Boston, MA -- (ReleaseWire) -- 04/09/2014 -- The launch of the universal healthcare system in Indonesia is generally positive for pharmaceutical firms, particularly domestic firms that commercialise generic drugs.
We maintain that the rollout of the scheme will be challenging, given logistical and human resources issues in the country. We also note that while companies can expect to generate revenues as a result of the scheme's rollout, the operating environment holds risks, such as the weakened rupiah and political uncertainties.
Headline Expenditure Projections
- Pharmaceuticals: IDR63,806bn (US$6.11bn) in 2013 to IDR69,463bn (US$5.87bn) in 2014; +8.9% growth in local currency terms and -3.9% in US dollar terms.
- Healthcare: IDR248,149bn (US$23.75bn) in 2013 to IDR274,173bn (US$23.17bn) in 2014; +10.5% growth in local currency terms and -2.5% in US dollar terms.
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In our latest Q214 proprietary Pharmaceutical Risk/Reward Rating (RRR) ratings, Indonesia ranks 13th out of the 19 Asia Pacific markets. Though its Rewards are considered to be above than the regional average, Indonesia's Risks profile is considerably more unfavourable, which will continue to detract foreign players from investing in the country's pharmaceutical market.
Key Trends And Developments
- In March 2014, Pfizer Indonesia, a subsidiary of US drugmaker Pfizer, announced its intention to increase production capacity of solid oral medicines by 76% at its expanded factory in Pasar Rebo, Indonesia. Pfizer's Operational Director Lukman Hidayat said: 'With the new expanded factory, the company will be able to increase production from 170mn pills to 300mn pills a year'. Pfizer Global Supply, an affiliate of Pfizer that operates the factory, exports 20% of its products to international Asian markets such as South Korea, Hong Kong, Thailand, Vietnam, the Philippines, Malaysia and Singapore, and sells its remaining products on the domestic market.
- In February 2014, the US Agency for International Development (USAID) and US medical technology company Becton Dickinson (BD) entered a partnership agreement to strengthen tuberculosis (TB) reference laboratories in Indonesia. Under the agreement, the partners will support the National Tuberculosis Program (NTP) and focus on improving and expanding laboratory services in the country. The collaboration will primarily focus on early detection of TB cases and monitoring and treatment services.
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