GDHC0058CHR-Healthcare, Regulatory and Reimbursement Landscape - Indonesia … · ... (Kalbe Farma,...

HEALTHCARE, REGULATORY AND REIMBURSEMENT LANDSCAPE - INDONESIA

REFERENCE CODE GDHC0058CHR | PUBLICATION DATE APRIL 2014

Healthcare, Regulatory and Reimbursement Landscape - Indonesia 2 © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.


Executive Summary

A Growing Urban Population, Increased Government Healthcare Spending and an Increasing Life Expectancy are The Key Drivers of Growth in the Indonesian Healthcare Market; However Counterfeit Medicines and The Increasing Use of Generics with the Aim of Reducing Healthcare Expenditure, May have a Negative Effect.

The pharmaceutical market in Indonesia was worth

approximately $XX billion in 2008 and is projected

to reach approximately $XX billion by 2020 at a

Compound Annual Growth Rate (CAGR) of XX%

(Sudharta et al., 2010). This growth is expected to

be due to the introduction of government

healthcare reimbursement programs such as

Jamkesmas and the Family Hope Program

(Program Keluarga Harapan, PKH). Approximately

XX% of the population was covered by health

insurance in 2007, which increased to XX% in

2011. This increase is mainly due to efficient

implementation of the government healthcare

reimbursement program Jamkesmas and the

introduction of an operational assistance health

fund in 2010. Therapeutic segments such as anti-

infectives and respiratory are expected to grow in

the future due to the rising incidence of

communicable diseases such as Tuberculosis

(TB), Human Immunodeficiency Virus (HIV),

Acquired Immune Deficiency Syndrome (AIDS),

pneumonia and leprosy (MoHRI, 2011).

Multinational Companies (MNCs) will increase their

presence in the pharmaceutical market as they

offer largely patented drugs, which are covered by

free pricing policies. A lack of R&D activity from

domestic manufacturers has limited their ability to

offer generic drugs. The generic market itself is

undergoing rapid expansion, driven by government

incentives and the loss of patent protection for

several high-volume products. The government

has introduced two laws to promote the use of

generics. Physicians in government health facilities

should prescribe unbranded generic drugs to all

patients wherever possible, and the government

has also regulated the price of almost XX generic

drugs (Kalbe Farma, 2011; Kalbe Farma, 2013).

In 2008, OTC drugs accounted for approximately

XX% of the pharmaceutical market, which

increased to an estimated XX% in 2013 due to an

increase in self-medication as a result of increase

in cases of minor ailments and limited insurance

coverage.

Counterfeit medicines are however expected to

restrict growth, and accounted for approximately

XX% of the Indonesian pharmaceutical market in

2005 (WHO, 2005). As a result, the National

Agency of Drug and Food Control (NA-DFC), or

Badan Pengawas Obat dan Makanan, has

strengthened its investigations in an attempt to

reduce their influence in the pharmaceutical market

(WHO, 2005).



Executive Summary

Pharmaceutical Market, Indonesia, Revenue ($bn), 2008–2020

2008 2013* 2015 2020

Rev

enue

($bn

)

CAGR (2008–2020): XX%

Source: Sudharta et al., 2010 *Estimated value

In 2010, according to US Commercial Service

estimates, Indonesia’s medical device market was

worth approximately $XXm. Indonesia

manufactures a range of medical equipment such

as hospital beds, disposable supplies and

wheelchairs; however, it imports more than 90% of

its medical devices as the domestic industry is

poorly developed. In 2010, according to US

Commercial Service estimates, total imports in the

medical device market were worth $XXm, an

increase of XX% over 2009. In 2010, the US

accounted for the highest proportion of medical

device imports in Indonesia, with XX% (ITA, 2014).

In 2012, the Association of Southeast Asian

Nations (ASEAN) Medical Device Directive

(AMDD) was introduced by the Medical Device

Product Working Group (MDPWG) and is to be

fully exercised by all member states by 2015. It will

bring much-needed uniformity to the medical

device registration system and increase foreign

investment in the Indonesian market

Non-Efficient and Non-Transparent Intellectual Property (IP) Protection for Pharmaceutical Products and Medical Devices Leaves Major Loopholes in Indonesia’s Healthcare System.

The Directorate General of Intellectual Property

(DGIP) is a centralized authority which registers

Intellectual Property Rights (IPR), and works under

the Ministry of Justice and Human Rights.

The country’s regulatory system for IP enforcement

is problematic on a number of levels, due to

inadequate observation and enforcement and a

lack of an effective customs recordal system to

discourage infringement of IP rights. Laws and

practices are substantially unaligned with the wider

international standards established by the

Agreement on Trade Related Aspects of

Intellectual Property Rights (TRIPS) that inform

other countries’ IP laws. Infringement is common,

and penalties can be imprisonment for up to seven

years and/or a fine of approximately IDR5 billion

($XX), but in practice only minor charges are

imposed (Eurocham, 2014). Although

improvements have been made to the civil court

system for IP cases in the last 10 years, self-help

is often the main option. This creates major

barriers to foreign investment in the Indonesian

healthcare market, and its growing economy

demands a much more efficient legal system to

deal with the current scenario.



