IPMG Online

The pharmaceutical industry, particularly in Indonesia, faces several challenges. The first is that 95% of raw materials for medicines are still imported, placing a financial burden on producers—exacerbated by fluctuations in the Rupiah's exchange rate against foreign currencies.

Data from the Ministry of Industry indicates that the import value of raw materials for the Chemical, Textile, and Miscellaneous Industries (IKTA) sector reaches US$30 billion annually, while imports for the chemical and pharmaceutical industries amount to US$20 billion per year.

The second challenge involves a payment deficit of IDR 3.5 trillion owed by the Social Security Agency (BPJS) to pharmaceutical wholesalers and medical device distributors—payments channeled through hospitals participating in the National Health Insurance-Healthy Indonesia Card (JKN-KIS) scheme. Although the government injected IDR 10 trillion in funds, this amount did not immediately reach the pharmaceutical industry.

Hospitals inevitably utilize such funds to cover employee salaries or patient meals. "Only about 6–10% of that IDR 10 trillion aid actually goes to pharmaceutical companies," stated Tirto Kusnadi, Chairman of the Indonesian Pharmaceutical Companies Association (GPFI).

To address these challenges and ensure the sustainable growth of the national pharmaceutical industry, the International Pharmaceutical Manufacturers Group (IPMG) believes that investment in research and development (R&D) and industrial raw materials represents an opportunity the government should maximize. This is particularly relevant given that the industrial raw materials sector has been designated a top priority in the Pharmaceutical Industry Roadmap.

IPMG advocates for collaboration between the government and the private sector to jointly tackle the challenges hindering pharmaceutical industry players.

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