In a Presidential Instruction dated 8 June 2016, the Indonesian President made clear his intention to increase the availability of affordable drugs through foreign investment and incentives to the pharmaceutical sector.
To attract this investment, the government has also removed the manufacture of active pharmaceutical materials (APIs) from the list of negative foreign investment. Furthermore, the promotion of raw pharmaceutical material production was included in the 11th Economic Stimulus Package of 2016.
These initiatives are intended to support the nationwide health insurance plan (Jaminan Kesehatan Nasional or National Health Insurance) started in 2014. By boosting affordability, the government hopes to counter the growing deficit currently encountered by the National Health Insurance system.
Perhaps a notable example of this new government initiative occurred in October last year, when state-owned pharmaceutical company Kimia Farma announced a deal with South Korea’s Sungwun Pharmacopia to build a facility for the production of raw materials, including Simvastatin, Atorvastatin, Rosuvastatin, Pantoprazole, Esomeprazole, Rabeprazole, Clopidogrel and Sarpogrelate.
In addition to meeting local demand, it is expected that these products will be exported to Korea, Japan and the USA. Certain generic-friendly provisions of the new patent law also appear to be in line with these initiatives.
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