJECTIONS HEALTHCARE COVERAGE PROJECTION

284.8 2014 2015

HEALTHCARE SPENDING IN ASEAN TOTAL HEALTHCARE EXPENDITURE AS A

8 Healthcare & Life Sciences Review: Indonesia www.pharmaboardroom.com

NUMBER OF PHARMA COMPANIES IN INDONESIA

VALUE IN IDR BILLION PERCENTAGE (%) CAGR IN LAST 5 YEARS (%)

24 17,695 28% 9.83%

Indonesian pharmaceutical market is 27% of the total ASEAN market

MOVING ANNUAL TOTAL VALUE SHARE (PHARMACY + HOSPITAL + DRUGSTORE)

4Q12 42% 16% 37% 5%

4Q13 42% 16% 37% 5% 3.7% 5.6%

4Q14 41% 17% 35% 6% -2.0% -4.2%

4Q16 42% 17% 34% 6% -0.6% -3.1%

4Q12 63% 6% 30% 1%

11.4% 5.3% DOMESTIC

4Q12 29% 32% 29% 10% 22.1% 18.8% MNC

4Q13 30% 31% 30% 10% 3.5% -2.7% MNC NON

www.pharmaboardroom.com Healthcare & Life Sciences Review: Indonesia 9

THE INDONESIAN PHARMACEUTICAL MARKET HAS GROWN AT 7.49% IN MAT Q4 2016

22.9% MNC PRESCRIPTION

TOTAL 7.80 9.83 7.07

10 Healthcare & Life Sciences Review: Indonesia www.pharmaboardroom.com

TOP 10 COMPANIES IN PHARMACY SECTOR

MAT Value 4Q16 (Billions Indonesian Rupiees) + MARKET GROWTH

SANBE 549 6.3% 2.8%

Average growth of pharmacy sector: 1.8% Source: QuintilesIMS

TOP 10 COMPANIES IN HOSPITAL SECTOR