Legislation and Regulation

The primary legislation governing pharmaceuticals and medical devices is Law No 17 of 2023 on Health (“Law 17/2023”). This legislation is implemented through regulations on pharmaceuticals issued by the Indonesian Food and Drug Authority (Badan Pengawas Obat dan Makanan or BPOM) as well as regulations on medical devices issued by the Minister of Health (MOH).

Pharmaceuticals

Key regulations for pharmaceuticals include:

• BPOM Regulation No 8 of 2024 on Procedures for the Approval of Clinical Trials Implementation (“BPOM 8/2024”);
• BPOM Regulation No 27 of 2022 on Supervision of Drug and Food Imports into Indonesia, as amended by BPOM Regulation No 28 of 2023 (“BPOM 27/2022 as Amended”);
• BPOM Regulation No 2 of 2021 on Guidelines for Drug Advertising Supervision (“BPOM 2/2021”);
• BPOM Regulation No 8 of 2020 on the Supervision of Drugs and Food Distributed Online, as amended by BPOM No 34 of 2020 (“BPOM 8/2020 as Amended”);
• Head of BPOM Regulation No 24 of 2017 on Criteria and Procedures for Drug Registration, as last amended by BPOM Regulation No 25 of 2023 (“H.BPOM 24/2017 as Amended”).

Medical Devices

Key regulations for medical devices include:

• MOH Regulation No 14 of 2021 on Standards for Business Activities and Products in the Implementation of Risk-Based Business Licensing in the Health Sector, as amended by MOH Regulation No 8 of 2022;
• MOH Regulation No 51 of 2014 on the Importation of Medical Devices through the Special Access Scheme as amended by MOH Regulation No 7 of 2020 (“MOH 51/2014 as Amended”);
• MOH Regulation No 24 of 2022 on Medical Records (“MOH 24/2022”);
• MOH Regulation No 20 of 2019 on the Implementation of Telemedicine Services between Healthcare Facilities (“MOH 20/2019”);
• MOH Regulation No 62 of 2017 on Marketing Authorisation for Medical Devices, In Vitro Diagnostic Medical Devices, and Household Health Supplies (“MOH 62/2017”);
• MOH Regulation No 63 of 2017 on Good Clinical Practice for Medical Devices (“MOH 63/2017”);
• MOH Regulation No 17 of 2017 on Action Plan for the Development of the Pharmaceutical and Medical Equipment Industry (“MOH 17/2017”);
• MOH Regulation No 98 of 2015 on the Provision of Information on Maximum Retail Price of Medicines (“MOH 98/2015”);
• MOH Regulation No 76 of 2013 on Advertising of Medical Devices and Household Health Supplies (“MOH 76/2013”).

Regulatory Bodies

Pharmaceuticals

BPOM is the primary regulatory body responsible for the supervision and regulation of pharmaceuticals in Indonesia. BPOM operates under Presidential Regulation (“PR”) No 80 of 2017 on Indonesian Food and Drug Authority (“PR 8/2017”) and is a non-ministerial government institution tasked with overseeing drug control. Under PR 8/2017, BPOM operates under and is accountable to the President through the MOH.

Medical Devices

The Ministry of Health is the primary regulatory body responsible for the supervision and regulation of medical devices in Indonesia. As part of the central government, it operates under PR No 18 of 2021 on Ministry of Health (“PR 18/2021”).  Under PR 18/2021, the Ministry of Health formulates and enforces health policies, including those related to medical devices.

Under Law No 5 of 1986 on the State Administrative Court, as lastly amended by Law No 51 of 2009 (“Law 5/1986 as Amended”), there exists a legal avenue for challenging administrative decisions. This legislation allows any party who believes that their rights have been infringed upon by a State administrative decision to file a lawsuit in the State Administrative Court (PTUN).

For a decision to be the object of a PTUN lawsuit, it must meet the criteria of being concrete, individual, and final. BPOM is a governmental agency responsible for regulating and controlling drugs and food products. As such, BPOM's decisions are considered as State administrative decisions. These decisions can be challenged in the State Administrative Court provided they meet the aforementioned criteria.

To challenge a BPOM decision, the claimant must demonstrate that the decision directly affects their legal rights or interests and is flawed either procedurally or substantively. The lawsuit must be filed within 90 days from when the decision was issued or became known to the claimant. The State Administrative Court will then review the case to determine the legality and justification of the decision. If the Court deems the decision unlawful, it can annul the decision and order corrective actions.

Pharmaceuticals

Under Law 17/2023, drugs are primarily categorised based on their required dispensing conditions. Drugs are categorised into prescription-only drugs and non-prescription drugs.

Prescription-only drugs consist of potent drugs, narcotics, and psychotropics, which must be dispensed exclusively by licensed pharmacists operating within a pharmaceutical service facilities. Non-prescription drugs, which are further divided into over-the-counter (OTC) drugs and limited OTC drugs, may be obtained from pharmaceutical service facilities or other facilities in accordance with laws and regulations.

Law 17/2023 provides that certain potent drugs may be dispensed by a pharmacist without a prescription.

In addition to these categories, Law 17/2023 also delineates the classification of natural medicines into traditional herbal remedies (jamu), standardised herbal medicines, phytopharmaceuticals, and other natural medicines.

Medical Devices

Based on the risk posed to patients by the use of medical devices, MOH 62/2017 provides that medical devices are classified into Class A (low risk), Class B (low to moderate risk), Class C (moderate to high risk) and Class D (high risk). 

For in vitro diagnostic medical devices, MOH 62/2017 provides classification based on the risk posed by misinterpretation of diagnostic results to individuals and the public, ie, Class A (low risk to both individuals and the public), Class B (moderate to individuals but low risk to the public), Class C (high risk to individuals but moderate risk to the public), and Class D (high risk to both individuals and the public). 

