New Initiative is Meant to Promote the Purchase of Locally Produced Products

Per Presidential Regulation 12/2021, the Ministry of Health (MOH) is requiring medical devices with a Domestic Component Level (TKDN) and Benefit Weigh Value (BMP) of 40% or more be purchased by government hospitals regardless of available foreign products. The change went into effect on June 18^th following a a conference between the Ministry for Maritime and Investment Affairs, the MOH, the Ministry of Industry, and the LKPP. The initiative is already in effect on the LKPP’s e-catalogue website as manufacturers and government hospitals have found that medical devices not meeting these requirements are still listed but cannot be purchased.

At this time, it is not clear how long the freeze will last. Affected imported medical devices include autoclaves, hospital beds, surgical gloves and protective gear, cardiac monitors, general surgical and OBGYN instruments, and ECG units. A complete list of the categories can be found below and a Detik Finance article here that also provides a list and additional information. While there is no formal written instructions declaring that imported medical devices cannot be purchased by government hospitals, it does state that the following qualities will be prioritized:

1. Locally made products
2. Small business entities
3. Products with a SNI (Indonesia Standard Industry)
4. Environmentally Friendly

Exceptions for Some Imported Medical Devices

Lastly, per Clause 66 point 5, government hospitals are able to purchase imported medical devices if the products can’t be produced domestically or can’t meet the volume needed. However, at this time, it is not completely clear what the process is for processing an exemption to the domestic product requirement given the inability to purchase through the e-catalogue.

These moves are being met with opposition from many Indonesian distributors as well as multinational manufacturers.  It will be important to stay alert for changes as the situation evolves.

Products Unfrozen Due to COVID Needs

1. HFNC (High Flow Nasal Cannulas)
2. CPAPs
3. Emergency Ventilators
4. Continuous Ventilators (Non Invasive)
5. Ventilator for ICUs (Invasive)
6. Oxygen Generators
7. Oxygen Generator Systems
8. Portable Oxygen Generators
9. Oximeters
10. Patient Monitors
11. Infusion Pumps

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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.