donovan
Indonesia Pharma Market Perspective 2017
Indonesia is belived to be pharma next hot economy, The Indonesia pharma market is valuaded at +/- Rp 80 Trilyun in 2015, the sector recorder 85% growth from 2010 to 2015 with domestic companies holding 70% of the market share compare to the 30% owned by multinationals.
1.Nasional Health Insurances ,
a.BPJS or JKN
BPJS will be covered by JKN. As a result, manufacturers will have to contend with significant price as they seek to supply quantities of pharmaceutical for public procurement.
In 2017;
- LKPP or LPSE will added many new numeric of drug to entrance “ecatalog” categories
- Prediction of sales growth (2016 vs 2015) JKN drugs year is 15.7%
- Progress hospitals member JKN next year, not only government hospitals but almost
private hospital (92 private hospitals) in around Jakarta (Jabotabek) will joint with BPJS programs.
BPJS will provide many item drug to hospital members (Government and private hospitals.
b. Inhealth insurance (premium medical care)
Currently, inhealth is a major player within the managed care segment of health insurance. On 2016, Inhealth business has 49 service offices throughout Indonesia. More than 4000 health care provides including hospital, pharmacies and phisicians.
Inhealth also experience growth with more than 1 million participant and more than 15 pharmaceutical manufactures joint this system and total sales in Inhealth channel estimated around Rp 74 billion in 2016
In 2017 :
- SIMO (inhealth web system) will install to many new hospital and dispensary , estimated to get 200 new members
- Inhealth product will be increased significant ; not only sales grow but also added to numeric of drug will joint with SIMO
2.Health expenditure per capita in Indonesia
The limits in the pharmaceutical industry are even higher ; 85% and given the estimation that 20% of total health expenditure will be allocated to pharmacy products.
Indonesia’s GDP growth slowed further to
4.7% year on year . in Q2 2016 Indonesia’s real GDP is excpected to
5.8% from GDP
Indonesia’s inflation rate increased by
4.2% year on year, 2016
3.The Diseases.
Several diseases is big opportunity to extend of pharmaceutical business in Indonesia :
a. Chronic diseases due to effect of life styles are more prevalent like : Obesity, type 2 diabetes , and cancer
b.Cardio vaskuler diseases are dominant , concern in Indonesia because of tobacco, hypertension will have greatest number of deaths among all Indonesia city.
c.Communicable diseases like TB/HIV are still highly prevalent in Indonesia.
d.
The major therapeutic categories were : antibacterial drugs , analgesics, antitussives, vitamin and mineral, vaccines and anti tuberculosis drugs.
4. War competition for Principals of pharmaceutical
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Rethinking to register almost your drugs in LKPP for BPJS/JKN, It is important to joint BPJS products
- to add of channel to push order, Sub distributor or retailer.
Manufacturers of pharmaceutical uses two basic promotional approach : push and pull strategies.
It is important to appropriately adjust a strategy to a specific drug, discount not away profitable. The main obstacles to cooperative with sub distributor are their poor financial condition and small warehouse.
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The principals of pharmaceutical ability to maintain good relationships with its business network (including with distributors and retailers/ sub distributor) as well as terms and condition of the cooperation are further assessed in rating determination.
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Ability to keep consistent marketing strategy to build brand loyalty.
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Well managed discount to customers
- Budget of promotion is not large, be policy to support customer
5.High competition in distributor of pharmaceutical to capture a new principal and new business.
They will give excellent service to principal and customer with less operation.
Distributor use new web application (sales, finance and logistic) to reduce cost,
In this changing business environment, customers and manufacturers are beginning to ask, How do distributors add value?
