Indonesia's Rx and OTC drugs market to grow to $7.8 billion in 2019

Business Monitor International's Business Environment Rating matrix for the first quarter of 2010 shows that Indonesia moves down one place to occupy 13th out of the 15 regional markets surveyed in the Asia Pacific region. The main drawbacks to investment include corruption, low per-capita spending on pharmaceuticals and a small proportion of the elderly in the country.

However, factors such as annual growth of its pharmaceutical market, together with rising population numbers and a relatively solid political and economic base, should continue to attract multinationals to the country. BMI therefore envisage that turnover of pharmaceutical products will increase over the next 10 years, with sales of prescription drugs and over-the-counter (OTC) medicines expected to grow from $2.79 billion in 2008 to $7.80 billion in 2019, thus representing compound annual growth rates (CAGRs) in local currency terms of 7.99% and 9.14% for 2009-14 and 2014-19, respectively.

As part of efforts to expand domestic pharmaceutical manufacturers' market potential, Indonesia's Pharmaceutical Association, GP Farmasi, announced that the domestic pharmaceutical sector hoped to establish foreign-owned factories locally by cooperating with drug manufacturers from within the Association of Southeast Asian Nations (ASEAN) members. The aim is to establish an industrial base for raw materials in Indonesia. Data produced by GP Farmasi shows that the market value for pharmaceutical products in the ASEAN region could rise to $8 billion by the end of 2009, compared with $7 billion in 2008.

Developments in AIDS/HIV drug provision

Meanwhile, the National AIDS Commission announced that, in order to guarantee a continuous supply of antiretroviral (ARV) drugs for patients with HIV/AIDS, Indonesia will in future receive donations in the form of drugs instead of cash payments. The new arrangement has been secured with the Global Fund for AIDS, Tuberculosis and Malaria. For 2009, the Ministry of Health has earmarked 39 billion rupiah ($41.24 million) to help fight the spread of the disease and to provide free ARV treatment. For its part, the global fund has committed 22 billion rupiah ($23.26 million) for the same program.

Other regional news

Elsewhere, Singapore-based drug development company Innogene Kalbiotech announced that it had signed a Memorandum of Understanding with a Malaysian clinical research organization, Info Kinetics Sdn Bhd, to provide accredited bioavailability and bioequivalence studies in Indonesia. Both companies have entered into a joint venture agreement to establish PT Pharma Kinetics, which will be based in a hospital in Jakarta, Indonesia. The company's operations will be supported by PT Pharma Metric Labs, an Indonesian-based BA/BE research organization set up by Innogene in 2005.

In other developments, BMI notes, US-based Bristol-Myers Squibb announced that it had sold certain Asian assets to Japan's Taisho Pharmaceuticals, which bought select OTC and consumer health products in Indonesia, Thailand and the Philippines, as well as certain other Asia Pacific countries. The medicines included Tempra (paracetamol), Counterpain (piroxicam + methyl salicylate + menthol + eugenol), Theragran (multivitamins), Engran (multivitamins), Ceetrus (ascorbic acid) and the Keri moisturiser range.