Indonesia’s pharmaceutical market is projected to reach $10.11bn by 2021, according to a report by GlobalData.

Titled ‘CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – Indonesia’, the report provides an overview of the Indonesian pharmaceutical market, which is the biggest in the Association of Southeast Nations (ASEAN).

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The introduction of 15 economic policy packages for foreign investors, implementation of Universal Health Coverage scheme (Jaminan Kesehatan Nasional, JKN) and an increasing urban population are the main growth drivers identified by the report.

The Indonesian pharmaceutical market is regulated by the Ministry of Health of the Republic of Indonesia (MoHRI) and is responsible for drug ceiling prices and ensuring the availability of 484 essential drugs listed in the National List of Essential Medicines (NLEM).

“Ethical, branded and unbranded generics accounted for 62% of the pharmaceutical market in 2015, while over-the-counter (OTC) drugs held the remaining share.”

An estimated 70% out of the 215 drug manufacturers in Indonesia in 2016 were domestic. The MoHRI has reduced the restrictions on ownership, allowing foreign companies to own 100% partnership instead of the previous 75%, states Sharath Chandra, Healthcare Analyst at GlobalData.

A reduction in restrictions is expected to boost investment in the pharmacy sector, which is forecast to reach $19.8bn by 2025.

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Ethical, branded and unbranded generics accounted for 62% of the pharmaceutical market in 2015, while over-the-counter (OTC) drugs held the remaining share. The unbranded generic market during the same period was worth $619m or 10.8%, which is expected to increase further as more Indonesians begin to rely on JKN.

Inadequate public and private infrastructure, counterfeit medicines, and poor healthcare spending, however, will be the major challenges for the industry, Chandra states.