Based on the classification guideline issued by the Ministry of Health, the higher the class of a medical device or an in vitro diagnostic medical device, the more information will be required for the registration to the Ministry of Health.

Pharmaceuticals

Under BPOM 8/2024, clinical trials of pharmaceuticals are differentiated into Pre-Marketing Clinical Trials and Post-Marketing Clinical Trials. Conducting both types of clinical trials requires prior approval from the Head of BPOM (except for Post-Marketing Clinical Trials which are specifically undertaken in Indonesia for educational purposes). Such approval is valid for two years from the date of issuance.

Medical Devices

Similarly, MOH 63/2017 differentiates clinical trials of medical devices into Pre-Marketing Clinical Trials and Post-Marketing Clinical Trials. Conducting Pre-Marketing Clinical Trials requires prior approval from the MOH. Such approval is valid for two years from the date of issuance. In contrast, a notification to the Director General under the Ministry of Health will suffice for conducting Post-Marketing Clinical Trials.

Pharmaceuticals

To secure authorisation to undertake a clinical trial of a pharmaceutical, the applicant must first submit an electronic application to obtain approval from the Head of BPOM through the official BPOM website by filing the prerequisite documents and paying the service fees. BPOM will then evaluate the documents and may request for a correction to be made and/or additional data to be provided. If BPOM deems no correction and/or additional data is necessary, BPOM will issue either an approval or a refusal to the application within 20 working days from the date of service fees payment. Approval from the Head of BPOM to undertake a clinical trial will only be given after an approval from the Ethics Committee is obtained.

Medical Devices

Pre-marketing clinical trials

To secure authorisation to undertake a pre-marketing clinical trial of a medical device, the applicant must first submit a written application to attain an approval from the MOH by filing the prerequisite documents to the Director General under the Ministry of Health and paying the service fees. If the documents are deemed to be complete, the Director General will then form an evaluation team which will conduct an evaluation of the documents and deliver the result of the evaluation to the Director General. The Director General will issue an approval, refusal, or deferment for the application within 20 working days from the date of the receipt of the documents filed. An approval from the Health Research Ethics Committee must be obtained prior to conducting a pre-marketing clinical .

Post-marketing clinical trials

To secure authorisation to undertake a post-marketing clinical trial of a medical device, the applicant must first submit a written notification to the Director General under the Ministry of Health by filing the prerequisite documents. The Director General will then give a response to the notification within 20 working days from the date of the receipt of the documents filed. If the Director General does not provide a response within the stipulated time, the applicant may draw up a statement confirming readiness to undertake the post-marketing clinical. Approval from the Health Research Ethics Committee must be obtained prior to conducting a post-marketing clinical .

The conduct and results of a clinical trial for both medicines and medical devices will not be listed in any publicly accessible database.

The data generated by clinical trial institutions, such as hospitals, research centres, and universities, are safeguarded and retained exclusively within these entities, ensuring that no external party is authorised to access such information.

In practice, the release of clinical trial data requires the explicit consent of all parties involved. For instance, in the event of a serious adverse incident, the data may be disclosed solely by mutual agreement for evidentiary purposes. The dissemination of such data is strictly confined to the directly involved parties, maintaining the integrity and confidentiality of the clinical trial process.

There are no restrictions for using online tools to support clinical trials (eg, for recruiting or monitoring purposes).

If the data generated from clinical trials can be used to identify an individual, it is deemed as personal data under Law No 27 of 2022 on Personal Data Protection (“Law 27/2022”). Under Law 27/2022, any transfer of personal data to an external entity is strictly prohibited unless consent has been obtained from the data subject.

Additionally, Article 1(9) of BPOM 8/2024 and Article 1(6) of MOH 63/2017 affirm that the confidentiality of information relating to individuals participating in clinical trials of pharmaceuticals and medical devices is part of the Good Clinical Practice (Cara Uji Klinis Yang Baik), which must be complied with in conducting clinical trials.

Under Law 27/2022, the creation of a database containing personal information requires the explicit consent of the data subject.

Under Law 17/2023, medical devices are defined as instruments, apparatus, machines, equipment, implants, in vitro reagents and calibrators, software, and materials or the like that are used on humans for medical purposes and do not achieve their primary action through pharmacological, immunological, or metabolic processes.

In contrast, drugs are substances or mixtures thereof, including biological products, that are intended for human consumption to influence or examine physiological systems or pathological conditions for purposes of diagnosis, prevention, treatment, recovery, health improvement, and contraception.

Biological products (eg, vaccines) fall within the definition of drugs and thus fall under the same regulations.

Pharmaceuticals

Marketing authorisation for pharmaceuticals is issued with a maximum validity period of five years. Renewal of marketing authorisation for a pharmaceutical must be submitted no earlier than twelve months and no later than two months before the current authorisation expires. Marketing authorisations for pharmaceuticals can be suspended and/or revoked in the event of:

• violation of the obligation to make and send a production report or import report of imported drugs to BPOM in accordance with laws and regulations;
• revocation of the industrial licence of the marketing authorisation owner; or
• the marketing authorisation owner committing a violation in the field of production, distribution, promotion, and/or drug labelling.

Medical Devices

Marketing authorisation for medical devices is issued with a maximum validity period of five years. Renewal of marketing authorisation for a medical device must be submitted no earlier than nine months before the current authorisation expires. Marketing authorisation for medical devices can be revoked in the event of:

• the medical device causing consequences that may endanger health;
• the medical device not meeting the criteria in accordance with the data submitted at the time of the application for the marketing authorisation registration;
• revocation of the product certificate;
• revocation of the medical device distribution licence; or
• termination of appointment as sole agent/sole distributor/exclusive distributor and/or authorisation.

Pharmaceuticals

To obtain a marketing authorisation for pharmaceuticals, the registration process must be conducted with BPOM through the Risk Based Approach Online Single Submission (RBA OSS) system. Only pharmaceutical manufacturing companies established in Indonesia can apply for registration.

