The Pharma Legal Handbook: Indonesia

The key facts about biosimilars and biologics in Indonesia. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

1. Are biosimilar medicines considered the same as generic medicines in your country?

No. Head of BPOM Regulation No. 17 of 2015 on Guidelines for Assessment of Biosimilar Products (“BPOM Reg 17/2015”) defines Biosimilar Product or Similar Biotherapeutic Product as a biological product with similar efficacy, safety and quality profiles as the approved biological product. The regulation explains that in contrast to chemically synthesized generic drugs, biosimilar products are extremely complex, intricate, and go through very specialized manufacturing processes. Thus, the assessment of a biosimilar product cannot be equated with synthesized generic drugs.

 

2. Are all biologic medicines, including biosimilar medicines, patentable in your country?

Biologic medicines are generally patentable in Indonesia insofar that they comply with the criteria under the Patent Law. A patent can be granted to an invention that fulfils the following criteria:

• original, meaning that as of the date of registration the invention is different to any technology that has been disclosed;
• contains inventive steps, meaning that the invention has not been predicted by persons with the relevant technical skills. For a simple patent, the invention must be an improvement of the existing product or process and has practical use; and 
• is applicable to industry.

Patent cannot be granted to the following:

• a process or product whose announcement, use, or implementation is contradictory to legislation, religion, public order, or morality;
• methods of examination, treatment, medication and/or surgery applied to humans and/or animals;
• theory and methods in the field of science and mathematics;
• living entities, except microorganisms; or
• biological processes that are essential for producing plants or animals, except for nonbiological processes or microbiological processes. 

Although not specifically exempted from patentability under the Patent Law, biosimilar medicines may not fulfil the ‘originality’ or the ‘inventive’ criterion, as they have the same properties as their originators.

 

3. Is there a specific regulatory framework for the marketing authorization of biosimilar medicines in your country? If yes, what is the regulatory framework for the authorization of biosimilar medicines?

No, the same regulatory framework for marketing authorization applies to drugs, biologics, and biosimilars. The authorization is primarily stipulated under: (i) MOH Regulation No. 1010/MENKES/PER/XI/2008, as amended by MOH Regulation No. 1020/MENKES/PER/XII/2008 on Drug Registration; (ii) MOH Regulation No. 14 of 2021 on Business Activities and Products Standards for the Implementation of Risk-Based Business Licensing in the Health Sector; (iii) BPOM Regulation 24/2017; and (iv) BPOM Reg 10. The only difference is the assessment criteria and procedure during the application process – for biosimilars, these are currently regulated under BPOM Reg 17/2015. 

 

4. What kind of data package is needed to obtain approval for a biosimilar drug? Is this any different to the requirements for the original Biologics drug?

As with original biologics drugs, the authorization process for a biosimilar drug comprises pre-registration and registration phases. In each phase, the applicant must submit documents containing specific data as referred to under BPOM Regulation 24/2017 and BPOM Reg 10. For example, quality documents (e.g., information on manufacturing process and source of active ingredients), non-clinical documents (nonclinical overview), clinical documents (clinical overview). 

Specific for biosimilars, BPOM Reg 17/2015 also requires the applicant to carry out certain evaluations, such as a comparability study, in which a comprehensive physicochemical and biological characterization of the biosimilar product in a head-to-head comparison with the comparator product must be performed. The applicant must also provide scientific evidence to justify the selection of comparator product, with special attention to quality aspects.

 

5. What are the requirements for the choice of the reference comparator product?

BPOM Reg 17/2015 defines a comparator product as a biological product used in direct comparison (head-to-head) with biosimilar products in the comparability test to show similarities in terms of quality, safety and efficacy.

The selection of comparator product for comparability studies should be based on the following principles:

• The active substance of a biosimilar product must be similar (both molecular and biological effects) with the active substance of the comparator product that has been approved for circulation in Indonesia;
• The selected comparator product must be used as a reference in all comparability studies for aspects of quality, safety, and efficacy, in order to produce coherent data and conclusions;
• The dosage form, strength and method of administration of the biosimilar product must be the same as that of the comparator product;
• Where there is a difference between the biosimilar product and the comparator product, the difference should be justified by appropriate studies on a case-by-case basis. Consideration of the safety factor is prioritized.

