New requirements issued in May mandate that pharmaceuticals produced in Indonesia contain at least 30% or more raw materials that are domestically produced. The requirements from the Indonesian Ministry of Industry have been in development for months and have yet to be issued in their final form. As currently written, they permit companies to self-assess the level of local content in their products. The regulations do not require manufacturers to prove compliance with government authorities. But the government will rely in part on the local content level in making its pharmaceutical purchasing decisions.
The new regulation is designed to move Indonesia away from its heavy dependence on imported raw materials, support the development of more advanced domestic pharmaceutical and medical device industries, improve scientific research in Indonesia and spur improvements in the quality of raw materials produced for use in the healthcare industry.