The registration process for new products is classified into three categories:

• category 1 covers new drugs and biological products, including biosimilars;
• category 2 covers generic drugs and branded generic drugs;
• category 3 covers other drug-containing products with special technology, such as transdermal patches, implants, and beads.

For new product registration of category 1, risk management planning is mandatory. The procedures and requirements for registration are outlined in H.BPOM 24/2017 as Amended.

The registration process for variation is classified into three categories:

• category 4 covers major variations, ie, variations that have a significant effect on the efficacy, safety and/or quality of the drug;
• category 5 covers minor variations, ie, variations that does not fall under the category of either major variation or notification variation registration;
• category 6 covers notification variations, ie, variations that has minimal or no effect on the efficacy, safety and/or quality of the drug.

The registration process of the above generally consists of two stages, the preregistration phase and the registration phase. The preregistration phase filters the registration process by determining the registration category, evaluation track, evaluation fee, and required documents.

Medical Devices

Applications to obtain marketing authorisations for medical devices and in vitro diagnostic medical devices are submitted online. The application includes submission of required documents and information, including a certificate of production/medical device distribution licence, certificate of free sale, and quality management system document.

The MOH then evaluates and verifies the administrative and technical requirements of the application. If the medical device involves new technology, active substances, or uncommon claims, a review by a designated expert team may be required.

If the administrative and technical requirements are fulfilled and the documents are complete, the marketing authorisation is issued electronically within a specified timeframe. Otherwise the Ministry of Health will issue a refusal letter. If additional information is required, the Ministry of Health will notify the applicant to provide the necessary details or documents.

Variation in the marketing authorisation must be conducted in the event there is a variation in the size, packaging, marking, accessories/attachments to the marketing authorisation, or the name or address of the representative authorised by the manufacturer. If there are variations other than the above, the marketing authorisation holder must apply for a new marketing authorisation.

Applications for a variation in the marketing authorisation for medical devices are submitted online. Similarly, applicants must fulfill administrative and technical requirements.

In principle, medical devices and in vitro diagnostic medical devices that are produced, imported, assembled, and/or repackaged must have a marketing authorisation to be distributed within Indonesia. However, MOH 63/2017 provides specific exemptions to this requirement:

• medical devices that enter Indonesia through a Special Access Scheme (SAS) in accordance with laws and regulations;
• certain medical devices and in vitro diagnostic medical devices produced by household companies;
• certain medical devices and in vitro diagnostic medical devices for certain reasons determined by the Ministry of Health.

Pharmaceuticals that enter Indonesia through the SAS in accordance with laws and regulations are exempted from requirement of a marketing authorisation. In the event of a public health emergency, the marketing authorisation may be in a form of emergency use authorisation (EUA) which is only effective for use of drugs during the public health emergency and for patient medications in accordance with laws and regulations.

Pharmaceuticals

A holder of a marketing authorisation for pharmaceuticals is required to submit production reports or import reports to BPOM. They are also obliged to monitor the efficacy, safety, and quality of the drug and report the result to BPOM. Such data can trigger BPOM to conduct a drug reassessment that can result in:

• change of label;
• revision of composition/formula;
• provision of limitation of use;
• change in classification of the drug;
• withdrawal of the drug from circulation;
• suspension or revocation of the marketing authorisation.

Medical Devices

Manufacturers and distributors of a medical device or in vitro diagnostic medical devices that will be distributed must include markings and information on the medical devices in accordance with laws and regulations. The information that must be provided includes safety, usefulness, instructions for use and/or other necessary information, such as trade name, marketing authorisation number, product specification, expiration date, and if applicable, a “for professional use only” warning label.

Additionally, if applicable, information on net content, composition and levels of active ingredients, contraindications, cautions and warning signs or serious adverse events/side effects, must be included in the marking and information. The marking and information are prohibited from including certain contents, such as using superlative words like “very”, “top”, and “super” and mentioning the name of the test lab.

Holder of a marketing authorisation must submit reports including production reports or distribution reports to the Ministry of Health. They must also submit an adverse event report if an adverse event occurs. 

Manufacturers and distributors of medical devices and in vitro diagnostic medical devices must supervise their products and ensure conformity to quality, safety, and usefulness. The supervision can take the form of audit, re-examination of products to determine serious adverse events, and reporting serious adverse events to the government.

Information relating to pending applications for marketing authorisations for both pharmaceuticals and medical devices is not made available to, and thus cannot be accessed by, third parties. Specifically with regard to pharmaceuticals, Article 27(4) of H.BPOM 24/2017 as Amended provides that any information submitted to the BPOM for the purpose of applying for marketing authorisation is strictly confidential and may only be used solely for evaluation purposes by authorised parties.

BPOM provides a website where third parties can access information concerning the status of marketing authorisations (ie, whether the said authorisation is active, suspended, or has been revoked).

Article 1(9) of BPOM 8/2024 and Article 1(6) of MOH 63/2017 affirm that the confidentiality of information relating to individuals participating in clinical trials of pharmaceuticals and medical devices is an integral part of the Good Clinical Practice standard, which must be adhered to when conducting clinical trials. Additionally, the Appendix to BPOM 8/2024 and the Appendix to MOH 63/2017 further clarify that clinical trials must keep confidential all information relating to individuals participating in clinical trials. Researchers may also be instructed to maintain the confidentiality of any information relating to the pharmaceuticals and medical devices.

Article 142 of Law 17/2023 states that pharmaceuticals and medical devices must meet the standards and/or requirements for safety, efficacy/benefit, and quality that are set by the central government. In this regard, Articles 435 and 447 of Law 17/2023 prohibits the production or distribution of pharmaceuticals or medical devices that fail to meet the aforesaid standards and/or requirements.