Table of Contents

1 Table of Contents

1 Table of Contents .......................................................................................................................... 6

1.1 List of Tables............................................................................................................................ 9

1.2 List of Figures ........................................................................................................................ 12

2 Introduction ................................................................................................................................. 16

2.1 GlobalData Report Guidance ................................................................................................. 16

3 Overview of Pharmaceutical and Medical Device Markets ........................................................... 17

3.1 Pharmaceutical Market .......................................................................................................... 17

3.1.1 Market Overview ............................................................................................................. 17

3.1.2 Supply Channels............................................................................................................. 20

3.1.3 Market Segments............................................................................................................ 22

3.1.4 Major Drug Classes ........................................................................................................ 26

3.1.5 Major Players .................................................................................................................. 33

3.2 Medical Device Market ........................................................................................................... 53

3.2.1 Market Overview ............................................................................................................. 53

3.3 Market Drivers and Barriers ................................................................................................... 55

3.3.1 Drivers ............................................................................................................................ 55

3.3.2 Barriers ........................................................................................................................... 56

4 Market Access ............................................................................................................................. 59

4.1 Reimbursement and Payer Landscape .................................................................................. 59

4.1.1 Overview of Healthcare System ...................................................................................... 59

4.1.2 Reimbursement Process................................................................................................. 60

4.1.3 Overview of Insurance Providers .................................................................................... 62

4.1.4 Patient Share of Healthcare Expenditure ........................................................................ 65

4.1.5 Healthcare Price Trends ................................................................................................. 66

4.1.6 Pricing Policies ............................................................................................................... 67

4.2 Regulatory Landscape ........................................................................................................... 68



Table of Contents

4.2.1 Overview of Regulatory Agencies ................................................................................... 68

4.2.2 Market Authorization Procedure for Pharmaceutical Products ........................................ 69

4.2.3 New Medical Device Approval Process ........................................................................... 73

4.2.4 Licensing Process for Pharmaceutical and Medical Device Manufacturing ..................... 75

4.2.5 Licensing Process for Pharmaceutical Exports and Imports ............................................ 76

4.2.6 Intellectual Property Rights ............................................................................................. 77

4.2.7 Clinical Trial Regulations ................................................................................................ 81

4.2.8 Pharmaceutical Advertising Regulations ......................................................................... 82

4.2.9 Pharmacy Regulations .................................................................................................... 83

4.2.10 Labeling and Packaging Regulations .............................................................................. 83

5 Country Analysis ......................................................................................................................... 85

5.1 Political Environment .............................................................................................................. 85

5.1.1 Political Structure ............................................................................................................ 85

5.1.2 Analysis of the Current Political Environment .................................................................. 86

5.1.3 Healthcare Policy Initiatives ............................................................................................ 87

5.2 Economic Landscape ............................................................................................................. 89

5.3 Economic Indicators ............................................................................................................... 92

5.3.1 Gross Domestic Product ................................................................................................. 92

5.3.2 Gross National Income ................................................................................................... 96

5.3.3 Inflation ........................................................................................................................... 98

5.3.4 Currency Exchange Rate .............................................................................................. 101

5.3.5 Foreign Direct Investment ............................................................................................. 102

5.3.6 Foreign Exchange Reserves ......................................................................................... 104

5.3.7 Trade Balance .............................................................................................................. 105

5.3.8 Government Structural Balance .................................................................................... 107

5.3.9 Government Gross Debt ............................................................................................... 108

5.3.10 Major Industries ............................................................................................................ 110



Table of Contents

5.4 Demographics ...................................................................................................................... 112

5.4.1 Population .................................................................................................................... 112

5.4.2 Education and Literacy ................................................................................................. 126

5.4.3 Employment.................................................................................................................. 129

5.4.4 Disease Burden ............................................................................................................ 130

5.5 Healthcare Infrastructure ...................................................................................................... 133

5.5.2 Healthcare Parameters ................................................................................................. 138

5.5.3 Environmental Health ................................................................................................... 140

5.5.4 Healthcare Personnel ................................................................................................... 145

5.6 Healthcare Expenditure ........................................................................................................ 148

5.6.1 Overview of Healthcare Expenditure ............................................................................. 148

5.6.2 Major Components of Healthcare Expenditure .............................................................. 150

5.6.3 Healthcare Expenditure Distribution .............................................................................. 151

5.7 Trade Associations............................................................................................................... 153

5.7.1 International Pharmaceutical Manufacturers Group ...................................................... 153

5.7.2 Indonesia Pharmaceutical Association .......................................................................... 153

5.7.3 Indonesia Medical Association ...................................................................................... 153

5.8 Trade Fairs........................................................................................................................... 153

6 Opportunities and Challenges ................................................................................................... 155

6.1 Opportunities........................................................................................................................ 155

6.2 Challenges ........................................................................................................................... 157

7 Appendix ................................................................................................................................... 159

7.1 Abbreviations ....................................................................................................................... 159

7.2 Bibliography ......................................................................................................................... 161

7.3 Research Methodology ........................................................................................................ 169

7.3.1 Coverage ...................................................................................................................... 170

