ANNOUNCEMENT 27 Feb 2017

On 27 February 2017, the Indonesian Ministry of Health issued regulation 17/2017 introducing an action plan to push the local pharmaceutical and medical equipment industries.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 28 Feb 2017 | Removal date: open ended
Still in force

Local sourcing

The regulation includes the provision that the pharmaceutical and medical equipment industries shall prioritise the use of local raw materials (article 6(1)).

There are no clear rules on what percentage the local content requirements shall be set. However, there are some indications in the appendix of the regulation: for instance, during the research and development stage, the content shall be at least 25% (p.82). In the production process, the content shall be at least 35%.

Furthermore, the regulation mentions reducing the current import market share from 94% to 45% by 2035 (p.79).

In general, the pharmaceutical industry shall be developed using three strategies:

  1. "Reverse Engineering (Observe, Imitate, Modify)
  2. Joint Venture (transferring technology)
  3. Pioneer Research" (own translation; p.79 of the regulation)

The regulation came into force on 28 February 2017.

AFFECTED SECTORS

 
Inception date: 28 Feb 2017 | Removal date: open ended
Still in force

Public procurement localisation

Article 6(2) of the regulation also stipulates that the provision of pharmaceutical goods and medical equipment by the government or by private entities for the needs of the community shall prioritise those goods that use local raw materials.

There are no clear rules on what percentage the local content requirements shall be set. However, there are some indications in the appendix of the regulation: for instance, during the research and development stage, the content shall be at least 25% (p.82). In the production process, the content shall be at least 35%.

Furthermore, the regulation mentions reducing the current import market share from 94% to 45% by 2035 (p.79).

In general, the pharmaceutical industry shall be developed using three strategies:

  1. "Reverse Engineering (Observe, Imitate, Modify)
  2. Joint Venture (transferring technology)
  3. Pioneer Research" (own translation; p.79 of the regulation)

The regulation came into force on 28 February 2017.