Any person who violates this provision is subject to imprisonment of up to 12 years or a fine of up to IDR5 billion. If the violation is committed by a company, criminal liability will be imposed upon the company, managers who have a functional position, the giver of the orders, the controller, and/or beneficial owner of the company. Additionally, a fine of up to IDR5 billion may be imposed upon the company. Falsified or illegally distributed pharmaceuticals and medical devices are likely to fail to meet the relevant standards and/or requirements, thus risking the aforesaid criminal sanctions.       

In principle, the Indonesian Customs may conduct administrative measures to suspend the release, loading, and transportation of imported goods suspected to be, or come from, a violation of intellectual property rights (IPR) under sufficient evidence. Such “sufficient evidence” is obtained by the Indonesian Customs through the recordation of IPR with the Indonesian Customs.

In this respect, owner or holder of a trade mark or copyright can submit a written recordation application of IPR data to the Indonesian Customs along with the required documents (eg, data on the persons given the right to conduct import/export and IPR registration certificate). The Indonesian Customs will issue approval or refusal of the recordation application based on their assessment.

Pharmaceuticals

The manufacturing of pharmaceuticals is subject to authorisation from BPOM. Companies must obtain a Good Manufacturing Practice for Pharmaceuticals (CPOB) certificate from BPOM. The process to obtain the CPOB certificate from BPOM is conducted online through the BPOM electronic system. The CPOB certificate authorises the company to conduct the wholesale of pharmaceuticals pursuant to their Indonesian Business Classification Code (KBLI). 

The period of validity of the CPOB certificate is five years, provided the company continues to conduct production and fulfill the requirements under the applicable laws and regulations. Business actors must submit a recertification application six months prior to the expiry of the validity period.

Medical Devices

The manufacturing of medical devices is subject to an authorisation from the Ministry of Health. Companies must obtain a Good Manufacturing Practice for Medical Devices (CPAKB) certificate from the Ministry of Health. The process to obtain the CPAKB certificate from the Ministry of Health is conducted online through the Ministry of Health’s electronic system. The CPAKB certificate authorises the company to conduct the manufacturing of medical devices pursuant to their KBLI. The period of validity of the CPAKB certificate is five years and can be extended.

Pharmaceuticals

The wholesale of pharmaceuticals is subject to authorisation from BPOM. Companies must obtain Good Distribution Practice for Pharmaceuticals (DOB) certificate from BPOM. The process to obtain the CDOB certificate from BPOM is conducted online through the BPOM electronic system. The CDOB certificate authorises the company to conduct the wholesale of pharmaceuticals pursuant to their Indonesian KBLI. The period of validity of the CDOB certificate is five years and can be extended.

Medical Devices

The wholesale of medical devices is subject to authorisation from the Ministry of Health. Companies must obtain a Good Distribution Practice for Medical Devices (CDAKB) certificate from the Ministry of Health. The process to obtain the CDAKB certificate from the Ministry of Health is conducted online through the Ministry of Health electronic system. The CDAKB certificate authorises the company to conduct the wholesale of medical devices pursuant to their KBLI. The period of validity of the CDAKB certificate is five years and can be extended.

See 1.3 Different Categories of Pharmaceuticals and Medical Devices.

The importation and exportation of pharmaceuticals and medical devices in Indonesia are primarily overseen by the Ministry of Trade, the Ministry of Health, and BPOM.

The primary regulation for imports is the Minister of Trade (MOT) Regulation No 36 of 2023 on Import Policy and Provisions, as lastly amended by MOT Regulation No 8 of 2024, which outlines the requirements and procedures for importing goods into Indonesia. For exports, the primary regulation is MOT Regulation No 23 of 2023 on Export Policy and Provisions.

In the health sector, the Ministry of Health and BPOM play crucial roles in applying and enforcing the importation regulations of medical devices and pharmaceuticals. For instance, BPOM is responsible for issuing marketing authorisations for pharmaceuticals and oversees the adherence to these authorisations at the point of entry and beyond.

At the point of entry, the Indonesian Customs collaborates with the Ministry of Trade, the Ministry of Health, and BPOM to inspect and verify the compliance of imported pharmaceuticals and medical devices with all relevant regulations. After entry, BPOM continues to monitor and enforce compliance through routine inspections and market surveillance.

Any legal entity with a valid import business licence can act as the importer of record for pharmaceuticals and medical devices. However, importation of certain products requires specific documents issued by the relevant authorities (see 6.3 Prior Authorisations for the Importation of Pharmaceuticals and Medical Devices).

Importation of pharmaceuticals and medical devices require marketing authorisation of the products (see 3.5 Access to Pharmaceuticals and Medical Devices Without Marketing Authorisations). Import of pharmaceuticals also requires an SKI from BPOM. Additionally, certain products requires an import approval and/or surveyor report under the MOT 36/2023 as Amended.

BPOM 27/2022 as Amended provides that pharmaceuticals without marketing authorisation may be imported into Indonesia for certain purposes, such as:

• personal use;
• research;
• product and/or scientific development;
• donation;
• sample for marketing authorisation applications;
• clinical trials for registration requirements, product development, and/or scientific purposes;
• government programmes;
• urgent national interests;
• special use for healthcare services that cannot be produced domestically; and
• exhibitions.

Non-tariff regulations and restrictions in Indonesia are imposed based on the Harmonised System (HS) codes of the goods. The types of products subject to non-tariff regulations and restrictions are listed in the Ministry of Finance regulation, specifically Ministry of Finance (MOF) Regulation No 26/PMK.010/2022 of 2022, as amended by MOF Regulation No 10 of 2024.

Indonesia is a member of Association of Southeast Asian Nations (ASEAN) and the following free trade agreements that contain provisions on trade/regulatory facilitation. Among others, three notable examples include:

• ASEAN Trade in Goods Agreement (ATIGA);
• ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA);
• Regional Comprehensive Economic Partnership (RCEP).

