During the turbulent year of 1999 with many political changes in Indonesia, the key issues affecting the U.S. Research Based Pharmaceutical Industry have changed considerably in terms of emphasis, although the content is similar to previous years.

The revised list includes:

  1. NCE or Pharmaceutical product registration by the Indonesian FDA (Dir. Jen. POM) is now so slow and confusing that approval time exceeds 2 years.

  2. IRP, especially the Patent Law 1989/1997 remains non-compliant with TRIPS.

  3. Marketing practices of foreign/domestic industry remains an issue limiting the U.S. companies ability to compete.

  4. Other issues: generic prescribing, taxation, deregulation.

NCE and Pharmaceutical Product Registration

During the course of 1999 and with the appointment of a new Director General of Dir. Jen POM (FDA), Drs. Sampoerno, a number of changes were implemented which despite the intention of encouraging openness and transparency have resulted in a backlog of 1,800 products. The approval time for 12 months maximum in 1997 has now extended to over 24 months with virtually no approvals being received for U.S. companies for over 10 months of 1999.

This issue now represents a serious trade barrier to entry into the Indonesian market. The local trade association, IPMG, has been working on various levels to suggest changes to the regulations which would speed up the process with the present resources available to POM.

Without changes to process the backlog, the backlog will increase in 2000 to more than 2000 products, of which 300 are NCE's or new product indications/presentations.

Intellectual Property Protection

The same issues remain as in the last report as no action has been taken by the Indonesian Government of President B.J. Habibie during his transition tenure.

The main aim in the year 2000 is to:

In the area of enforcement of existing intellectual property legislation, a few success stories have appeared in 1999 in the area of anti-counterfeit activities. Some local operators have been forced to close down as a result of investigations and police raids. However, the penalties remain inadequate and the actual fate of the perpetrators is unknown. More serious laws and implementation thereof are needed in the future. This can only be expected as the new Indonesian Government begins to tackle the whole issue of the Judiciary and law enforcement.

Marketing Practices

During 1999 a Code of Pharmaceutical Marketing Practices was issued (April) and approved by both trade associations, GP Farmasi (representing local companies) and IPMG (Research industry). However, only IPMG members have endorsed the code by agreeing in writing to abide by its content. This Code will be offically recognized at the annual meeting of GP Farmasi in March 2000 but it is not expected that all local companies will agree to follow the code. Blatant malpractice in various forms continue to disadvantage the U.S. companies who have to follow strict compliance procedures.

Other Issues

It is unclear at this state what attitude the new Government will take. The desperate financial situation which Indonesia finds itself will likely have negative impact on companies in this regard.

No real progress to date.

Generic Prescribing
Although it is not actively promoted as much as it was in 1998, generic prescribing remains Government policy, with the potential for substantial adverse impact on PhRMA member firms operating in Indonesia. Generic prices of products produced by Government owned companies have been increased.

Potential Exports/Foreign Sales

Due to the Asian financial crisis and the consequent changes in the Indonesian market, PhRMA does not have an estimate of potential exports or forgone foreign sales due to current trade barriers at this time.