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Indonesia: A lucrative market

Indone­sia has a decent-sized and fast-growing OTC, Med­ical Device and Pharma mar­ket that had an esti­mated value of approx­i­mately US $6.25 billion in 2012. Its large pop­u­la­tion and rel­a­tively pow­er­ful pro­duc­tion base give Indonesia the poten­tial to become an even more lucra­tive OTC, Pharma and Med­ical Device mar­ket in the future.

Indone­sia has a strong generic drugs sec­tor that accounts for 80% of the entire Rx mar­ket, of which Rx and OTC prod­ucts make up 70% and 30%, respec­tively. In recent years, the OTC seg­ment has exhib­ited a steady growth, attribut­ed to the increas­ing amount of self-medication and acces­si­bil­ity to more affordable drugs. Add in the sheer size of its pop­u­la­tion, and you know:
Indone­sia sim­ply cannot be dis­missed.

Of the 200-300 drug com­pa­nies that oper­ate in the Indone­sian mar­ket, approx­i­mately 40 are foreign-owned, and there are numer­ous food sup­ple­ment, cos­metic and med­ical rem­edy play­ers. Of the over­all phar­ma­ceu­ti­cal mar­ket in Indone­sia, for­eign drug-mak­ers con­sti­tute around 30%. Despite con­cerns about coun­ter­feit­ing and the low efficacy of generic prod­ucts, the IP pro­tec­tion and GMP man­u­fac­tur­ing stan­dards in Indone­sia are improv­ing with effective national reg­u­la­tions, for­eign invest­ments and joint ventures with multi-national com­pa­nies. A lim­ited num­ber of for­eign chain phar­ma­cies can be found in most major cities in Indonesia; these include Guardian, Wat­sons and Cen­tury Healthcare. There are also many pri­vately owned local phar­ma­cies (apotik). One of the bet­ter privately owned chains is Apotik Melawai, which is based in Jakarta.

The National Agency of Drug and Food Con­trol (NA-DFC) is respon­si­ble for the reg­u­la­tion of phar­ma­ceu­ti­cal prod­ucts and drugs in Indone­sia. The pri­mary duties of the NA-DFC include pre-market eval­u­a­tions, leg­is­la­tion, reg­u­la­tion, stan­dard­isa­tion and GMP certification of med­ical prod­ucts.

A drug reg­is­tra­tion appli­ca­tion can only be under­taken by phar­ma­ceu­ti­cal com­pa­nies located in Indone­sia, and this must go through a pre-registration process, which can take up to 40 work­ing days. This process involves a con­sul­ta­tion on the com­ple­tion of a reg­is­tra­tion dossier, as well as paying doc­u­ment and reg­is­tra­tion fees. Companies based out­side Indone­sia need to find a good local part­ner they can trust to con­duct the reg­is­tra­tion process on their behalf.