CHAPTER 270 million. From the total population



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2030, estimated total population in Indonesia will be 270 million. From the
total population there will be estimate 25% suffer from several degenerative
diseases and impacted to the productivity and economic sector of Indonesia. The expanding middle class of Indonesia also boosts
demand in Indonesia’s pharmaceutical industry as the unhealthy lifestyles cause
diseases. Earlier, the World Health Organization (WHO) predicted that diseases
that are caused by unhealthy lifestyles will account for 87 percent of all
deaths in Indonesia by the year 2030. To resolve the issues, the
government formed Badan Penyelenggara Jaminan Sosial Nasional (known as BPJS)
start in 2001with the National Social Security Working Group and established
the regulation for Sistem Jaminan Sosial Nasional (SJSN) since 2000 until
Presiden Megawati legalized the regulation of the National Social Security
System. The vision and mission of BPJS to establish sustain and good health
insurance system in 2019 for all Indonesian population based on mutual

started in 1 January 2014, and based on year to date 2017 estimated 70% of
total Indonesian population or 181 million people registered as JKN-KIS
(Jaminan Kesehatan Nasional-Kartu Indonesia Sehat) within less than four years.

1. Population projection 2010-2035 (in thousand)

2. Population coverage BPJS per December 2016

provide the access to healthcare in BPJS era, the government and BPJS build and
engage the health facilities nationwide. The infrastructure and resource are
the main contributors for the implementation of the program. BPJS implement
referral system to ensure the coverage of the population, there are 14 referral
hospital under the ministry of health and more than 1,000 hospitals diagnose
and treat BPJS patients. BPJS implement effective and efficient systems with
web based registration and also partnership with primary healthcare to extend
the capacity and simplify the infrastructure management nationwide.


1. BPJS Healthcare facilities distribution

In JKN era, one of the concerns from the
government related to significantly increase number of cancer cases treated and
the mortality rate. In 2017, estimated 9 million worldwide patients with cancer
died and will reach 13 million in 2030. Refer to Riskesdas 2013 data,
Indonesian prevalence is 1.4 per 100 population or 347.000 people with cancer. This
disease need innovative and targeted drugs to prolong the survival and improve
the quality of life of the patients.

Graphic 2. Cancer estimated prevalence and
mortality rate in the world


Graphic 3. WHO 2014 Cancer mortality rate in
Indonesia (population 247.000)


4. WHO 2014 Cancer Incidences in Indonesia

2014, there was significant growth in pharmaceutical industry after the
socialization of JKN. Indonesia’s total pharmaceutical sales estimated 24% of
Healthcare expenditure in 20143. 
Based on 2015, 25 USD per capita pharmaceutical sales in Indonesia.


5. IPMG Ytd Sales 2014-2017

2015, there were significant growth 18% from multinational pharma company
associated under IPMG (International Pharmaceutical Manufacturer Group). The double
digit growth supported by the government program to reimburse chronic and
non-chronic diseases with universal health coverage. The number of patients
doubled and significantly increased after the ministry of health open the access
focus on type A hospital in big cities. After two years of the implementation,
the multinational pharma company start declining due to hurdles and challenges
regarding infrastructures in hospital, diagnosis of the disease and limited
resources while the government propose for lower scheme to the multinational
pharma company to support the sustainability of the universal health coverage
program in Indonesia. They are struggle with the revenues and also the
uncertainty of public reimbursement in Indonesia since the Government not yet
establish the open system for drugs listing and pricing negotiation.

Pharmaceutical industry profile

business has growth significantly in the last five years. For multinational pharma
company, with its unique role in developing new medicines to treat and improve
the lives of patients worldwide. Recognized as research based manufactures, thus
committed in researching, developing, manufacturing and marketing safe, also to
provide high quality medicines.

2. Pharmaceutical R&D spending

role and contribution of this research based manufacturers also as catalyst for
and advancement of an effective and integrated healthcare system in each
respective country. Engage the government and multi-stakeholders to enhance the
system and collaborate to support the resources in a continuous effort to bring
the latest innovations that are safe and fulfil international standards of
quality that have proven through extensive certified clinical trials also state
of the art manufacturing facilities.

providing full access to innovative medicines, the manufactures also respect
and comply with the prevailing local laws and regulations in line with the
highest ethical marketing codes. 

1.2.1.      Scope
of Business field

invest in Research and development of new medicines, it would analyze first the
chemical and biological compound thus potentially for treating new or existing
conditions. In 2015, there were 56 new medicines were launched and recently
more than 7000 compounds develop globally

3. Medicines in development (Selected categories)

worldwide, there were significantly decreased death rates for HIV/AIDS, cancer,
polios and measles. For example, HIV/AIDS death rates declined from 10.2 deaths
in 1990 to 2.0 deaths in 2014 (per 100.000 people) in United States. Today,
metabolic disease could be treated with oral therapy. The existing cancer
treatments could cut half annual death rates nowadays.

