Health Team

Indonesia’s pharmaceutical market is ranked the largest market in the ASEAN regions, with the market value expected to hit IDR 141.6 trillion (USD 10.11 billion) by 20211. The Universal Healthcare Coverage (UHC) program or The “Jaminan Kesehatan Nasional (JKN)" is one of the tools to speed up Indonesia’s pharmaceutical market since 2016 with the aim to protect more than 260 million Indonesians through healthcare insurance which by April 1, 2019 already covers 219.7 mio (84%) population. Historically, Indonesia pharmaceutical drug consumption has had one of the lowest rates in Asia. However, since the introduction of JKN, the amount of pharmaceutical market share is expected to hike.

Like the pharmaceutical sector, the medical device market grew indirectly through implementation of JKN since the increased need for more diagnostic tests, equipment, electro medics (eg. USG machine) and higher use of consumables. The medical device industry in 2016 valued at IDR 10.2 trillion and expected to reach almost 18 percent in 20192. Nevertheless, Indonesia is highly dependent on foreign medical device companies to meet local demand. Imports (up to 92%3) are mostly medium-high technology medical devices, while exports are mostly disposable medical devices.

Domestic production from local companies focuses on basic hospital and disposable items such as gloves, surgical sutures, and contact lenses, as well as for medical device suppliers are still dominated by companies from Europe, Asia, and the United States.

With such growing market opportunities and it is predicted to rise, Indonesia Government should be able to encourage domestic industries to produce locally manufactured medical devices and establish synergic cooperation with business actors to significantly boost the enlargement export of pharmaceutical and medical devices. According to data from the Indonesia medical device/laboratory company association or the GAKESLAB (Gabungan Perusahaan Alat Kesehatan & Laboratorium Indonesia), medical equipment especially nontechnology products could be a huge potential market product to be produced in Indonesia. Despite the constraints, Indonesia Government has intended to try to synchronize those hurdles by providing ease of regulations to support better national healthcare services.

Health Team Leader:
Masayu Octora
Trade Advisor
masoct@um.dk
+62 818 885 756