JAKARTA, Nov. 2, 2016 /PRNewswire/ -- IPMG members - including Novartis, Merck, Bayer, Boehringer Ingelheim, and Pfizer - have invested more than USD $1 billion in Indonesia's pharmaceutical industry over the past few years, particularity for the construction of factories and clinical research (source: AmCham Indonesia).
An example is Bayer, which recently invested 8.1 million euros in the expansion of its factory in Cimanggis ( West Java). This factory produces multivitamins and medicines, about 75% of which is exported to 26 countries. Concurrently, Indonesia's largest pharmaceutical company, Kalbe Farma, is shifting from being a maker of generic drugs to a high-tech pharma developer. Besides producing cancer drugs, Kalbe has been investing in R&D on stem cell therapies. Significantly, a lack of generic substitutes in these fields in Indonesia implies no government-set price ceilings, and therefore these products offer higher margins. In fact, there are more than 200 drugmakers in Indonesia, most of which produce only low-margin generics. While they control 95% of the market by volume, they have a combined 75% share in value terms. Therefore the few multinationals operating in the country have been able to make more profits because of their focus on high-value products.