7.3.2 Secondary Research .................................................................................................... 170



Table of Contents

7.3.3 Forecasts ...................................................................................................................... 171

7.3.4 Expert Panel ................................................................................................................. 171

7.4 Disclaimer ............................................................................................................................ 171

1.1 List of Tables

Table 1: Pharmaceutical Market, Indonesia, Revenue ($bn), 2008–2013 ....................................................... 19

Table 2: Pharmaceutical Market, Indonesia, Revenue Forecast ($bn), 2014–2020 ......................................... 20

Table 3: Pharmaceutical Market, Indonesia, Distribution Channel Price Margins (%), 2014 ............................ 21

Table 4: Pharmaceutical Market, Indonesia, Pharmaceutical Distribution (%), 2010 ....................................... 22

Table 5: Pharmaceutical Market, Indonesia, OTC, Revenue ($bn), 2008–2013 .............................................. 24

Table 6: Pharmaceutical Market, Indonesia, Pharmaceutical Market Share (%), 2008–2013 .......................... 25

Table 7: Pharmaceutical Market, Indonesia, Major Therapeutic Areas (%), 2005............................................ 26

Table 8: Pharmaceutical Market, Indonesia, Antibiotics Market Segments (%), 2005...................................... 28

Table 9: Pharmaceutical Market, Indonesia, Respiratory Drug Market Segments (%), 2005 ........................... 29

Table 10: Pharmaceutical Market, Indonesia, Neuromuscular Drug Market Segments (%), 2005 ................... 30

Table 11: Pharmaceutical Market, Indonesia, Vitamins and Minerals Market Segment (%), 2005 ................... 31

Table 12: Pharmaceutical Market, Indonesia, Dermatological Drug Market Segments (%), 2005 .................... 32

Table 13: Major Products, PT Kalbe Farma Tbk, Revenue, 2012 ................................................................... 34

Table 14: Major Products, PT Tempo Scan Pacific Tbk, 2014 ........................................................................ 39

Table 15: Major Products, PT Darya-Varia Laboratoria Tbk, 2014 .................................................................. 48

Table 16: Major Products, PT Indofarma Tbk, 2014 ....................................................................................... 51

Table 17: Overview of Insurance Providers, Indonesia, Health Insurance Coverage (%), 2011 ....................... 63

Table 18: Overview of Insurance Providers, Indonesia, Public Health Insurance Schemes Overview, 2010 .... 64

Table 19: Overview of Insurance Providers, Indonesia, Patient Share of Healthcare Expenditure (%), 2008– 2013 .............................................................................................................................................. 66



Table of Contents

Table 20: Overview of Insurance Providers, Indonesia, Healthcare Inflation (%), 2008–2013 ......................... 67

Table 21: Regulatory Landscape, Indonesia, New Drug Registration Categories, 2014 .................................. 71

Table 22: Regulatory Landscape, Indonesia, Patent Application Fees, 2014 .................................................. 79

Table 23: Impact of Natural Calamities, Indonesia, 1996–2009 ...................................................................... 90

Table 24: Economic Indicators, Indonesia, GDP per Capita ($), 2008–2013 ................................................... 93

Table 25: Economic Indicators, Indonesia, GDP per Capita ($), Forecast, 2014–2020 ................................... 94

Table 26: Economic Indicators, Indonesia, GDP Annual Growth (%), 2008–2013 ........................................... 95

Table 27: Economic Indicators, Indonesia, GDP Annual Growth (%), Forecast, 2014–2020 ........................... 96

Table 28: Economic Indicators, Indonesia, GNI per Capita ($), 2008–2013 .................................................... 97

Table 29: Economic Indicators, Indonesia, Average Consumer Price Index, 2008–2013 ................................ 99

Table 30: Economic Indicators, Indonesia, Average Consumer Price Index, Forecast, 2014–2020 ................. 99

Table 31: Economic Indicators, Indonesia, Average Consumer Price Index Annual Change (%), 2008–2013100

Table 32: Economic Indicators, Indonesia, Average Consumer Price Index, Annual Change (%), Forecast, 2014–2020 ................................................................................................................................... 101

Table 33: Economic Indicators, Indonesia, Currency Exchange Rate (IDR/$), 2008–2013 ............................ 102

Table 34: Economic Indicators, Indonesia, Foreign Direct Investment ($bn), 2008–2013 .............................. 103

Table 35: Economic Indicators, Indonesia, Foreign Exchange Reserves ($bn), 2008–2013 .......................... 104

Table 36: Economic Indicators, Indonesia, Imports of Goods and Services ($bn), 2008–2013 ...................... 105

Table 37: Economic Indicators, Indonesia, Exports of Goods and Services ($bn), 2008–2013 ...................... 106

Table 38: Economic Indicators, Indonesia, General Government Structural Balance ($bn), 2008–2013 ........ 107

Table 39: Economic Indicators, Indonesia, General Government Gross Debt ($bn), 2008–2013 ................... 109

Table 40: Economic Indicators, Indonesia, General Government Gross Debt ($bn), Forecast, 2014–2020 ... 110