 

6. Can the comparator product be sourced from another regulatory jurisdiction? If yes, what are the data needed to support this approach?

Yes, although locally sourced comparator products should be prioritized.

BPOM Reg 17/2015 stipulates that the comparability test of biosimilar products should to the fullest extent possible use a comparator product that has been approved in Indonesia. However, if this is not possible, the selection of comparator product can be made based on the following criteria:

• The originator product does not exist in Indonesia
  • If the originator product is not available in Indonesia, it is necessary to first look at the distribution status of the originator product. If the originator product has been approved in countries with established evaluation systems, it can be used as a comparator product. However, if the originator product has been rejected for registration in Indonesia, the reason for the rejection must first be reviewed. If the reason for the rejection of the originator product is related to aspects of quality, safety and efficacy, the product cannot be used as a comparator product.
• The manufacturer of the originator product no longer produces the originator product
  • If the originator product’s manufacturer no longer produces the originator product, the comparator product used is the most established biological product. Biological products that are declared the most established are those that have been approved based on complete data on quality, safety, and efficacy, and have been circulating for a long time without any issues related to quality, safety and efficacy aspects.

The comparability of the biosimilar product with the selected comparator product should be discussed, both the final drug product and the active substance. The patent name, dosage form, formulation and dosage quantity of the comparator product must be clearly identified, including a discussion on the half-life of the comparator product against the quality profile. In order to ensure that the molecular structure of the biosimilar product can be compared with that of the comparator product, proper comparability studies of the active substance must be carried out. The contamination ratio should also be considered. In cases where an analysis of the quality aspects of the active substance of the reference product can be carried out at the final product stage, testing of the isolated active substance may not be necessary.

The applicant must demonstrate, using a reliable method of analysis, that the active substance used in the comparability study is representative of the active substance in the comparator product. If the analytical method cannot compare the active ingredients of the biosimilar product, the applicant must adopt another suitable approach to obtain a representative active substance from the comparator product and then carry out a comparative analysis. This approach must be properly validated to demonstrate the suitability of the sample preparation process, including comparative tests and data on the active substance of the comparator product.

 

7. How are the prices of biosimilar medicines regulated? Is this any different from the requirements for the original Biologics drug?

No difference. The applicant is required to submit pricing for each packaging (to the smallest packaging) that will be applied across the territory of the Republic of Indonesia during the registration process to obtain MA.

 

8. What is the reimbursement policy for biosimilar medicine? Is this any different from the requirements for the original Biologic drug?

Similar to biologics drugs, there is no regulation on reimbursement of biosimilar medicine in Indonesia. The Indonesian Government, however, manages a public healthcare system via an independent authority (known as Health BPJS). 

Anyone, regardless of whether they already have another health insurance policy, is obligated to become a participant in the health security program managed by the Health BPJS. It will charge members periodical contribution fees. The Indonesian Government will provide contribution aid to the Health BPJS as an additional source of funding for the purpose of sponsoring those on low incomes so that they can be covered by the health security program.

The Health BPJS will cover health services expenses of its participants in accordance with the health security program regulations.

 

9. Does biosimilar competition impact the reimbursement policy of the originator reference products?

No.

 

10. What is the legal framework for biosimilar medicines prescribing (clinical decision maker) and dispensing (pharmacy level, hospital or retail)? Is this any different to the requirements for the original Biologics drug?

There is no specific legal framework for prescribing and dispensing biosimilars. The same regulations that apply to drugs and biologics also apply to biosimilars. Prescribing must always be done by licensed doctors. Only licensed pharmacists are allowed to dispense prescription drugs, biologics, and biosimilars.

 

11. Is the system considering physician-led switching and/ or pharmacy-level substitution (without involvement of the clinical decision maker)?

No.

 

12. What are the post-authorisation requirements (including pharmacovigilance, risk management plans, post-approval studies) for biosimilar medicines? Is this any different to the requirements for the original Biologics drug?