Pharmaceuticals

The prices for pharmaceuticals in Indonesia are regulated to ensure affordability and accessibility, primarily governed by MOH 98/2015. Under this regulation, pharmaceutical industries are required to provide information on the highest retail price on the drug’s label, either as a nominal value in Indonesian rupiah (IDR) or as a formula, depending on the type of drug. This regulation covers branded drugs, generic drugs listed in the e-catalogue for government procurement, and generic drugs not listed in the e-catalogue.

For branded drugs, the highest retail price shall be in the form of a nominal value. The highest retail price is 128% of the HNA (Harga Netto Apotek or pharmacy net price), which is the price given by the pharmaceutical wholesaler to the pharmacies plus Value Added Tax (VAT). For generic drugs listed in the e-catalogue, the highest retail price shall be in the form of a formula of the highest retail price. For generic drugs not listed in the e-catalogue, the highest retail price must comply with the price determined by the MOH. The Ministry periodically issues decrees to set these prices.

Pharmacies, drug stores, and hospital or clinic pharmaceutical installations are required to sell drugs at prices equal to or lower than the highest retail price indicated on the label. If the price provided on the label is no longer valid, they must adjust accordingly to comply with current regulations.

Medical Devices

There is no specific regulation on pricing for medical devices.

The price levels of pharmaceuticals and medical devices in Indonesia do not generally depend on the prices for the same products in other countries but rather are mainly determined by the production cost and the variables introduced by the importation process. The government has previously expressed concerns about the high level of price for certain imported pharmaceutical materials which is caused by the fluctuating exchange rates in the Appendix to MOH 17/2017. 

In 2023, the Ministry of Health conducted a focus group discussion regarding access and production of innovative drugs, comparing drug prices in Indonesia and other countries. 

While there is no specific regulation directly addressing the reimbursement of pharmaceuticals and medical devices, the public healthcare system is effectively managed by the BPJS Health (Badan Penyelenggara Jaminan Sosial Kesehatan), an independent authority established to administer the national health insurance program.

BPJS Health mandates that every Indonesian citizen participates in the health security programme, regardless of any existing health insurance policies they may hold. It collects periodic contribution fees from all enrolled participants. These contributions are structured based on income levels.

BPJS Health’s coverage encompasses a wide range of health services, including the costs associated with pharmaceuticals and medical devices.

The extent and circumstances under which these costs are reimbursed from public funds are determined by the policies and operational guidelines set forth by BPJS Health.

There is no specific regulation which governs the application of cost-benefit analysis in determining what price should be paid for pharmaceuticals or medical devices, or in determining whether pharmaceuticals or medical devices should be reimbursed.

The regulations concerning prescriptions by physicians and dispensing by pharmacies are not aimed at curbing pharmaceutical spending, but rather aimed at ensuring the safety of patients and protecting the community from the circulation of unsafe drugs.

Pursuant to Article 320 of Law 17/2023, there are three types of drugs where a prescription is mandatory, namely potent drugs (obat keras), narcotics, and psychotropics. The dispensing of prescription drugs which circumvent the prescription requirement risks imprisonment of up to 12 years and fine of up to IDR5 billion. Additionally, the illegal distribution of narcotics and psychotropics carries a severe penalty wherein the death penalty may be imposed in certain circumstances.

If a medical app fulfils the definition of a “medical device” under laws and regulations (see 3.1 Product Classification: Pharmaceuticals or Medical Devices), it can be classified as a medical device. This includes scenarios where the medical app is used for medical purposes, such as diagnosing a disease. The definition also extends to software that can be deemed a medical device.

The regulations for telemedicine between healthcare facilities are outlined in MOH 20/2019.

Physicians can provide medical attention through mobile devices. However, they must meet specific regulatory criteria, including holding a valid practice license and complying with procedural guidelines set forth by the MOH and forthcoming government regulations. The telemedicine services must also be carried out by licensed medical or health personnel.

Further provisions on telemedicine between healthcare facilities and the public are expected to be detailed in a Government Regulation (GR) currently being drafted by the Indonesian government.

Pharmaceuticals

BPOM 2/2021 provides that a marketing authorisation is required to advertise medicines.

Medicines may be advertised through visual media, audio media, and audiovisual media. Visual media includes static displays, audio recordings, and video recordings on online platforms, including social media.

OTC medicines and limited OTC medicines may be advertised to the general public. Such advertisements generally require an approval from the Head of BPOM, except in certain circumstances such as advertisements in the form of a price list and/or product catalog.

In contrast, potent drugs, narcotics, and psychotropics can only be advertised to healthcare professionals. The information in the advertisements must align with the approved information in the marketing authorisation and the information must be objective, complete, and not misleading. 

The criteria for advertisements are further elaborated in Attachment I of BPOM 2/2021. For instance, medicine advertisements shall:

• not include claims such as “safe,” “harmless,” “no side effects,” or similar claims without adequate explanation;
• not include conditions unrelated to the medicine’s quality (eg, ISO certification);
• not make guarantee statements about the medicine’s efficacy or safety, such as using the word “certain”;
• not use settings or backgrounds that depict healthcare services, laboratories, schools, scientific meetings, mass gatherings, religious rituals, or other misleading environments.

Specific information must be included in advertisements for certain medicines, such as those for coughs, flu, asthma, and diarrhea medicines. Visual media advertisements must include contact information for public information services, which cannot be used for advertising purposes.

Potent drugs, narcotics, and psychotropics can only be advertised through:

• scientific medical print media;
• scientific pharmaceutical print media.

Medical Devices

MOH 76/2013 provides that medical devices may be advertised through print media, electronic media, information technology media, and/or outdoor media. For medical devices that require professional assistance for their use, advertising can only be conducted through:

• scientific medical and pharmaceutical print media; and/or
• scientific forums for the health profession environment.