Table 41: Economic Indicators, Indonesia, Major Industries by GDP Share (%), 2012 .................................. 111

Table 42: Demographics, Indonesia, Population (million), 2008–2013 .......................................................... 112

Table 43: Demographics, Indonesia, Population (million), Forecast, 2014–2020........................................... 113



Table of Contents

Table 44: Demographics, Indonesia, Urban and Rural Population Share (%), 2008–2013 ............................ 114

Table 45: Demographics, Indonesia, Urban and Rural Population Share (%), Forecast, 2014–2020 ............. 115

Table 46: Demographics, Indonesia, Population Distribution by Age Group (%), 2008–2013 ........................ 116

Table 47: Demographics, Indonesia, Population Distribution by Age Group (%), Forecast, 2014–2020 ......... 117

Table 48: Demographics, Indonesia, Births (Per 1,000 Population), 2008–2013 ........................................... 118

Table 49: Demographics, Indonesia, Mortality (Per 1,000 Population), 2008–2013 ....................................... 119

Table 50: Demographics, Indonesia, Causes of Mortality (‘000), 2008.......................................................... 121

Table 51: Demographics, Indonesia, Children <5 Mortality Rate (Per 1,000 Live Births), 2008–2013 ............ 122

Table 52: Demographics, Indonesia, Immunization Rate (%), 2008–2013 .................................................... 123

Table 53: Demographics, Indonesia, Gender Ratio (M/F), 2008–2013 .......................................................... 124

Table 54: Demographics, Indonesia, Life Expectancy at Birth (Years), 2008–2013 ....................................... 125

Table 55: Demographics, Indonesia, Life Expectancy at Birth (Years), Forecast, 2014–2020 ....................... 126

Table 56: Demographics, Indonesia, Illiteracy by Age Group (%), 2008–2013 .............................................. 127

Table 57: Demographics, Indonesia, School Enrollment by Age Group (%), 2012 ........................................ 128

Table 58: Demographics, Indonesia, Unemployment (%), 2008–2013 .......................................................... 129

Table 59: Demographics, Indonesia, Causes of Hospitalization (Per 100,000 Population), 2010 .................. 131

Table 60: Demographics, Indonesia, DALY (Per 100,000 Population), 2004................................................. 132

Table 61: Healthcare Infrastructure, Indonesia, Public and Private Hospitals, 2008–2013 ............................ 134

Table 62: Healthcare Infrastructure, Indonesia, Health Centers (‘000), 2008–2013 ....................................... 135

Table 63: Healthcare Infrastructure, Indonesia, Hospitals by Type of Care, 2011 ......................................... 136

Table 64: Healthcare Infrastructure, Indonesia, General Hospital Beds (‘000), 2008–2013 ........................... 137

Table 65: Healthcare Infrastructure, Indonesia, Beds (Per 100,000 Population), 2008–2013 ........................ 138

Table 66: Healthcare Infrastructure, Indonesia, Physicians (Per 100,000 Population), 2008–2013 ............... 139

Table 67: Environmental Health, Indonesia, CO2 Emissions (Million Metric Tons), 2008–2013 ..................... 141



Table of Contents

Table 68: Environmental Health, Indonesia, PM10 Emissions (µg/m3), 2008–2013 ...................................... 142

Table 69: Environmental Health, Indonesia, Access to Protected Drinking Water (%), 2010 ......................... 144

Table 70: Environmental Health, Indonesia, Waste Handling (%), 2008 ....................................................... 145

Table 71: Healthcare Personnel, Indonesia, Nurses (Per 100,000 Population), 2008–2013 .......................... 146

Table 72: Healthcare Personnel, Indonesia, Pharmacists, (Per 100,000 Population), 2008–2013 ................. 147

Table 73: Healthcare Personnel, Indonesia, Dentists, (Per 100,000 Population), 2008–2013 ....................... 148

Table 74: Healthcare Expenditure, Indonesia, Healthcare Expenditure (%), 2008–2013 ............................... 149

Table 75: Healthcare Expenditure, Indonesia, Major Components (%), 2008................................................ 151

Table 76: Healthcare Expenditure, Indonesia, Distribution (%), 2008–2013 .................................................. 152

Table 77: Trade Fairs, Indonesia, Major Healthcare Trade Fairs, 2013–2014 ............................................... 154

1.2 List of Figures

Figure 1: Pharmaceutical Market, Indonesia, Revenue ($bn), 2008–2013 ...................................................... 19

Figure 2: Pharmaceutical Market, Indonesia, Revenue Forecast ($bn), 2014–2020 ........................................ 20

Figure 3: Pharmaceutical Market, Indonesia, Distribution Chain, 2014 ........................................................... 21

Figure 4: Pharmaceutical Market, Indonesia, Pharmaceutical Distribution (%), 2010 ...................................... 22

Figure 5: Pharmaceutical Market, Indonesia, OTC, Revenue ($bn), 2008–2013 ............................................. 24

Figure 6: Pharmaceutical Market, Indonesia, Pharmaceutical Market Share (%), 2008–2013 ......................... 25

Figure 7: Pharmaceutical Market, Indonesia, Major Therapeutic Areas (%), 2005 .......................................... 26