Pharmacovigilance is part of the process for authorization of biosimilars. BPOM Reg 17/2015 stipulates that as existing technology has not been able to specifically identify the differences between biosimilar products and their originators, producers of biosimilar products must carry pharmacovigilance studies. The applicant must submit safety specifications and pharmacovigilance plans at the time of application for MA.

The post-distribution safety report must contain all information about the tolerability of the product approved by the BPOM. Safety information should be scientifically evaluated and should include an evaluation of the frequency and causality of unwanted effects.

 

13. Are there specific policies and requirements for labelling biosimilar medicines in the event of second medical use patents? Is this any different from the requirements for the original Biologic drug?

There are no specific policies and requirements for biosimilars labelling in the event of second medical use patents. The same regulations that apply to drugs and biologics also apply to biosimilars. BPOM Regulation 24/2017 provides a comprehensive list of minimum information that must be contained in each type of labeling.

Please note that second medical use of biologics and biosimilars is not patentable under Indonesian law. Article 4(f) of the Patent Law stipulates that a patentable invention does not include: (i) discovery of new use of an existing/known product; and/or (ii) a new form of an existing compound that does not offer a significant increase in efficacy and there are already known differences in the associated chemical structure of the compound.

 

14. Have there been any significant legal/judicial developments in relation to biosimilars in your country? (Including but not limited to IP, procurement, competition, misleading information campaign, access to reference comparator product)

None that we are aware of.

 

15. Are there proposals for reform or significant change to the legal, regulatory, procurement of biosimilars? If yes, when are they likely to come into force?

None that we are aware of. We spoke with an official at the BPOM in May 2021 and were told that the BPOM currently has no plan to issue a new regulation on biosimilars.

Also from this Legal Handbook

The low-down on the situation regarding cannabinoid drugs, medical cannabis and opioids in Indonesia. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

 

Cannabinoid Drugs

1. Are Cannabinoid Drugs authorized in your country?

There is no definition of “Cannabinoid” under the Indonesian law. In general, under Law No. 35 of 2009 on Narcotics, as amended by Omnibus Law (“Narcotics Law”), all substances which are categorized under Class 1 Narcotics are prohibited to be used in the health sector, including as medicines.

Based on the most recent classification of narcotics as stipulated under MOH Regulation No. 22 of 2020 on the Amendment to Narcotics Classification (“MOH Regulation 22/2020”), all part and derivatives of cannabis and Tetrahydrocannabinol are categorized under Class 1 Narcotics. Pursuant to Narcotics Law, Category 1 Narcotics can only be used for the interest of science and technological development and for diagnostic reagents and laboratory reagents after obtaining approval from the MOH upon the recommendation of the Head of BPOM.

 

2. What are the regulatory authorities with jurisdiction over Cannabinoid Drugs?

Not applicable.

 

3. Is there a specific regulatory framework for the authorization, pricing, and reimbursement of Cannabinoid Drugs?

Not applicable.

 

4. Which are the cannabinoid drugs that have received market approval to date?

Not applicable.

 

5. Who can prescribe Cannabinoid Drugs?

Not applicable.

 

6. Is there a list of doctors authorized to prescribe Cannabinoid Drugs?

Not applicable.

 

7. What approvals or notifications are required to prescribe Cannabinoid Drugs?

Not applicable.

 

8. Which organizations are authorized to sell/distribute Cannabinoid Drugs available?

Not applicable.

 

9. Is there a list of retailers/distributors authorized to sell Cannabinoid Drugs?

Not applicable.

 

10. Are there proposals for reform or significant change to the regulation of Cannabinoid Drugs?

To date, we are not aware of any proposal to legalize the use of Cannabinoid Drugs.

 

11. When are they likely to come into force?

To date, we are not aware of any proposal to legalize the use of Cannabinoid Drugs.

 

Medicinal Cannabis

12. Is Medicinal Cannabis authorized in the country?

No. Medical Cannabis is prohibited in Indonesia as all parts and derivatives of cannabis are categorized as Class 1 Narcotics, which are prohibited for healthcare use.

 

13. What are the regulatory authorities with jurisdiction over Medicinal Cannabis?

Not applicable.

