The Lessons from Indonesia

Transcription

1 The Lessons from Indonesia Dr. Brian W Tempest Brian.tempest@clara.co.uk Kuala Lumpur, Malaysia 29 th April 2010

2 The Lessons from Indonesia Indonesia Visit Dates March Case Study - PT Eisai Indonesia interviewed 12 Pharmaceutical experts- 4 Pharma Companies & Farmasi 6 Government Representatives FDA, Investment Coordinating Board, Ministry of Law, Ministry of Research & Technology 5 Members of the Pharmaceutical Distribution network 2 NGOs 1 Investment Banker

3 Country Profile - Indonesia 4 th most populous country in the world 240m Hospital services (beds/head) are one of the lowest in ASEAN Pharma industry is of modest size at $2.5b 17,508 islands leads to a complex distribution Local industry has grown from 30% (1991) to 70% Jamkesmas free reimbursement (15%) for those living on less than $1day Investment has continued to grow

4 Investment has continued to grow

5 Case Study Profile PT Eisai Indonesia Established in 1971 Sales of $45m Factory upgraded frequently world class Technology comes from mother HQ Technology transfer occurs via training 1 of 10 global factories 14 products manufactured for the local market and 3 are exported. 4 products are locally packaged By comparison Kalbe has over 500 products

6 Leading Local Pharma Companies

7 STRENGTHS I -the Indonesia Pharma Industry Japanese Companies have been present for many years before WW2 Eisai, Takeda, Meiji, Astellas, Otsuka 1Japanese API facility for exporting to ASEAN markets Independent distribution companies available Health insurance of the poorest (15%) Local industry strong and has given foreign companies a very difficult time

8 Strength of Local Generirs

9 STRENGTHS II -the Indonesia Pharma Industry Industry has grown in spite of very few government incentives including R&D Technology passed to the local industry via job hoppers from the Japanese industry Japanese companies help with IP training There are 10 CROs of which 7 are private The top 5 government leaders are said to be intelligent cautious and well focused Pharma is ranked 1 st /2 nd in inward investment

10 Pharma ranked 2 nd (FDI) and 1 st (DDI)

11 WEAKNESSES I -the Indonesia Pharma Industry Japanese rankings are modest after 40 years. but not present in antibiotics Shortage of PhD scientists Eisai closed its R&D operation (on herbals) No government tax incentives on R&D, Exports No R&D grants, no R&D soft loans Doctors are short in numbers and trust Doctors used to work in rural after university now go straight into private practice Generic pricing 3,500Rp vs. 143,250Rp

12 Branded Generics vs. Generic Generics

13 WEAKNESSES II -the Indonesia Pharma Industry Asean Pharma Club (IPMG + Farmasi) could be stronger Some of the Japanese factory capacity utilization is low at <50% (target >80%) The transparency index ranks Indonesia at 111. ASEAN countries rank 3 to178. The President is improving the situation MPs believe malaria is not a real problem Pasar Pramuka- unofficial medicines market which sells half used strips of medicines

14 Pasar Pramuka the unofficial medicine market

15 OPPORTUNITIES I -the Indonesia Pharma Industry No Indian/Chinese pharma companies active No price control on patented or branded generic products. Prices can also be increased at any time Japanese companies have a significant share of their products which are branded generics and are priced high Jakarta - a regional HQ for the ASEAN Chindonesia Heavy Investment from Singapore & Japan

16 Heavy Investment - Japan & Singapore

17 OPPORTUNITIES II -the Indonesia Pharma Industry Eisai has 4.5 hectares of conjoined land for further expansion Foreign shareholding is allowed up to 75% Taisho has recently acquired the BMS Indonesia business The domestic market has grown at 8%/9% in 2009 with 11% growth expected in 2013 Eisai exports granules to ASEAN countries Japanese industry offers regular GMP training to the local industry Wide spread of therapeutic uses

18 Therapeutic Uses of Medicines

19 THREATS I -the Indonesia Pharma Industry Limited opportunity for good education often linked to family wealth A weakening of the rupiah would cause problems as all excipients and packaging are imported The industry would prefer defective factories to be closed down by the FDA CAFTA ASEAN China FTA took effect As people get better off they lose their reimbursement

20 Reduction in $-a-day poverty segment -but they lose their health reimbursement

21 THREATS II -the Indonesia Pharma Industry Generic generic prices are often lower than their cost of manufacture. Some companies have stopped manufacturing so in Feb 2010 there were 80 generic products not available owing to unprofitable prices MOF owns 3 or 4 local pharma companies 10/10 legislation enforcing local manufacture will lead to shortages as 12 MNCs have no factory Obama connection leading to FTA and DE MNCs are being squeezed out

22 MNCs being squeezed out of the top 20

23 The Lessons from Indonesia Scientific and Medical Education needs more government encouragement this impacts all the public health numbers The x40 generic pricing variation is unusual and unstable Need more government incentives (on exports & R&D) and less brutal action (10/10) The FDA should close down more defective factories even government owned ones

24 Thank You