Figure 8: Pharmaceutical Market, Indonesia, Antibiotics Market Segments (%), 2005 .................................... 28

Figure 9: Pharmaceutical Market, Indonesia, Respiratory Drug Market Segments (%), 2005 .......................... 29

Figure 10: Pharmaceutical Market, Indonesia, Neuromuscular Drug Market Segments (%), 2005 .................. 30

Figure 11: Pharmaceutical Market, Indonesia, Vitamins and Minerals Market Segments (%), 2005 ................ 31

Figure 12: Pharmaceutical Market, Indonesia, Dermatological Drug Market Segments (%), 2005 ................... 32



Table of Contents

Figure 13: Healthcare Market, Indonesia, Drivers and Barriers, 2014 ............................................................. 58

Figure 14: Market Access, Indonesia, History of Health Insurance System, 1968–2008.................................. 60

Figure 15: Market Access, Indonesia, Process for Addition to Hospital Drug Formulary, 2014 ........................ 62

Figure 16: Overview of Insurance Providers, Indonesia, Health Insurance Coverage (%), 2011...................... 63

Figure 17: Overview of Insurance Providers, Indonesia, Patient Share of Healthcare Expenditure (%), 2008–2013 .................................................................................................................................... 66

Figure 18: Overview of Insurance Providers, Indonesia, Healthcare Inflation (%), 2008–2013 ........................ 67

Figure 19: Regulatory Landscape, Indonesia, Structure of the National Agency of Drug and Food Control, 2014 ............................................................................................................................................. 69

Figure 20: Regulatory Landscape, Indonesia, New Drug Market Authorization Process, 2014 ........................ 71

Figure 21: Regulatory Landscape, Indonesia, Generic Drug Market Authorization Process, 2014 ................... 73

Figure 22: Regulatory Landscape, Indonesia, Medical Device Approval Process, Indonesia, 2014 ................. 75

Figure 23: Regulatory Landscape, Indonesia, Licensing Process for Manufacturing, 2014 ............................. 76

Figure 24: Regulatory Landscape, Indonesia, Structure of the Directorate General of Intellectual Property Office, 2014 .................................................................................................................................. 78

Figure 25: Regulatory Landscape, Indonesia, Patent Approval Process, 2014 ............................................... 80

Figure 26: Regulatory Landscape, Indonesia, Clinical Trial Regulation Process, 2014 .................................... 82

Figure 27: Economic Indicators, Indonesia, GDP Per Capita ($), 2008–2013 ................................................. 93

Figure 28: Economic Indicators, Indonesia, GDP per Capita ($), Forecast, 2014–2020 .................................. 94

Figure 29: Economic Indicators, Indonesia, GDP Annual Growth (%), 2008–2013 .......................................... 95

Figure 30: Economic Indicators, Indonesia, GDP Annual Growth (%), Forecast, 2014–2020 .......................... 96

Figure 31: Economic Indicators, Indonesia, GNI per Capita ($), 2008–2013 ................................................... 97

Figure 32: Economic Indicators, Indonesia, Consumer Price Index, 2008–2013 ............................................. 98

Figure 33: Economic Indicators, Indonesia, Average Consumer Price Index, Forecast, 2014–2020 ................ 99

Figure 34: Economic Indicators, Indonesia, Average Consumer Price Index, Annual Change (%), 2008– 2013 ........................................................................................................................................... 100



Table of Contents

Figure 35: Economic Indicators, Indonesia, Average Consumer Price Index, Annual Change (%), Forecast, 2014–2020 .................................................................................................................................. 101

Figure 36: Economic Indicators, Indonesia, Currency Exchange Rate (IDR/$), 2008–2013 .......................... 102

Figure 37: Economic Indicators, Indonesia, Foreign Direct Investment ($bn), 2008–2013 ............................. 103

Figure 38: Economic Indicators, Indonesia, Foreign Exchange Reserves ($bn), 2008–2013......................... 104

Figure 39: Economic Indicators, Indonesia, Imports of Goods and Services ($bn), 2008–2013 ..................... 105

Figure 40: Economic Indicators, Indonesia, Exports of Goods and Services ($bn), 2008–2013..................... 106

Figure 41: Economic Indicators, Indonesia, Government Structural Balance ($bn), 2008–2013 .................... 107

Figure 42: Economic Indicators, Indonesia, General Government Gross Debt ($bn), 2008–2013 ................. 109

Figure 43: Economic Indicators, Indonesia, General Government Gross Debt ($bn), Forecast, 2014–2020 .. 110

Figure 44: Economic Indicators, Indonesia, Major Industries by GDP Share (%), 2012 ................................. 111

Figure 45: Demographics, Indonesia, Population (million), 2008–2013 ......................................................... 112

Figure 46: Demographics, Indonesia, Population (million), Forecast, 2014–2020 ......................................... 113

Figure 47: Demographics, Indonesia, Urban and Rural Population Share (%), 2008–2013 ........................... 114

Figure 48: Demographics, Indonesia, Urban and Rural Population Share (%), Forecast, 2014–2020 ........... 115

