Expansion of product portfolio by major pharmaceutical companies and increase in demand for generic drugs were the key factors driving growth in Indonesia pharmaceutical Market.
The report titled “Indonesia Pharmaceutical Market Outlook to 2022 – By Therapeutic Segment (Anti-Infectives, Gastrointestinal and Metabolism, Cardiovascular System, Central Nervous System, Respiratory, Musculoskeletal, Dermatology, Genitourinary and Hormones, Blood, Oncology), By Domestic and International Players, By Generic and Patent Drugs, By OTC & Prescription Drugs, By Region” by Ken Research suggested a growth at a CAGR of 10.0% in revenue in Indonesia Pharmaceutical Market by 2022.
Indonesia healthcare market has observed a favorable growth in the last 5 years. The market is still under penetrated especially in the tier 2 areas in Indonesia as of 2017.
The launch and execution of JKN scheme by the government has led to surge in demand for primary healthcare facilities and increased generic drug sale. The market has underscored various deregulation programs which has stimulated foreign investment in the industry.
Indonesia Pharmaceutical market is dominated by domestic players which controlled majority of the market in 2017. Recent favorable government regulations have facilitated the entry of foreign players in the space. There are 206 pharmaceutical companies (182 domestic and 24 international companies) located in Indonesia.
The market is driven by deregulation in FDI regulations in pharmaceutical and favorable government policies leading to increase in sale of generic drugs. Increased investment in innovation of new drugs with higher margin led to increased profitability of pharmaceutical companies. Expansion of major companies through mergers, acquisitions and alliances has enabled companies to manufacture high end medicines and pharmaceutical products.
The local companies largely focus on generic drugs manufacturing that are dependent on imported active pharmaceutical ingredients (API), mainly from China and India.
As Jaminan Kesehatan Nasional (JKN) has prioritized the use of generic drugs, the demand for unbranded generic drugs has grown as Indonesians increasingly rely on generic drugs. This has augmented the domestic players’ sales. But at the same time, the market has also witnessed an increase in number of new players which has driven down the margins. Since the product portfolio of majority domestic pharmaceutical companies is dominated by generic drugs, the sales have gone up since 2014. Moreover, the prices of generic drugs are regulated and consistent across Indonesia whereas the prices increase by 10% for branded drugs annually. Domestic players have witnessed success in rural areas of Indonesia. Due to inaccessibility and language barrier existing in the rural areas, the domestic players have been better able to bridge the gap as compared to international players. The domestic players have also dominated the Over the Counter drugs which are driven by the increasing self medication behavior of the population. Domestic players dominate the Anti-Infectives, Gastrointestinal and metabolism and respiratory therapeutic segments.
Indonesia biopharmaceutical industry is in the nascent stage. There is a strong interest from research-based global biopharma companies to conduct clinical research in Indonesia because of the large concentrated patient populations and disease profiles. Furthermore, as the industry intends to move towards self sufficiency, Indonesian government released the 11th economic stimulus package with the aim of boosting the domestic production of medicines’ raw materials, particularly for five product categories namely biotechnology, vaccines, herbal extracts, active pharmaceutical ingredients and medical devices.
In order to tap the existing potential, large domestic pharmaceutical companies have tied up with international players to manufacture biopharmaceutical products for the treatment of chronic diseases such as cancer, kidney failure and others
ProBioGen AG, a CDMO based in Germany, and Bio Farma, a state-owned vaccine manufacturer in Indonesia, has signed an agreement to develop a biosimilar to the monoclonal antibody (mAb) trastuzumab for cancer treatment that will be produced in Indonesia.
Kalbe Farma has also launched biosimilar version of insulin in Indonesia to treat diabetes mellitus which is 38% cheaper than the existing insulin. Biosimilars are cheaper imitations of drugs known as biologics.
Kalbe Farma set up its biological drug factory, PT Kalbio Global Medika in Cikarang, Bekasi, with an investment value that ranges between USD 30 to USD 35 million. The factory is built under the joint venture between Kalbe and a South Korean pharmaceutical company Genexine Inc, PT Kalbe-Genexine Biologics
Key Topics Covered in the Report:
Indonesia Dietary Vitamin Supplements Market
Pharmaceutical Market Size Indonesia
Indonesia Vaccine Market
Indonesia Pharmaceutical Regulations
Number of Pharmaceutical Companies Indonesia
Indonesia Pharmaceutical Market Players
Obese Population Indonesia
Generic Drug Market Size Indonesia
Number of Healthcare Centers in Indonesia
Budget Allocation on Healthcare Indonesia
Healthcare Spending Indonesia
Vitamin and Dietary Supplement Market Indonesia
For more information on the research report, refer to below link:
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Ankur Gupta, Head Marketing & Communications