Indonesia, research based manufacturers have introduced more than 900 products
to treat several diseases such as cancers, infectious diseases, cardiovascular
diseases, etc.

Based on the Ministry of Health data in 2013, there were
206 pharmaceutical companies operating in Indonesia. The national average
annual growth in prescription drugs sales is estimated at
12%-13%. Currently, Indonesia’s pharmaceutical market value is estimated
at USD 6.24 billion, reflecting pharmaceutical spend of USD 26 per capita per
annum, with national companies controlling 75% of the market share. Ethical
drugs contributed 55%, or USD 3.2 billion, to the total market, while the
over-the-counter drugs made up the remaining 41%, or USD 2.2 billion.

In 2015, the country’s pharmaceutical sales-to-GDP ratio is
forecasted to shrink to 0.57% despite an expected increase in pharmaceutical
sales to USD 6.89 billion from USD 6.18 billion in 2014.  A pharmaceutical
sale per capita is estimated to go up to USD 26.9 billion in 2015 from USD 24.5
billion in 2014. The pharmaceutical sales-to-health spending ratio is predicted
to drop from USD 21.4 billion in 2014 to USD 20.5 billion next year.

Issue Faced

innovative market in Indonesia especially on BPJS era has been declining due to
budget limitation and several issues specifically in number of patients to be
covered and the program implementation nationwide such as numbers of doctors,
referral systems and drug distribution. In the future, there are opportunities
and threats rely on some uncertain factors for innovative manufacturers. To
ensure the growth and sustain the business, the manufacturers should to have
contingency and risk management by developing a scenario planning which is able
to answer the following key focal issue:

What is the future of the innovative
oncology manufacturers market in BPJS era in the coming 5 years? How could the
manufacturers able to growth and sustain the business?


Project Objectives

on the background and key focal issue above, this final project developed to
answer the following questions related to BPJS era in the coming 5 years:

1.      What
are the Key Driving Forces that influence innovative manufacturers specifically
in oncology market?

2.      What
are the Critical Uncertainties that affect innovative manufacturers market?

3.      How
does the Scenario Framework of the innovative manufacturers?

4.      What
are the Implications and Options available for each scenario?



Project Limitations

scenario planning will analyze external and internal data and in narrative forms
as well as qualitative base on the key driving forces and critical
uncertainties of innovative manufacturers specifically oncology market in BPJS
era. The development of scenario is to answer all the questions in these final
project objectives.

limitation of this final project, there are some points thus need to be convey
as mentioned below”

1.      The
time range for the scenario planning development is limited to 5 years forward
i.e. until 2022. The selection of 5 years’ time frame is based on the
government program (President election) and product life cycle

2.      Interview
session involved external and internal stakeholders. External stakeholders
involved Ministry of Health, BPJS, hospitals management. Internal stakeholders
involve cross functions i.e. Market Access, Marketing, Sales, and Medical team.


Research Methodology

1.6.1.      Project

of scenario planning in this final project is based on business issues
exploration that includes internal and external analysis, strategy framework.
In this approach, therios those will be used as mentioned below:

1.      External

a.       General
environment analysis (PESTEL)

b.      Industry
analysis (Porter’s 5 Forces)

2.      Internal

a.       Resources,
capabilities and competencies analysis

b.      Resource
based analysis

c.       Value
chain analysis

3.      Strategy

a.       SWOT


1.6.2.      Project

final project methodology is based on desk and field research. Desk research using
third party data, publication and information from the Internet and media. For
field research is based on interview sessions with external and internal





3.      Business
Monitor International (2016) BMI Pharmaceutical and Healthcare Database.






9.      Evaluate Pharma (2016) World Preview 2016, Outlook to 2022.
London: Evaluate Ltd., p 27.
rs/607-YGS-364/images/wp16.pdf  (Graphic 2)

10.  PhRMA (2016) Chart Pack Biopharmaceuticals in Perspective.
Washington DC: Pharmaceutical Research and Manufacturers of America, p 22.
 (Graphic 3)

11.  Evaluate Pharma (2016) World Preview 2016, Outlook to 2022.
London: Evaluate Ltd., p 29. rs/607-YGS-364/images/wp16.pdf  

12.  Analysis Group (2013) Innovation in the Biopharmaceutical
Pipeline: A Multidimensional View. http://www.analysisgroup.