Figure 49: Demographics, Indonesia, Population Distribution by Age Group (%), 2008–2013 ....................... 116

Figure 50: Demographics, Indonesia, Population Distribution by Age Group (%), Forecast, 2014–2020 ....... 117

Figure 51: Demographics, Indonesia, Births (Per 1,000 Population), 2008–2013 .......................................... 118

Figure 52: Demographics, Indonesia, Mortality (Per 1,000 Population), 2008–2013...................................... 119

Figure 53: Demographics, Indonesia, Causes of Mortality (‘000), 2008 ........................................................ 120

Figure 54: Demographics, Indonesia, Children <5 Mortality Rate (Per 1,000 Live Births), 2008–2013 ........... 122

Figure 55: Demographics, Indonesia, Immunization Rate (%), 2008–2013 ................................................... 123

Figure 56: Demographics, Indonesia, Gender Ratio (M/F), 2008–2013 ........................................................ 124

Figure 57: Demographics, Indonesia, Life Expectancy at Birth (Years), 2008–2013...................................... 125

Figure 58: Demographics, Indonesia, Life Expectancy at Birth (Years), Forecast, 2014–2020 ...................... 126



Table of Contents

Figure 59: Demographics, Indonesia, Illiteracy by Age Group (%), 2008–2013 ............................................. 127

Figure 60: Demographics, Indonesia, School Enrollment by Age Group (%), 2012 ....................................... 128

Figure 61: Demographics, Indonesia, Unemployment (%), 2008–2013 ......................................................... 129

Figure 62: Demographics, Indonesia, Causes of Hospitalization (Per 100,000 Population), 2010 ................. 130

Figure 63: Demographics, Indonesia, DALYs (Per 100,000 Population), 2004 .............................................. 132

Figure 64: Healthcare Infrastructure, Indonesia, Public and Private Hospitals, 2008–2013 ........................... 134

Figure 65: Healthcare Infrastructure, Indonesia, Health Centers (‘000), 2008–2013 ..................................... 135

Figure 66: Healthcare Infrastructure, Indonesia, Hospitals by Type of Care, 2011 ........................................ 136

Figure 67: Healthcare Infrastructure, Indonesia, General Hospital Beds (‘000), 2008–2013 .......................... 137

Figure 68: Healthcare Infrastructure, Indonesia, Beds (Per 100,000 Population), 2008–2013 ....................... 138

Figure 69: Healthcare Infrastructure, Indonesia, Physicians (Per 100,000 Population), 2008–2013 .............. 139

Figure 70: Environmental Health, Indonesia, CO2 Emissions (Million Metric Tons), 2008–2013 .................... 141

Figure 71: Environmental Health, Indonesia, PM10 Emissions (µg/m3), 2008–2013 ..................................... 142

Figure 72: Environmental Health, Indonesia, Access to Protected Drinking Water, 2010 .............................. 143

Figure 73: Environmental Health, Indonesia, Waste Handling (%), 2008 ...................................................... 144

Figure 74: Healthcare Personnel, Indonesia, Nurses (Per 100,000 Population), 2008–2013 ......................... 146

Figure 75: Healthcare Personnel, Indonesia, Pharmacists, (Per 100,000 Population), 2008–2013 ................ 147

Figure 76: Healthcare Personnel, Indonesia, Dentists, (Per 100,000 Population), 2008–2013 ...................... 148

Figure 77: Healthcare Expenditure, Indonesia, Healthcare Expenditure (%), 2008–2013 .............................. 149

Figure 78: Healthcare Expenditure, Indonesia, Major Components (%), 2008 .............................................. 150

Figure 79: Healthcare Expenditure, Indonesia, Distribution (%), 2008–2013 ................................................. 152

Figure 80: Healthcare Market, Indonesia, Opportunities and Challenges, 2014 ............................................ 158



Introduction

2 Introduction

2.1 GlobalData Report Guidance

The report begins with an executive summary, which gives an overview of Indonesia’s

healthcare market and the key driving factors. It also gives a snapshot of the demographic,

regulatory and reimbursement landscape and the healthcare infrastructure.

Chapter three provides an overview of Indonesia’s pharmaceutical and medical device

markets, covering size; generic, Over-The-Counter (OTC) and biologic/biosimilar product

shares; and the key drivers and barriers. It also includes profiles of the major players, as well

as SWOT assessments.

Chapter four covers the reimbursement and payer landscape and includes details of the

reimbursement process, insurance providers, pricing policies and drug price trends in

Indonesia. It also looks at the regulatory landscape and gives an overview of the regulatory

agencies and approval processes for new drugs and medical devices. Also covered is the

licensing process for the manufacture, export and import of pharmaceuticals; regulations for

pharmaceutical advertising, labeling, packaging and clinical trials; and an overview of

intellectual property rights.

Chapter five provides detailed analysis of the political and economic environment in Indonesia

and analyzes economic indicators, demographics and healthcare infrastructure and

expenditure.

Chapter six gives an overview of the opportunities for and challenges to growth in the country’s

healthcare market.