Only medical devices with marketing authorisation can be advertised. Advertisements of a medical device must be objective, complete, non-misleading, in Indonesian language, Arabic numerals, and Latin letters, and must not contradict ethical standards. Exceptions to the language requirement are allowed if there are no equivalents.

Prohibited advertising materials includes misleading through emphasis, comparison, or omission of facts, creating fear or exploit myths, using testimonials, and misusing scientific publication quotes. MOH 76/2013 also prohibits medical device advertisements from directly or indirectly suggesting that the medical device can prevent, slow down, or reverse physiological changes or degenerative conditions associated with aging.

Medical device advertisements are prohibited from featuring health professionals or actors portraying health professionals or using health professional attributes, except in health magazines, health service advertisements, and scientific forums within the professional community.

Furthermore, advertisements for medical devices not specifically targeted at children must not feature children as actors unless accompanied by an adult. Advertisements specifically targeting children must not contain content that could disturb their psychological or mental well-being, nor exploit their trust, lack of experience, or innocence.

Electronic prescriptions are regulated and permitted in Indonesia, provided that the requirements and restrictions under the applicable laws and regulations are fulfilled. BPOM Regulation No 24 of 2021 on Supervision of the Management of Medicines, Pharmaceutical Ingredients, Narcotics, Psychotropics, and Pharmaceutical Precursors in Pharmaceutical Service Facilities provides that the use of electronic prescriptions in the dispensing of medicines at clinic pharmacy installations, hospital pharmacy installations, and community health centres is permitted under the following conditions:

• electronic prescription services can only be provided by facilities that issue the electronic prescriptions;
• a proper documentation system must be in place so that electronic prescriptions are traceable and can be presented when required.

The same conditions apply to the dispensing of narcotics, psychotropics, and pharmaceutical precursors in the category of prescription drugs.

Online sales of medicines are permitted in Indonesia, provided that the requirements and restrictions under the applicable laws and regulations are complied with. BPOM 8/2020 provides that the online circulation of medicines is only permitted for medicines classified as OTC medicines, limited OTC medicines, and prescription medicines.

Delivery of medicines sold online can be carried out either directly to the patient or sent to the patient. This delivery can be performed independently by a pharmacy or in collaboration with third parties in the form of a legal entity. Third parties delivering medicines are prohibited from providing information regarding the medicines.

All electronic transaction data related to the online circulation of medicines must be archived and traceable for a minimum period of five years.

Electronic health records are regulated under MOH 24/2022 which mandate that every healthcare facility must maintain electronic health records. Health records are considered sensitive data because they include patient identification, examinations, treatments, procedures, and other services provided to the patient.

Law 17/2023 regulates that medical records must be kept confidential by medical professionals, healthcare providers, and the management of healthcare facilities. According to Article 32 of MOH 24/2022, the confidentiality of medical records must be maintained even after the patient’s death. Furthermore, under Article 4 of Law 27/2022, health data and information are categorised as specific personal data, subject to stricter regulations to protect patient privacy and security.

There are specific requirements for cloud platforms that store electronic health records. Healthcare providers must register their electronic systems with the MOH. Digital storage, including cloud computing, must have a backup system that is located separately from the healthcare facility, backed up periodically, and documented in the standard operating procedures of each healthcare facility.

Patents are governed by Law No 13 of 2016 on Patents, as amended by Law No 6 of 2023 (“Law 13/2016 as Amended”). This law requires that an invention must be original, meaning that it is new and has not been disclosed anywhere in the world as of the date of registration. The invention must also involve an inventive step, meaning that it is not obvious to someone with the relevant technical skills; and for simple patents, it must be an improvement or enhancement of an existing product or process. Additionally, the invention must be industrially applicable, meaning that it can be produced or used in any industry.

Law 13/2016 specifically excludes certain inventions from being patentable. This includes the discovery of a new use for an existing or known product and new forms of existing compounds that do not offer a significant increase in efficacy, especially when differences in the chemical structure are already known. Other exclusions include processes or products that contradict legislation, religion, public order, or morality; methods of examination, treatment, medication, or surgery applied to humans and animals; theories and methods in the field of science and mathematics; living things, except microorganisms; and biological processes essential for producing plants or animals, except non-biological or microbiological processes.

Pharmaceutical and medical device products often encounter issues in meeting the inventive step requirement, particularly when the invention involves incremental improvements or new uses of known substances. It can be challenging to demonstrate that the invention is significantly different from existing technology and not obvious to professionals in the field. Additionally, for new forms of existing compounds, it is crucial to prove a significant increase in efficacy to avoid the practice of “evergreening”, where minor modifications extend patent protection without providing substantial therapeutic benefits.

Law 13/2016 provides that patents are given to inventions that fulfill certain requirements (see 9.1 Laws Applicable to Patents for Pharmaceuticals and Medical Devices). However, the law also states that discoveries in the form of new use for an existing and/or known product are not regarded as “inventions.” The same applies to discoveries in the form of new form of an existing compound that does not result in a significant enhancement of efficacy and has a known chemical structure difference from the related compound.

Law 13/2016 provides that the term of patents (including those of pharmaceuticals) cannot be extended. Under Law 13/2016, a patent is granted for a term of 20 years from the filing date and cannot be extended. Similarly, a simple patent is granted for a term of ten years and cannot be extended either.

Under Law 13/2016, infringement of a pharmaceutical or medical device patent occurs if there is manufacturing, use, sale, import, rental, delivery, or offering for sale or rent of a patented product without the patent holder’s consent. Applying for marketing authorisation can infringe a patent if the application process involves any of these prohibited activities.