 

14. What is the regulatory framework for the authorization, pricing, and reimbursement of Medicinal Cannabis?

 

Not applicable.

 

15. How is the production and import of Medicinal Cannabis regulated and by which agencies/authorities?

Not applicable.

 

16. What approval or notifications are necessary to produce or import Medicinal Cannabis?

Not applicable.

 

17. What is the regulatory framework for the marketing and distribution of Medicinal Cannabis?

Not applicable.

 

18. How can patients obtain Medicinal Cannabis?

Not applicable.

 

19. Who can prescribe Medicinal Cannabis?

Not applicable.

 

20. Is there a list of doctors authorized to prescribe Medicinal Cannabis?

Not applicable.

 

21. What approvals or notifications are required to prescribe Medicinal Cannabis?

Not applicable.

 

22. Where is Medicinal Cannabis available?

Not applicable.

 

23. Is there a list of retailers authorized to sell Medicinal Cannabis?

Not applicable.

 

24. Are there proposals for reform or significant change to the regulation of Medicinal Cannabis?

There have been several public discussions on whether cannabis or its derivatives should be used or utilized for medical purposes. However, the government maintains its position that the cannabis is prohibited for any use. 

There was a case where a man used cannabis to treat his wife who was diagnosed for a rare disease. The Indonesian police arrested the person for violating the prohibition under Narcotics Law and the court convicted the person with imprisonment and fines.

 

Opioid Drugs

25. Are Opioid Drugs authorized in your country?

There is no definition of ‘Opioid Drugs’ under the Indonesian Law. None-theless, the Narcotics Law stipulates that substances that are categorized as Class 2 and/or Class 3 Narcotics may be used for medical purpose upon complying to business licensing from the central government. Thus, in this chapter, reference to Opioid Drugs means drugs having substances categorized as Class 2 and or Class 3 Narcotics.

Class 2 and Class 3 Narcotics under MOH Regulation 22/2020 include, among others, fentanyl, oxycodone, morphine, codeine, methadone, etc.

 

26. What are the regulatory authorities with jurisdiction over Opioid Drugs?

BPOM.

 

27. Is there a specific regulatory framework for the authorization, pricing, and reimbursement of Opioid Drugs?

In general, Opioid Drugs should be treated the same as any other drugs. In principle, the products must obtain an MA from RBA OSS System on behalf of BPOM before being distributed. 

Further, the manufacturing and distribution of Opioid Drugs must adhere to some specific requirements as mandated by the Narcotics Law.

 

28. Which are the Opioid drugs that have received market approval to date?

The list of the drugs that have obtained MA in Indonesia is publicly available in BPOM’s website, https://cekbpom.pom.go.id/

The following are some examples of Opioid Drugs that have obtained MA from BPOM:

• fentanyl (Durogesic);
• morphine (MST Continus);
• codeine (Codikaf, Coditam, Codipront);
• oxycodone (Oxynorm, Oxyneo)

 

29. Who can prescribe Opioid Drugs?

Same as prescribed drugs, any qualified doctors can prescribe Opioid Drugs.

 

30. Is there a list of doctors authorized to prescribe Opioid Drugs?

No, any qualified doctor can prescribe Opioid Drugs.

 

31. What approvals or notifications are required to prescribe Opioid Drugs?

There is no approval or notification required for any qualified doctor to prescribe Opioid Drugs.

 

32. Which organizations are authorized to sell/distribute Opioid Drugs available?

Distribution of Opioid Drugs may only be conducted by the specially licensed pharmaceutical manufacturers, pharmaceutical wholesalers, and state pharmaceutical supply storage facilities (sarana penyimpanan sediaan farmasi pemerintah).

Further, the selling and dispensing of Opioid Drugs to the patient may only be conducted by:

• hospitals;
• public health centers (pusat kesehatan masyarakat or puskesmas);
• pharmacies; and
• clinics. 

In certain cases, doctors may dispense Opioid Drugs directly to patients, for example, when doctors treat patients with injections or in rural areas where no pharmacies are available.

