Indonesian Pharmaceutical Market Sees Rapid Expansion

Driven by increased government healthcare spending and growing life expectancy, the Indonesian pharmaceutical market value will climb from approximately $5 billion in 2013 to $9.9 billion by 2020, at a Compound Annual Growth Rate (CAGR) of 10.2%, forecasts research and consulting firm GlobalData.

According to the company’s latest report, CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – Indonesia, this growth is due to the introduction of government healthcare reimbursement programs, such as Jamkesmas and the Family Hope Program. Their aim is to provide health insurance to all Indonesians by 2019.

Joshua Owide, GlobalData’s Director of Healthcare Industry Dynamics, says, “Patented drugs account for the majority of the Indonesian pharmaceutical market. Therapeutic segments, such as infectious and respiratory diseases, are expected to grow significantly in the future, thanks to the increasing incidence of certain communicable diseases. The generic market is also undergoing rapid expansion, boosted by government incentives and the loss of patent protection for several high-selling products. The over-the-counter drug sector reached a 48% share of the pharma market in 2013.”

However, the increasing use of generics, coupled with counterfeit medicines, could slow down the Indonesian pharmaceutical industry expansion. According to Owide, the country’s regulatory system for Intellectual Property (IP) enforcement is problematic on a number of levels, due to inadequate observation and enforcement, and the lack of an effective customs recordal system to discourage infringement of IP rights.

“Non-efficient and non-transparent IP protection for pharmaceutical products and medical devices leaves major loopholes in Indonesia’s healthcare system. Infringement is common, and penalties include imprisonment for up to seven years and/or a significant fine, but only minor charges are imposed in practice,” said Owide.

This report provides information and analysis on the healthcare, regulatory and reimbursement landscape in Indonesia. It identifies key trends in the Indonesian healthcare market and provides insights into the demographic, regulatory and reimbursement landscape and healthcare infrastructure. This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts.

GlobalData is a leading global research and consulting firm offering advanced analytics to help clients make better, more informed decisions every day. Our research and analysis is based on the expert knowledge of over 700 qualified business analysts and 25,000 interviews conducted with industry insiders every year, enabling us to offer the most relevant, reliable and actionable strategic business intelligence available for a wide range of industries. For more information, visit