The law is silent on whether imminent infringement is actionable. However, the inclusion of the word “use” could be broadly interpreted to include using the product in marketing authorisation applications. This broad interpretation suggests that if the application process involves activities like manufacturing or using the patented product, it could constitute infringement.

Law 13/2016 allows use of a patented invention for educational purposes, research, experiments, or analysis, provided that such use does not harm the legitimate interests of the patent holder and is not for commercial purposes.  Further, Law 13/2016 provides that the following are exempted from criminal provisions and civil actions:

• importation of a pharmaceutical product protected by a patent in Indonesia where the pharmaceutical product has been legally marketed in another country so long as the pharmaceutical product is imported in accordance with laws and regulations; and
• production of a pharmaceutical product protected by a patent in Indonesia within five years before the expiration of the patent protection for the purpose of processing the license for marketing the product after the patent expires.

Under Law 13/2016, the Indonesian government can implement a patent on its own in Indonesia based on considerations of urgent needs for the society’s interest, including in health-related areas such as patented pharmaceuticals that are needed to combat widespread diseases. This also includes pharmaceutical and/or biotechnology products that are expensive and/or needed to combat diseases that can cause sudden death in large numbers, result in significant disabilities, and constitute a Public Health Emergency of International Concern.

The implementation of a patent by the Indonesian government must be carried out in a limited manner, to meet domestic needs, and non-commercial in nature. The government must provide fair compensation to the patent holder as compensation for the implementation of the patent.

Further, the Minister of Law and Human Rights (MOLHR) Regulation No 30 of 2019 as amended provides that without prejudice to the rights of the patent holder, in the state of emergency, the MOLHR may grant a compulsory license to:

• produce pharmaceutical products for the treatment of human diseases;
• import pharmaceutical products that cannot yet be produced in Indonesia for the treatment of human diseases; and
• export pharmaceutical products produced in Indonesia for the treatment of human diseases upon the request of developing or least-developed countries.

The “state of emergency” includes:

• difficulties in accessing pharmaceuticals in the community;
• widespread diseases (endemic or pandemic); and/or
• other conditions determined by the Ministry of Health.

Law 13/2016 provides that the patent holder or the licensee has the right to file a lawsuit for damages with the Commercial Court against any person who, intentionally and without rights, performs the following activities:

• for product patents, see 9.4 Pharmaceutical or Medical Device Patent Infringement; and
• for process patents, using the patented production process to make goods or other actions as mentioned for product patents (see 9.4 Pharmaceutical or Medical Device Patent Infringement).

Upon request of the injured party, the Commercial Court can issue an order for provisional measures to:

• prevent the entry of goods suspected of infringing the patent and/or rights in relation to the patent;
• secure and prevent the disappearance of evidence by the infringer; and/or
• stop the infringement to prevent greater losses.

Procedures for a patent infringement action under Law 13/2016 are as follows:

• Registration of a lawsuit to the Commercial Court in the jurisdiction where the defendant resides or is domiciled. If one of the parties resides outside Indonesia, the lawsuit is registered with the Central Jakarta Commercial Court.  The Chief of the Commercial Court sets the hearing date no later than 14 days from the lawsuit registration date;
• The examination hearing of the lawsuit begins no later than 60 days from the lawsuit registration date. The bailiff summons the parties no later than 14 days before the first examination hearing date; and/or
• The judgement on the lawsuit must be pronounced no later than 180 days from the lawsuit registration date.

The injured party can also pursue criminal sanctions against the infringer for violating the patent.

Law 13/2016 does not outline specific procedures to determine the legality of actions proposed by a potential generic entrant. However, it states that producing a pharmaceutical product in Indonesia that is protected by a patent, within five years before the patent expires, is exempt from civil and criminal liabilities. This exemption is valid if the production is for the purpose of obtaining a marketing licence for the product after the patent expires.

Counterfeit pharmaceuticals and medical devices can amount to civil and criminal liabilities. 

Under Law No 20 of 2016 on Trademarks and Geographical Indications as amended by Law No 6 of 2023 (“Law 20/2016 as Amended”), registered trademark owners and/or registered trade mark licensees can file a lawsuit against unauthorised parties using a similar or identical trade mark for similar goods and/or services.

Unauthorised use of a similar trade mark can result in imprisonment of up to four years and/or fine of up to IDR2 billion. Violations causing health issues, environmental damage, or death can lead to imprisonment of up to ten years and/or fine of up to IDR5 billion.

As for patents, Law 13/2016 provides that producing a patented product is prohibited if conducted without consent of the patent holder. Violation of this provision can result in imprisonment of up to four years and/or fine of up to IDR1 billion.

From the consumer protection point of view, Law No 8 of 1999 on Consumer Protection provides that business actors are prohibited from producing and/or trading goods that do not comply with the applicable laws and regulations. Violation of this provision can result in imprisonment of up to five years and/or fine of up to IDR2 billion. 

Law 17/2023 provides that no person shall manufacture, produce, store, promote, and/or distribute pharmaceutical or medical devices that do not meet the standards and/or requirements for safety, efficacy/benefit, and quality. Violation of this provision can result in imprisonment of up to 12 years or a maximum fine of up to IDR5 billion.

Under the Indonesian Criminal Code, anyone who sells, offers, or delivers counterfeit drugs while concealing this fact, is subject to imprisonment of up to four years. Drugs are considered counterfeit if their value or benefits are reduced due to being mixed with other substances.

Law No 20 of 2016 provides that a trademark cannot be registered in some instances including if the trade mark contradicts national ideology, legislation, morality, religion, decency, or public order,       lacks distinctive character; and/or is identical to, related to, or merely describes the goods and/or services for which registration is applied for.

Indonesian legislations, including BPOM 27/2022 as Amended and MOH 62/2017, regulate and allow for the importation of genuine pharmaceutical and medical device products. The imported products must comply with local regulatory requirements, such as obtaining necessary marketing authorisations and meeting quality standards set by BPOM and the Ministry of Health. Additionally, trade marks used on imported products must not infringe on existing trade marks registered in Indonesia.

