ILHAM HIDAYATTULAH

“There’s lots of excitement this year in Indonesia with investment in healthcare infrastructure.”

Ilham Hidayattulah
Principal Consultant
Asia Actual Indonesia

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Indonesia Boosts Medical Device Sales Prospects

Published on: May 21st, 2024

Indonesia has long been an undervalued market for many overseas medical device manufacturers despite many attractive attributes, such as:

  • 4th largest population in the world (278 million).
  • Over 6,000 inhabited islands, including 5 main islands.
  • Multiple health burdens.
  • A proven commitment to transforming the healthcare system.

Recent developments make the Indonesian market an even more attractive place to generate medical device sales growth. In the past year, Indonesia has boosted healthcare by maximizing the industry through both government and foreign health investment. Starting with the 2023 Health Law (also known as Law No.17 of 2023 on Health) which did away with mandatory health spending and adopted a performance-based budgeting system (PBBS) and is expected to promote objective-oriented spending. The Law also introduces a six pillar healthcare transformation through which the Indonesian Government shows its awareness of and commitment to bettering healthcare systems and services in Indonesia.

Indonesia’s 6 Pillars of Health Transformation

One of Indonesia’s many investments in health will be guided by the Ministry of Health’s (MoH) 6 Pillars of Health Transformation. The 6 Pillars are:

  1. Primary Service Transformation: A focus on preventative healthcare via improved health screening and primary service capacity.
  2. Referral Service Transformation: A focus on improving the quality and distribution of health services in Indonesia.
  3. Health Resilience System Transformation: Focuses on dealing with global health crises by increasing pharmaceutical and medical equipment as well as emergency response resilience.
  4. Health Financing System Transformation: A focus on making health services equally accessible.
  5. Health HR Transformation: A focus on equal distribution of health workers throughout Indonesia.
  6. Health Technology Transformation: A focus on utilizing technology and bio-technology.

Signs of Increased Healthcare Investment

The Health Law should encourage investors and foreign manufacturers to invest more in Indonesia. One significant development was announced on May 6th, 2024, when the President of Indonesia, Joko Widodo, launched a hospital-based Specialist Doctor education program. This program should address the lack of Specialist Doctors in Indonesia as well as the problem of doctor distribution. You can read more about it on our blog post, here.

Also on Monday, Indonesia’s Health Ministry Director General for Health Personnel, Arianti Anaya, told news outlet Antara that in expediting access to health services: tools, devices, and medical personnel were the most important factors (article). As Indonesia’s newest program shows a clear commitment to increasing health personnel, we can also expect more spending to go towards updating Medical Devices and Tools in hospitals.

Regional Support in Indonesia

On December 13th, 2023, the Asian Development Bank announced the approval of a $650 million investment loan (co-financed by the Asian Infrastructure Bank, the Islamic Development Bank, and the World Bank) for public health labs and primary care facilities in Indonesia. It was the third round of ADB investing in Indonesia, which will ultimately total to about $4 billion. This support is part of the Primary Healthcare and Public Health Laboratories Upgrading and Strengthening (PLUS) project. Read the full article here.

Come Grow With Us

Asia Actual has offices staffed by experienced, bilingual regulatory and commercial professionals in the major capital cities of Asia including Jakarta.  Contact Asia Actual to see how these changes may impact your business in Indonesia and to stay abreast of this dynamic situation.

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