Indonesian drug makers wary of India's entry plan

Mariel Grazella in Jakarta/The Jakarta Post
Asia News Network

Jakarta (The Jakarta Post/ANN) - Following a visit from Indian industrialists to Jakarta, the International Pharmaceutical Manufacturers Group (IPMG), which represents 34 internationally well-recognized companies in Indonesia, says the government must draw regulations to restrict new players from producing drugs already available in the domestic market.

A delegation headed by India's Commerce and Industry Minister Anand Sharma voiced interest in investing in Indonesia's pharmaceutical sector, in addition to investments in medical equipment, on Monday.

The delegation met with several top government officials during their visit, including Industry Minister MS Hidayat and Trade Minister Gita Wirjawan.

"I personally do not find any problem with them investing in Indonesia because everyone should be given the chance to invest here," IPMG chairman Luthfi Mardiansyah told The Jakarta Post.

"However, those investors must bring their own added value to prevent unhealthy competition from arising between drug producers," he said, adding that these drugs must be "innovative drugs unavailable in the local market".

"They should not just produce antibiotics, which you can find plenty of already," he continued.

He added that the quality of the drugs must be monitored "for the safety of the patients".

"Therefore, the government should regulate that only good quality, not-yet-available drugs are produced by future investors," he said.

During past visits, Indian delegations have also asked for improvements in the registration time frame at the Indonesian Food and Drug Monitoring Agency (BPOM).

According to Hidayat, besides voicing their interest in the pharmaceutical sector, the delegates also pointed out that they found Indonesia's manufacturing and infrastructure sectors "appealing".

"They inquired whether they could participate in projects based on a public-private partnership [PPP]," the minister added.

President Susilo Bambang Yudhoyono aimed to secure a US$15 billion investment from India during a state visit last year. Meanwhile, the Indonesia-India trade target has been set at $25 billion for 2015.

The delegates pointed out that they have invested approximately $7 billion in projects largely related to infrastructure development in South Sumatra and East Kalimantan, in addition to the Trimex Sands titanium complex in Papua, Hidayat said.

In addition to investment opportunities, the delegates also spoke about the surplus of Indonesian imports India was facing, given that India was a large importer of Indonesian coal and coconut palm oil (CPO), he added.

"I have mentioned to them that by 2014, it will become increasingly difficult to export raw materials, especially coal. Thus, they must be prepared to form partnerships related to refinement of minerals or smelting facilities," he said.