Overview of Pharmaceutical and Medical Device Markets

3.1.4 Major Drug Classes

In 2007, based on drug sales, the major drug classes were antibiotics (XX%), respiratory drugs

(XX%), neuromuscular drugs (XX%), vitamins and minerals (XX%) and dermatological drugs

(XX%).

Figure 7: Pharmaceutical Market, Indonesia, Major Therapeutic Areas (%), 2005

Antibiotics

Respiratory drugs

Neuromuscular drugsVitamins and minerals

Dermatological drugs

Other drug classes

Source: KADIN, 2007

Table 7: Pharmaceutical Market, Indonesia, Major Therapeutic Areas (%), 2005

Therapeutic area Share

Antibiotics

Respiratory drugs

Neuromuscular drugs

Vitamins and minerals

Dermatological drugs

Other drug classes

Source: KADIN, 2007



Country Analysis

5.3.3 Inflation

5.3.3.1 Consumer Price Index

The Consumer Price Index (CPI) measures changes in the price level of consumer goods and

services purchased by households, and the annual percentage change is used as a measure of

inflation. In 2008, Indonesia reported an annual CPI of XX, which rose to XX at the end of 2013.

The continuous increase in CPI indicates the acceleration of prices in a fixed basket of goods and

services. A high rate of inflation has been observed in food, textiles, gas and fuel, electricity,

education, and housing.

The IMF estimates it to reach XX in 2014 and XX in 2018, and to rise further to XX in 2020.

Figure 32: Economic Indicators, Indonesia, Consumer Price Index, 2008–2013

2008 2009 2010 2011 2012 2013

CP

I

CAGR (2008–2013): XX%

Source: IMF, 2013d



Country Analysis

5.4 Demographics

5.4.1 Population

In 2013, Indonesia’s population stood at XX million, making it the fourth most populated country in

the world behind China, India, and the US.

Indonesia covers an area of approximately XXkm2 (XX km2 land and XX km2 water) giving an

average population density of XX/km2. In 2008, the population was approximately XX million, which

reached XX million in 2013 and is expected to increase further to XX million in 2020.

Figure 45: Demographics, Indonesia, Population (million), 2008–2013

2008 2009 2010 2011 2012 2013

Pop

ulat

ion

(milli

on)

CAGR (2008–2013): XX%

Source: IMF, 2013h

Table 42: Demographics, Indonesia, Population (million), 2008–2013

Year 2008 2009 2010 2011 2012 2013

Population

Source: IMF, 2013h



Country Analysis

5.5.1.5 General Hospital Beds

In 2008, there were XX general hospital beds per XX population (including all full-time and

home-care hospital beds) available in the public sector (XX beds per XX population), and the

private sector (XX beds per XX population). The number of general hospitals beds increased to

XX in 2013, of which XX beds per XX population were in the public sector and XX beds per XX

population were in the private sector.

Figure 67: Healthcare Infrastructure, Indonesia, General Hospital Beds (‘000), 2008–2013

2008 2009 2010 2011 2012* 2013*

Bed

s (p

er 1

00,0

00 p

opul

atio

n)

PublicPrivate

Source: MoHRI, 2011 *Estimated value

Table 64: Healthcare Infrastructure, Indonesia, General Hospital Beds (‘000), 2008–2013 Year 2008 2009 2010 2011 2012* 2013*

Public

Private

Source: MoHRI, 2011 *Estimated value



Appendix

7 Appendix

7.1 Abbreviations

AIDS: Acquired Immune Deficiency Syndrome

AMDD: ASEAN Medical Device Directive

API: Active Pharmaceutical Ingredient

ASEAN: Association of Southeast Asian Nations

CAGR: Compound Annual Growth Rate

CNS: Central Nervous System

COPD: Chronic Obstructive Pulmonary Disease

CPI: Consumer Price Index

CRO: Clinical Research Organization

DALY: Disability-Adjusted Life Year

DGIP: Directorate General of Intellectual Property

DHO: District Health Office

DOTS: Directly Observed Treatment Short course

DP: Partai Demokrat (Democratic Party)

DPD: Dewan Perwakilan Daerah (Regional Representative Council)

DPR: Dewan Perwakilan Rakyat (People’s Representative Council)

DPT: Diphtheria, Pertussis and Tetanus

DVA: Drug Variation Application

FDI: Foreign Direct Investment

GCP: Good Clinical Practices

GDP: Gross Domestic Product

GMP: Good Manufacturing Practice



Appendix

GNI: Gross National Income

HIV: Human Immunodeficiency Virus

IHD: Ischemic Heart Disease

IMA: Indonesian Medical Association

IMF: International Monetary Fund

IPA: Indonesian Pharmaceutical Association

IPMG: International Pharmaceutical Manufacturers Group

IPR: Intellectual Property Rights

IRB: Institutional Review Board

JKN: Jaminan Kesehatan Nasional

MAA: Marketing Authorization Application

MDPWG: Medical Device Product Working Group

MDR: Multi Drug Resistance

MNC: Multinational Company

MoHRI: Ministry of Health, Republic of Indonesia

MPR: Majelis Permusyawaratan Rakya (People’s Consultative Assembly)

NA-DFC: National Agency of Drug and Food Control

NAFED: National Agency for Export Development

NDA: New Drug Application

NLEM: National List of Essential Medicines

OECD: Organization for Economic Cooperation and Development

OOP: Out-of-Pocket

OTC: Over-the-Counter

PKH: Program Keluarga Harapan (Family Hope Program)



Appendix

PM10: Particulate Matter < 10 micrometers

TB: Tuberculosis

TB-CAP: Tuberculosis Control Assistance Program

TRIPS: Trade-related Aspects of Intellectual Property Rights

USAID: United States Agency for International Development

7.2 Bibliography

ASEAN (2011). Labeling and Packaging Regulations. Association of Southeast Asian Nations.