A design of pharmaceuticals and medical devices can be protected by industrial design rights so long as the design is considered to be a new industrial design under Law No 31 of 2000 on Industrial Designs. To qualify as new, the design must not be identical to any previous disclosure before the filing date or the priority date if priority rights are claimed. Disclosures include any publication or use in Indonesia or abroad.

Additionally, a design of a medical device can be protected by integrated circuit layout design rights if the design is original. An integrated circuit layout design is considered original if it is the independent work of the designer and was not common among designers at the time of its creation. Protection for an integrated circuit layout design begins from the first commercial exploitation or the filing date of the application, with a maximum application period of two years from the first commercial exploitation. This protection lasts for ten years.

There is no formal legislative framework or specific policies on data exclusivity for pharmaceuticals and medical devices in Indonesia.

The Indonesian government introduced several regulations and guidelines to handle the commercialisation and distribution of medicines and medical devices during the COVID-19 pandemic, with some rules being relaxed to facilitate these processes.

BPOM 27/2022 as Amended allows the importation of medicines through the SAS, provided that these medicines have obtained marketing authorisation or EUA from the originating country or other countries. The EUA permits the distribution of medicines without the usual marketing authorisation during public health emergencies.

MOH 51/2014 as Amended introduces flexibility for medical devices that meet the SAS criteria, allowing them to be imported without a marketing authorisation.

The Indonesian government issued GR No. 47 of 2021 which regulates that government must prioritise treatment and handling of outbreaks (including COVID-19) by providing capacity for isolation spaces of at least 30% of all beds for government-owned hospitals and 20% of all beds for privately-owned hospitals. This indirectly affected ongoing clinical trials by prioritising resources and infrastructure for COVID-19 treatment and containment.

BPOM 27/2022 as Amended provides that the importation of medicines into Indonesia can be done through the SAS, provided that the medicines have obtained marketing authorisation or EUA from the originating country or other countries.

MOH 51/2014 as Amended provides import flexibility for medical devices that meet the SAS criteria, allowing them to be distributed without a marketing authorisation. Characteristics of medical devices eligible for import through this scheme are:

• providing maximum benefit to society and the country;
• addressing national needs and stock availability;
• meeting safety, benefit, and quality standards;
• supporting government health policies; originating from official sources;
• being scarce in availability;
• lacking similar products;
• being incidental rather than for regular purposes; and
• not being intended for commercial purposes.

The Ministry of Health issued Circular Letter No HK.02.01/MENKES/455/2020, which provides an automatic extension of hospital operating licences that expire if the extension process is hindered due to COVID-19. The operating licence is declared still valid for a maximum of one year from the date the status of National Disaster or COVID-19 Public Health Emergency is revoked by the government. 

Additionally, the circular letter also provides a temporary extension for health worker practice licences that expire if the extension process is hindered due to COVID-19. The practice licence is declared still valid for a maximum of one year from the date the status of national disaster or COVID-19 public health emergency is revoked by the government.

MOT Regulation No 28 of 2020 (“MOT 28/2020”) provides import flexibilities for various health-related products. This regulation allows the importation of antiseptic products, antiseptic-treated/resin-coated tissues, protective clothing, surgical gowns, thermometers, infrared thermometers, and personal protective equipment without the need for a surveyor report from the country of origin or loading port.

MOT Regulation No 57 of 2020 provides that the MOT can suspend previously granted export approvals or reject new export approval applications if there is an increase of domestic demand in mask material, mask, and personal protective equipment.

The Appendix to MOH 24/2022 specifies that the government is engaged in research, development, and innovation specifically for COVID-19 countermeasures. This includes collaborations with foreign institutions and researchers to enhance the effectiveness of the pandemic response through innovative solutions.

Additionally, the Indonesian government created the "SatuSehat" platform, an Indonesian health service platform developed in response to COVID-19. SatuSehat provides data connectivity, analysis, and services to support and integrate various health applications across the country.

The Indonesian government has announced the intention to issue compulsory licenses for COVID-19-related treatments. Specifically, for the medicines Remdesivir and Favipiravir, the government has regulated the use of patents through compulsory licensing.

PR No 100 of 2021 governs the compulsory license for Remdesivir. This regulation provides the government will implement a compulsory license for Remdesivir for a period of three years. The MOH is responsible for appointing a pharmaceutical industry to produce the drug, with the condition that fair compensation is provided to the patent holder.

Similarly, PR No 101 of 2021 governs the compulsory license for Favipiravir. This regulation also provides a three-year period for the compulsory license.

In November 2020, the Head of BPOM issued Decree of the Head of BPOM No. HK.02.02.1.2.11.20.1126 of 2020 on Technical Guidance on the Implementation of Emergency Use Authorisation. 

While the EUA permits the distribution of medicines without marketing authorisation, the technical guidance still provides obligations for pharmaceutical industry holding the EUA to: ensure the quality of the drug; conduct clinical studies to ensure the efficacy and safety of the drugs in accordance with the indication in the EUA; conduct pharmacovigilance surveillance and reporting of side-effects to BPOM; and report realisation of use including the amount, batch number, and batch expiration date.

There were no regulations specifically governing the requisition or conversion of manufacturing sites due to COVID-19.

Following the outbreak of COVID-19, in March 2020, the President issued a President Instruction No 4 of 2020 (“PI 4/2020”) which instructs government officials to accelerate the implementation of procurement of goods and services to support acceleration in handling of COVID-19. To ease the parties in following up the PI 4/2020, the National Public Procurement Agency issued Circular Letter of the Head of Government Procurement Policy No 3 of 2020 which provides simple explanation to implement procurement of goods/services in the handling of emergencies in accordance with applicable procurement laws and regulations.