Pharma in Indonesia: Competing for Higher Margins

Concurrently, Indonesia's largest pharmaceutical company, Kalbe Farma, is shifting from being a maker of generic drugs to a high-tech pharma developer. Besides producing cancer drugs, Kalbe has been investing in R&D on stem cell therapies. Significantly, a lack of generic substitutes in these fields in Indonesia implies no government-set price ceilings, and therefore these products offer higher margins.

In fact, there are more than 200 drugmakers in Indonesia, most of which produce only low-margin generics. While they control 95% of the market by volume, they have a combined 75% share in value terms. Therefore the few multinationals operating in the country have been able to make more profits because of their focus on high-value products.

Such activities are taking place while Indonesian President Joko Widodo is pushing its universal health care program to cover the country's projected population of 270 million by 2019, a leap from the 170 million currently covered. This year for the first time, government expenditures on health care reached the legally mandated 5% of the state budget. Health care spending is expected to grow 12% every year through 2020.

To join the discussion on all developments in this industry sign up for CPhI South East Asia and its LinkedIn group. CPhI is the must-attend pharma event in Indonesia comprising of a trade show and state of the art conference where the regional industry meets to leverage connections, knowledge and insight to spur business. Launched 6 years ago, the next edition takes place during 22-24 March 2017 at JIExpo in Jakarta. Workshops and exhibitors' presentations will add into the mix, and will complement the 3 days together with a business matchmaking platform.

Contact:

Ivan Ferrari
Phone Number: +62 21 2930 5959
Email: [email protected]

Photo - http://photos.prnewswire.com/prnh/20161102/435218

SOURCE CPhI South East Asia