 

33. Is there a list of retailers/distributors authorized to sell Opioid Drugs?

No, there is no such list of authorized distributors/retailers of Opioid Drugs. Any pharmacies can sell and dispense Opioid Drugs based on prescriptions issued by doctors.

 

34. Are there proposals for reform or significant change to the regulation of Opioid Drugs?

To the best of our knowledge, there is no proposal to reform the regulation on Opioid Drugs.

 

35. When are they likely to come into force?

To the best of our knowledge, there is no proposal to reform the regulation on Opioid Drugs.

 

 

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Click the following links to read more legal articles from Indonesia:

1. Regulatory Pricing and Reimbursement Overview
2. Preclinical and Clinical Trial Requirements
3. Marketing, Manufacturing, Packaging & Labeling, Advertising
4. Traditional Medicines and OTC Products
5. Product Liability
6. Patents & Trademarks
7. Regulatory Reform
8. Cannabinoid Drugs, Medicinal Cannabis and Opioid Drugs

Also from this Legal Handbook

Patents and trademarks in Indonesia – a comprehensive legal overview. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

 

1. What are the basic requirements to obtain patent and trademark protection?

In order to obtain patent or trademark protection, the applicant must register them with the Directorate General of Intellectual Property (“DGIP”).

Trademark registrations are valid for 10 years and may be extended for another period of 10 years indefinitely. 

Patent registrations are valid for a single term of 20 years (10 years for simple patents) as of the date of registration and is not renewable.

 

2. What agencies or bodies regulate patents and trademarks?

DGIP of the Ministry of Law and Human Rights (“MOLHR”).

 

3. What products, substances and processes can be protected by patents or trademarks and what types cannot be protected?

Patents

Under the Patent Law, a patent can be granted to an invention that fulfills the following criteria:

• Original, meaning that as of the date of registration the invention is different to any technology which has been disclosed;
• Contains inventive steps, meaning that the invention has not been predicted by persons having the relevant technical skills. While, for a simple patent, the invention must be an improvement/perfection of the existing product or process; and 
• Is applicable to industry.

A patentable invention does not include: (i) discovery of new use of an existing/known product; and/or (ii) a new form of an existing compound that does not offer a significant increase in efficacy and there are already known differences in the associated chemical structure of the compound.

Patent cannot be granted to the following:

1. process or product whose announcement, use, or implementation is contradictory with legislation, religion, public order, or morality;
2. methods of examination, treatment, medication and/or surgery applied to humans and/or animals;
3. theory and methods in the field of science and mathematics;
4. living things, except microorganisms; or
5. biological processes that are essential for producing plants or animals, except for nonbiological processes or microbiological processes.

Trademarks

Trademarks are granted to signs that can be displayed graphically in the form of images, logos, names, words, letters, numbers, color arrangements, in the form of 2 and/or 3 dimensions and / or 3 (three) dimensions, sounds, holograms, or a combination of those elements to distinguish goods or services produced by people or legal entities in the activities of trading goods or services.

 

4. How can patents and trademarks be revoked?

Patents

Patents can be revoked partially or entirely based on:

• request from the patent holder that is granted by the MOLHR;
• final and binding decision of a court to revoke the patent;
• patent revocation decision is issued by the Patent Appeal Commission; or
• The patent holder does not fulfill the obligation to pay annual fees. 

 

Trademarks

Revocation of registered trademarks can be done on the basis of the following:

1. request by the registered trademark owner or its proxy;
2. initiative of the MOLHR upon the recommendation of the Mark Appeal Commission if the trademark:
   – has similarity in principal and/or its entirety with a Geographical Indication;
   – is contrary to the state ideology, legislation, morality, religion, decency, or public order; or
   – has similarity in its entirety with traditional cultural expressions, non-object cultural heritage, or names or logos that have been hereditary traditions.
3. final and binding decision of the commercial court upon a claim by interested third parties that the trademark has not been used for 3 consecutive years in the trading of goods and/or services from the date of registration or last use.

In general, registration of patents and trademarks in Indonesia applies territorially. Thus, any use of patent and trademark in the territorial of Indonesia will be protected only upon the registration of which by the DGIP.