Available from: http://www.asean.org/20605.pdf

BPS (2014a). Percentage distribution of gross domestic product at current market prices by

industrial origin. Central Bureau of Statistics (Badan Pusat Statistik). Available from:

http://www.bps.go.id/eng/tab_sub/view.php?kat=2&tabel=1&daftar=1&id_subyek=11&notab=5

[Accessed February 2, 2014]

BPS (2014b). Illiteracy rate by Age Group. Central Bureau of Statistics (Badan Pusat Statistik).

Available from:



BPS (2014c). Education Indicators. Central Bureau of Statistics (Badan Pusat Statistik).

Available from:



BPS (2014d). Number of Labor Force, Labor, Unemployment, TPAK dan TPT. Central Bureau

of Statistics (Badan Pusat Statistik). Available from:



BPS (2014e). Health Indicators. Central Bureau of Statistics (Badan Pusat Statistik). Available

from:





Appendix

USAID (2009). Pharmacy Regulation, United States Agency for International Development.

Available from: http://pdf.usaid.gov/pdf_docs/PNADQ842.pdf

US Department of State (2014). Bureau of East Asian and Pacific Affairs. US Department of

State. Available from: http://www.state.gov/p/eap/index.htm [Accessed February 25, 2014]

US Census Bureau (2014a). Population. US Census Bureau. Available from:

http://www.census.gov/population/international/data/idb/country.php [Accessed January 20,

2014]

UNCTAD (2011). Development Dimensions of Intellectual Property in Indonesia. United

Nations Conference on Trade and Development. Available from:

http://unctad.org/en/Docs/diaepcb2011d6_en.pdf

WHO (2005). Counterfeit Medicines. World Health Organization. Available from:

http://www.who.int/medicines/services/counterfeit/impact/ImpactF_S/en/index1.html [Accessed

January 23, 2014]

WHO (2009). Disability Adjusted Life Years. World Health Organization. Available from:

http://www.who.int/healthinfo/global_burden_disease/en/ [Accessed January 22, 2014]

WHO (2011). Causes of Mortality. World Health Organization. Available from:

http://apps.who.int/ghodata/?vid=10011. [Accessed January 22, 2014]

7.3 Research Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with

advanced statistical expertise and marketing, market research and consulting backgrounds in the

pharmaceutical industry.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and

Strategic and Competitive Intelligence Professionals (www.scip.org).

All GlobalData databases are continuously updated and revised. The following research

methodology is followed for all databases and reports.



Appendix

7.3.1 Coverage

The objective of updating GlobalData’s coverage is to ensure that it represents the most up-to-date

vision of the industry possible.

Changes to the industry taxonomy are built on the basis of extensive research of company,

association and competitor sources.

Company coverage is based on three key factors: revenue; products; and media attention,

innovation and market potential.

The estimated revenue of all major companies, including private and governmental, are

gathered and used to prioritize coverage.

Companies that are making the news or are of particular interest due to their innovative

approach are prioritized.

GlobalData aims to cover all major news events and deals in the pharmaceutical industry, updated

on a daily basis.

The coverage is further streamlined and strengthened with additional input from GlobalData’s

expert panel (see below).

7.3.2 Secondary Research

The research process begins with extensive secondary research using internal and external

sources to gather qualitative and quantitative information relating to each market.

The secondary research sources that are typically referred to include, but are not limited to:

Company websites, annual reports, financial reports, broker reports, investor presentations and

SEC filings

Industry trade journals, scientific journals and other technical literature

Internal proprietary databases

Relevant patent and regulatory databases

National government documents, statistical databases and market reports

Procedure registries



Appendix

News articles, press releases and web-casts specific to the companies operating in the market

The CountryFocus reports are largely based on secondary research and use reliable and

authoritative sources such as the IMF, the World Bank, OECD, WHO, UNICEF, UNStats, BEA,

MHLW and NHS, among others.

7.3.3 Forecasts

The CountryFocus reports use the data available from the secondary sources to forecast and

validate the future trends for a country’s healthcare market, as well as parameters related to the

economy and healthcare infrastructure and expenditure.

7.3.4 Expert Panel

GlobalData uses a panel of experts to cross-verify its databases and forecasts.

GlobalData’s expert panel comprises marketing managers, product specialists, international sales

managers from pharmaceutical companies, academics from research universities, consultants from

venture capital funds, and distributors/suppliers of pharmaceuticals and supplies.

Historic data and forecasts are relayed to GlobalData’s expert panel and adjusted in accordance

with their feedback.

7.4 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.

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