How to Start a Wholesale Pharmacy Business in Indonesia

Starting a pharmaceutical company shows great potential for your business venture. According to Global Data, patented drugs command the lion’s market share. Furthermore, the forecast predicts substantial growth in the therapeutic sector, particularly in respiratory and infectious diseases, owing to the rising incidence of communicable diseases.

Another sector experiencing rapid expansion is the generic drug market, thanks to various government incentives and the expiration of patent protection for several products. Thus, venturing into the wholesale pharmacy business in Indonesia presents a promising investment opportunity.

However, embarking on this journey requires more than just enthusiasm. Success in today’s competitive market demands rigorous research, unwavering determination, and relentless hard work. To guide you through this process, InCorp has prepared a comprehensive guide to get you up to speed.

How Big Is the Pharmaceutical Industry Market in Indonesia?

The pharmaceutical industry in Indonesia has witnessed remarkable growth in recent years. Therefore, it is inevitable that Indonesia will continue this upward trajectory. The market value is projected to reach US$9.9 billion by 2020. It boasts a compound annual growth rate of 10.2%. One of which comes from pharmaceutical companies in Indonesia.

The recent growth rate nearly doubles the 2013 market value of US$5 billion. Several factors contribute to the flourishing pharmaceutical industry in Indonesia. Among these is the increasing life expectancy of the population and a surge in governmental healthcare spending, both of which have fueled demand for pharmaceutical products.

Read more: Product Registration in Indonesia: How to Register Products via BPOM

How to Start a Pharmaceutical Business in Indonesia?

Starting a pharmaceutical business in Indonesia can be rewarding, given the booming industry and growing healthcare needs. However, navigating the regulatory landscape and meeting specific requirements is essential to ensure a successful launch. Here’s a brief guide on how to get started:

1. Regulatory Compliance 

Familiarize yourself with Indonesia’s regulations, including the Negative Investment List, which outlines foreign ownership restrictions. Notably, the wholesale pharmacy sector is open to 100% foreign ownership.

2. Licensing and Facilities 

Ensure you have a qualified pharmacist as a permanent employee and establish necessary facilities, including an office, storage building, and, if applicable, a laboratory for drug testing.

3. Permit Procurement

Obtain essential permits, such as a standard trade business license (SIUP), pharmacy distribution certificate, and drug distribution method certificate.

4. Application Process 

Utilize the Online Single Submission (OSS) system and collaborate with the Ministry of Health and the Indonesian Food and Drug Authority (BPOM) to apply for certificates.

Navigating Regulations for Pharmaceutical Companies in Indonesia

For foreign investors eyeing the pharmaceutical market in Indonesia, it’s crucial to understand the regulatory landscape. Under the Positive Investment List, most Pharmaceutical Companies in Indonesia are either entirely restricted or partially open to foreign ownership. However, there is an exception. It’s the wholesale pharmacy business.

The wholesale pharmacy sector is stated in the Positive Investment List. Therefore, starting pharmaceutical companies in Indonesia is showing great potential for investors. The industry is also open to 100% foreign ownership. It’s important to note that this distinction does not extend to the wholesale drug material sector, where foreign ownership is restricted.

As per Minister of Health Regulation No. 34/2014, limited liability companies or cooperatives are the only permissible legal entities for the wholesale pharmacy category.

Read more: How to Obtain Local Content Certificate for Pharmaceutical Products in Indonesia

Essential Requirements for Launching Your Pharmaceutical Venture

To establish a limited liability company or cooperative in the Indonesian pharmaceutical industry, you must meet specific requirements:

1. Qualified Pharmacist

You are mandated to employ a permanent pharmacist who will oversee your pharmaceutical operations.

2. Physical Facilities

Your business must have a dedicated office and storage building for its activities. If you plan to sell drug materials, you’ll also need a laboratory for conducting drug tests and a storage facility to store these materials.

3. Licenses

Acquiring the necessary permits to operate your business legally is imperative. These typically include a standard trade business license (SIUP), a pharmacy distribution certificate, and a drug distribution method certificate.

Application Details for Pharmaceutical Companies in Indonesia

The application process for obtaining a pharmacy and drug distribution certificate is streamlined through the Online Single Submission (OSS) system, the Ministry of Health E-Licensing System, and the Indonesian Food and Drug Authority (BPOM). 

Prepare a comprehensive distribution plan to ensure your market penetration. Then, Submit the distribution plan along with essential documents about the designated pharmacist:

• Graduation certificate
• Identity card
• STRA (Pharmacist Registration Certificate)
• Cooperation or employment agreement
• A statement letter demonstrating the pharmacist’s commitment to full-time employment.

Once everything is settled, you must wait for your plan to be approved. Upon approval, the regulatory body will issue the certificates. In case of rejection, you may be asked to provide supplementary documents.

Read more: Permissible Contamination Limits in Health Supplements Products in Indonesia

Leveraging InCorp’s Expertise

InCorp assists entrepreneurs and businesses across diverse industries, including Indonesia’s pharmaceutical sector. Our global office in Indonesia offers various services to facilitate your incorporation in this dynamic market. With InCorp, you’ll experience a seamless and expedited company setup process.

If you’re looking for guidance on your journey to business success, don’t hesitate to contact InCorp today. We’re here to fuel your entrepreneurial drive and help you seize the abundant opportunities in Indonesia’s pharmaceutical industry. Fill out the form below to get started.