 

5. Are foreign patents and trademarks recognized and under what circumstances?

Patents

Indonesian Patent Law recognizes three types of patent registration:

1. Domestic Patent Registration;
2. Registrations of patents with priority rights; and
3. Registration of patents using the Patent Cooperation Treaty 1970 (“PCT”) administered by Intellectual Property Organization (WIPO).

The PCT Systems makes it possible to seek patent protection for an invention simultaneously in many countries by filing a single “international” patent application instead of filing several separate national or regional patent applications. Nevertheless, the registration of patent in Indonesia by utilizing PCT Systems will still require formal registration with the DGIP.

 

Trademarks

As one of the members of the World Trade Organization (“WTO”), Indonesia is bound by the provisions of Trade Related Aspects of Intellectual Property Rights (TRIPs). Therefore, Indonesia recognizes priority rights. 

Priority Rights is the right for legal entities/ individuals (holders of rights to the trademark) to submit applications originating from countries incorporated in the Paris Convention for the Protection of Industrial Property or Agreement Establishing the WTO to obtain recognition that the date of receipt in the country of origin is the priority date in the destination country which is also a member of one of the two agreements, as long as the submission is carried out within a predetermined period based on the Paris Convention for the Protection of Industrial Property.

Recently, Indonesia officially become the 100th member of the Protocol Relating based on the Madrid Agreement on the International Registration of Marks. Membership was made official by the deposit of an Indonesian instrument of accession, at the World Intellectual Property Organization on 2 October 2017. The Madrid Protocol came into force in Indonesia with the issuance of Government Regulation No. 22 of 2018 (“Regulation 22/2018”) on the Registration of International Marks based on the Madrid Agreement on the International Registration of Marks. Through the introduction of Regulation 22/2018, Indonesian trademark holders will able to utilize the Madrid System as an alternative method for the registration of their marks within the jurisdiction of Madrid Protocol member states and/or organizations.

Most non-patent/trademark barriers to competition are outlined in various chapters above.

 

6. Are there any non-patent/trademark barriers to competition to protect drugs or devices?

Most non-patent/trademark barriers to competition are outlined in various chapters above.

 

7. Are there restrictions on the types of drugs or devices that can be granted patent and trademark protection?

There are no restriction on the type of drugs or medical devices that can be granted patent and trademark protection in Indonesia to the extent that the products have complied with the requirements for patent and trademark registration, as well as with the prevailing laws and regulations, particularly in the health and intellectual property sectors.

 

8. Must a patent or trademark license agreement with a foreign licensor be approved or accepted by any government or regulatory body?

Every license agreement of patent or trademark that is registered in Indonesia must be filed with the DGIP for recordation. Otherwise, the license agreement cannot be enforceable on third parties.

Thus, assuming that the foreign licensor has registered the patent or trademark in Indonesia with the DGIP, the license agreement must be submitted to the DGIP. However, if the foreign licensor has not registered its patent or trademark in Indonesia, there is no requirement to register the patent or trademark license agreements with a foreign licensor.

 

 

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Click the following links to read more legal articles from Indonesia:

1. Regulatory Pricing and Reimbursement Overview
2. Preclinical and Clinical Trial Requirements
3. Marketing, Manufacturing, Packaging & Labeling, Advertising
4. Traditional Medicines and OTC Products
5. Product Liability
6. Patents & Trademarks
7. Regulatory Reform
8. Cannabinoid Drugs, Medicinal Cannabis and Opioid Drugs

Also from this Legal Handbook

Product liability of drugs in Indonesia – a legal guide. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

 

1. What types of liability are recognized in your jurisdiction?

In general, product liability in Indonesia is governed under the Indonesian Civil Code and Law No. 8 of 1999 on Customers Protection (“Customers Protection Law”). The liabilities of the business enactors can be divided into 2 types, namely civil liability and criminal liability.

Civil Liability

The Consumer Protection Law stipulates that business enactors shall be responsible to pay compensation for damages, contamination and/or loss suffered by consumers as a result of consuming or using the goods and/or services produced or traded by the business enactors. The compensation referred to above can be in the form cash refund or replacement of goods/services which are of the similar type or of comparable in value, or medical treatment and/or provision of sympathetic care in accordance with the prevailing laws and regulations. Moreover, contractual product liability will also apply where a valid contract exists between the business enactors and the consumers under the provisions of the Civil Code.

