Boston, MA -- (ReleaseWire) -- 09/05/2012 -- BMI View: The government's aim to create proper universal healthcare coverage is unlikely to be realised in the short term but would create investors' interest in the country. We highlight some of the beneficiaries such as local generic drug manufacturers and medical devices suppliers. Given the country's low per capita pharmaceutical and healthcare expenditure, it presents significant opportunities for drugmakers over the long term as an expected improvement in its economy will help to boost spending on healthcare.
Headline Expenditure Projections
- Pharmaceuticals: IDR53,041bn (US$6.04bn) in 2011 to IDR58,727bn (US$6.38bn) in 2012; +10.7% growth in local currency terms and +5.6% in US dollar terms. Growth rates broadly unchanged from previous quarter.
- Healthcare: IDR193,6010bn (US$22.06bn) in 2011 to IDR221,373bn (US$24.06bn) in 2012; +14.3% growth in local currency terms and +9.1% in US dollar terms. Growth forecast upgraded due to receipt of new historic data.
- Medical devices: IDR5,721bn (US$652mn) in 2011 to IDR6,294bn (US$684mn) in 2012; +10.0% growth in local currency terms and +5.0% in US dollar terms. Growth forecast upgraded but absolute numbers were readjusted downwards due to new historic trade figures.
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Risk/Reward Rating: Indonesia is ranked 11th out of the 18 Asia Pacific markets in BMI's Q312 Pharmaceutical and Healthcare Risk/Reward Ratings (RRRs). This is a rise from 13th in Q212 as there was an improvement to its Industry Rewards score and declines in the same category for Thailand and the Philippines, bringing their overall rating downwards.
Key Trends And Developments
- In May 2012, Pfizer Indonesia director Widyaretna Buenastuti told the Jakarta Post the company intends to expand in the generic drug market in Indonesia and increase its market share. The company will invest US$3mn to expand its factory capacity. Pfizer Indonesia is in discussions with the National Agency of Drug and Food Control/Badan Pengawas Obat dan Makanan (NADFC/BPOM) to implement its plan by the end of 2012. The company is seeking expansion ahead of the introduction of the government's social security system to roll out more health insurance.
- In March 2012, Kimia Farma signed an agreement with Prakarsa Transforma Indonesia to establish a subsidiary called Kimia Farma Hospital. Kimia Farma will own a 60% stake in the new commercial entity. The first hospital is expected to be completed by the end of 2013 and the subsidiary will build at least five more.
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