The answer, of course, is that distributors add value in many ways. Distributors offer a wide variety of value-added services before, during and after the sales (delivery and return good policy)
a.Distribution Business Processes Strategies for distributors "performance-based approach" to four categories :
*. Serving demand ( need of customers and principals)
*. Maximizing sales and collection performance
*. Optimizing supply chain and inventory efficiency
*. Operational efficiency.
b.Technologies expected to help grow the business. Distributors are taking innovative approaches, focusing on better service demand with improved forecasts or conducting more business via the web.
c. Distributor with Unique Value Proposition can be engaged with principals ;
Distributor can be provider of end to end solution for each principals to give them satisfaction, provide all needed like : daily sales report , integration data between salesman dan medical representative , automatic replacement of stock etc
6.Many Apotik / dispensary will collapse effect from JKN price,
Apotik/dispensary must change strategy to struggle with competitive condition because effect of JKN drugs , the price has been cheap. In 2016, it’s sales decreased until 50%.
The strategy will create to win of war competition are :
- Corporation with principal of pharmaceutical to serve doctor
- good relationship with patient
- get minimum profit from price
- reduce operation expense
7.Growing institution channel in pharmaceutical business
Channel of institution will developed in 2017 ; Puskesmas (community health centre) , RSUK (RS Umum Kecamatan) , Dinas kesehatan office and Kemenkes (kementrian kesehatan).
Puskesmas efforts is very important particularly to support of JKN , Puskesmas is responsible for implementing comprehensive , integrated and sustainable health care at primary level.
Total puskesmas in 2016 is 9,655
a. a new pattern to serve institution business , there are many systems:
- e-catalog
- e-monev
b. new role to handle of Government hospital
- New role to contract of price for regularly patient in hospitals (not BPJS patient)
- e-tendering through “web LPSE”
- New payment flow chart and new administration process to handling institutional / government hospital , like : BA (Berita Acara), payment process and SPK (Surat Perintah Kerja)
8.The Role of “Indonesia Medicine regulatory authority “ (BPOM) will be strictly
- BPOM welcome investment are important in ensuring that supply meet demand, this situation will result in more acquaintance and innovation partnering models.
- The local companies are GMP certified
- Indonesia Medicine Regulatory Authority (BPOM) strictly to control all activity, distribute and procedure of pharmaceutical industry.
- BPOM’s regulation are update : compulsory licences, patent annuity fees , generic resources and traditional knowledge etc
9.Distributor must care about BPJS collection
BPJS payment to hospital is not good and give a bad condition for distributor of pharmaceutical. Many hospitals paid their transaction to distributor is very long time (overdue).
Advice for BPJS In 2017 :
- BPJS office make a web of payment transaction to all member hospital, “e -payment” .
Function is easily to tracking all invoice or transaction from hospitals and distributor. This web can give many information to hospital and distributor ; administration process , when BPJS will paid od invoice from hospital , Budget of payment , obstacles of invoice etc
- Distributor make closely relationship with BPJS branch not only BPJS head offices
Conclusions
1.The Indonesia’s pharmaceutical industry is positive because the enormous growth potential of the local market regulatory and despite facing competition.
2.Important to manufacturer / principals and distributor of pharmaceutical to create strategy to face business competition in 2017
Manufacturer should follow several points to define their approach to this complex, the precepts call for pharmaceutical companies to do the following :
a.Key partners: the network of distributor and sub distributor/retailers that makes the business model work
b.Value proposition: the bundle of products and services that create value for a specific customer segment
c.Customer relationships: the types of relationships a company establishes with specific customer segments
d.Channels: the way a company communicates with and reaches its customer segments to deliver a value proposition
e..Customer segments: the different groups of people or organizations an enterprise aims to reach and serve
f.Cost structure: all costs, such as marketing and promotion, distribution and payments,
g.Define a talent strategy. Develop a clear plan to secure key leadership and managerial talent, blending local and global experience. Build a sustainable approach to address a tight talent pipeline and mitigate staff turnover at levels.
Despite the above challenges , Indonesia still provides a significant opportunity for Pharmaceutical companies , The country has a comparatively
high growth rate, large market, urbanizing , population and strong demographies.
I am optimistic, and you…
Thanks ,
Donni Noviandi Rafdi
NIDN : 0325117404 , Dosen Pemasaran
