What is the Potential of Indonesia
Healthcare Market?
Indonesia
Healthcare Market has shown a
positive incline during 2012-2017 but with respect to the expanding population
of Indonesia, the market is still underserved especially in the underdeveloped
and rural areas as of 2017. People across Indonesia are facing several health
care issues due to sedentary lifestyle and fast food consumption habits, such
as obesity, diabetes, and other cardiovascular diseases, which are demanding
for technologically advanced healthcare infrastructure. The healthcare market
has increased on the account of increasing healthcare facilities, innovation in
pharmaceutical manufacturers and clinical laboratory services and expansion of
pharmacy retail chains across the country. The market has witnessed innovation
in nutritional health segment, biopharmaceuticals and specialty pharmaceutical
products.
Hospitals
in the country contributed to the maximum share of overall healthcare market as
of 2016. Over ~% of the market revenues were generated from the hospitals
segment followed by the pharmaceutical market with ~% in 2017.
Indonesia
Healthcare market revenue has increased from USD ~ billion in 2012 to USD ~
billion in 2017 primarily due to rising prevalence of non-communicable and
lifestyle diseases including diabetes, asthma and heart disorders. The industry
has undergone various deregulation programs which has encouraged foreign
investment in the industry. Furthermore, increase in demand for generic
medicines has led the major players in the industry to expand their production
capabilities.
How Has the JKN Scheme Impacted the
Indonesia Pharmaceutical Market?
The
market size of Indonesia pharmaceutical industry has increased from USD ~
million in 2012 to USD ~ million in 2017 at a CAGR of ~%. The market is in the
growing stage supported by favorable government regulations and entry of
foreign players in the space.
During
2017, the domestic players dominate the market with major focus on production
of generic drugs. This is driven by the implementation of universal healthcare
system. The program has led to an increased demand for generic medicines from
public and private hospitals participating in the program.
Further,
the industry witnessed various deregulation programs which encouraged foreign
investment in the industry. For instance, the government removed the
pharmaceutical industry from its negative investment list implying 100% foreign
ownership is allowed. Major therapeutic segments was anti-infective due to the
prevalence of communicable diseases such as TB, influenza and others followed
by Gastrointestinal, cardiovascular, Central nervous system, respiratory,
musculoskeletal and dermatology.
How Have the Various Segments Performed
in Indonesia Pharmaceutical Market?
Anti-infective
drug sale has contributed to the largest share of ~% in the revenue share of
Indonesia Pharmaceutical industry in 2017. This is mainly due to high
prevalence of bacterial and communicable diseases. This segment is dominated by
prescription drugs since the patients infected with bacterial and viral
diseases need to consult a doctor for proper treatment of the particular
disease. This is followed by Gastrointestinal and metabolism drugs with ~%, cardiovascular
system drugs with ~%, Central Nervous system drugs with ~%, Respiratory system
drugs with ~%, Musculoskeletal system drugs with ~%, dermatology drugs with ~%,
genitourinary and hormonal drugs with ~%, blood related drugs with ~%, oncology
with ~% and rest of the therapeutic segments with ~% of the revenue share in
2017.
Domestic
players have accounted for ~% of the revenue in Indonesia pharmaceutical market
in 2017 driven by the implementation of JKN (National Health Insurance System)
in 2014. The product portfolio of majority domestic pharmaceutical companies is
dominated by generic drugs. International players have captured ~% of the
revenue share in 2017 driven by favorable government norms for foreign
ownership.
How Major Segments in Indonesia
Pharmaceutical Market have performed?
Generic
drugs have accounted for the major revenue share of ~% in 2017 driven by the
increased demand from government run hospitals and clinics. The share of
patented drugs has increased from ~% in 2013 to ~% in 2017. Further, ethical
generic drugs have accounted for ~% of the Indonesia generic drug market
revenue in 2017 followed by free sale drugs with ~% and unbranded drug sale
with ~%. The Prescription drugs sales have accounted for ~% of the revenue
share in Indonesia Pharmaceuticals Market. OTC drugs have accounted for ~% of
the revenue share in 2017 as more number of people took to self medication.
Domestic sales have accounted for a majority revenue share of ~% in 2017
whereas exports have accounted for a small share of ~%. The domestic market is
dominated by the sale of low priced ethical generic medicines. West java has
accounted for ~% of the pharmaceutical companies in 2016. This is followed by
Jakarta with ~%, East java with ~%, Central Java with ~% and others with ~% of
the companies
What are the major Trends and growth
Drivers in Indonesia Pharmaceutical Market?
Growth
in animal pharmaceutical has added to the overall market revenue. The animal
pharmaceuticals industry has benefitted from opportunities in terms of new
legislations for animal pharmaceuticals. With the launch of 11th economic
package, the government has aimed to boost the domestic production of
medicines' raw materials. Moreover, the government has removed the
pharmaceutical industry from its negative investment list (which lists the
sectors that are closed, or partially closed, for foreign ownership) implying
100% foreign ownership is allowed. The policy also encourages joint ventures
between foreign pharmaceutical companies and local ones in order to transfer
knowledge and technology. In addition to this, the government is planning to
offer fiscal incentives and making the investment procedure easier to attract
foreign players in the industry.
The
Universal healthcare system launched by the government in 2014 has led to an
increase in the production of generic medicines. This has led to lowering
margins as people have shifted from ethical drugs to prescribed generic drugs
but at the same time the sales volume has increased. The market has witnessed
rising number of mergers and acquisitions as a part of expansion strategy by
major domestic and international players.
How is the Competitive Ladscape of
Indonesia Pharmaceutical Market?
There
are ~ pharmaceutical companies (~ domestic and~ international companies)
located in Indonesia and ~% of them are located in Java in 2016. These players
compete on the basis of distribution network, product portfolio, marketing
activities and research and development. The domestic players dominate the
generic drug and OTC drug segment. The domestic players dominate the generic
drug and over the counter drug segment. International players have better
expertise, skilled labor and infrastructure to produce such medicines at
competitive prices.
What is the Future Potential of Indonesia
Pharmaceutical Market?
The
Indonesia pharmaceutical industry is expected to increase from USD ~ billion in
2018 to USD ~ billion at a growth rate of ~%. The industry growth will be led
by Indonesia’s large population and growing middle-income class, supportive
government policies and higher investment in the industry. With the increase in
incidence of communicable diseases such as HIV, TB, therapeutic segments such
as anti infectives and respiratory are expected to grow. Major companies are
expected to increase investment in nutritional and herbal medicines due to
changing preference in the industry. Apart from manufacturing generic and
patented drugs, pharmaceutical companies will shift focus to other niche
segments such as combined dosages, novel drug delivery areas. Further in order
to overcome the shortcomings, Contract Development and Manufacturing
Organizations (CDMOs) will emerge as an attractive resource for manufacturers
seeking to expand their capacities
For more information on the research
report, refer to below link:
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