Hitherto, the part of private insurers in Indonesia’s innovative reforms is uncertain. The government has not stipulated transitional preparations for employers that have gotten private health insurance for their workers, making them to pay twofold. Nonetheless private insurers are anticipated to benefit from a general shift headed for insurance coverage in a market where 75% of private health spending was out of pocket in 2010, according to the World Health Organisation. This will be specifically true if Indonesia’s economy grows robustly, boosting the growth of the middle class.
The execution of the JKN seems to bring many opportunities and reviews for pharmaceutical companies and medical devices providers. Though, the almost certainly beneficiaries are local pharmaceutical companies manufacturing generic drugs, which already have a 70% share of the local drug by volume. According to Health Minister Nafsiah Mboi, in order to lower costs, doctors participating in the JKN will have to adhere to a government formulary, which consists of 92% generics and 2.5% innovator drugs. The rest is accounted for by dental materials and diagnostics.
The application of JKN will also leave the present regulatory restrictions on foreign pharmaceutical companies unaffected and also to avoid extortion. Market obstructions to growth continue, as well as an unwieldy approval process for medicines and a long-standing requirement for foreign drug companies to have a manufacturing facility in Indonesia before they can dispense their products. Similar to private insurance companies, consequently, many foreign pharma and medical device companies will have to depend on on Indonesia’s growing economy – instead of its healthcare reforms – for any market opportunities.