Please be advised that both the Civil Code and the Consumer Protection Law adopt a system of fault-based product liability. Therefore, the business enactors shall be liable to pay compensation only if it can be proven with valid evidence that the damages were incurred due to the fault of the business enactors. Please note, however, that pursuant to the Consumer Protection Law, the burden to prove the non-existence of a ‘fault’ element is borne by the business enactors. 

 

Criminal Liability

If a business enactor violates its statutory obligations, it will be subject to both civil and criminal sanctions as stipulated in the Consumer Protection Law and/or in other relevant laws and regulations. The compensation payment shall not release the business actor from its criminal liability. With respect to this criminal liability, pursuant to the Consumer Protection Law, the business enactor holds the burden of proof that the business enactor is not at fault. The business enactor’s burden of proof, however, shall not prevent the prosecutor from submitting evidence regarding the fault of the business actor. 

 

2. How do these types of liabilities apply to the manufacturers of drugs and devices?

The holders of MAs are responsible for the efficacy, quality and safety of the drugs or medical devices. Further, there is no specific regulation on liabilities of the manufacturers of drugs.

As a general rule, the Consumer Protection Law stipulates that the business enactors are prohibited from producing and/or trading goods and/or services, which:

1. do not fulfill or conform to the required quality standard and the prevailing laws and regulations;
2. do not conform to the net weight/volume and calculation number as stated in the label or the etiquette of the said goods and/or services;
3. do not conform to the size, dosage, weight, and calculation number according to the actual measure;
4. do not conform to the condition, warranty, superiority or efficacy as stated in the label, etiquette, or description of the said goods and/or services;
5. do not conform to a certain quality, level, composition, processing, style, mode or use as stated in the label or description of the said goods and/or services;
6. do not conform to the promise stated in the label, etiquette, description, advertisement, or sales promotion of the said goods and/or services;
7. do not mention the expiry date or the best usage/utilization period of the said goods and/or services;
8. do not comply with the provision to produce the goods according to halal methods, as denoted by the “halal” mark put in the label;
9. do not have a label or provide an explanation of the goods including the name of the goods, the size, the net weight/volume, the composition, the direction of use, the manufacturing date, the side effects, the name and the address of the business enactor and other information which must be included in the label;
10. do not mention the information and/or direction of use of the goods in Indonesian language pursuant to the prevailing laws and regulations; or
11. are goods for trade that are damaged, defective, or used, and contaminated without providing complete and true information about such goods.

 

3. Does potential liability extend to the manufacturer only or could claims extend to corporate executives, employees, and representatives?

The liable person in this regard will fully depend on further examination of the default concerned. However, speaking of a limited liability, the directors of a company basically shall not be held personally liable for the corporation’s obligations or damages arising from or in connection with any actions or discretions taken by the directors to manage the corporation. Nevertheless, the directors may be held personally liable if it is established that the said obligations or damages were incurred as the result of the directors’ fault or negligence in performing their duties.

If any actions conducted by the Directors can be regarded as criminal offences under Indonesian criminal law, a criminal investigation can be initiated against the said Directors and they may be charged with a criminal offence. A person or corporation, however, can only be held criminally liable if their fault of negligence is proven according to the relevant evidentiary standard.

Similar with the directors, potential liability may extend to the employees or representatives of the manufacturers if it can be proven that there is fault or negligence made by the concerned person. 

 

4. How can a liability claim be brought?

With reference to Consumer Protection Law, consumers can file a lawsuit against a business enactor (the manufacturer) by filing a claim to the Consumer Dispute Settlement Agency (“BPSK”) or filing a civil lawsuit with the relevant district court.

Further, consumers may also file a report to the Indonesian police if there is a criminal element violated by the business enactor. The police will have discretion to follow up the report as well as investigating the alleged violation. If the investigation shows that there is strong evidence against the business enactor, the police will hand over the case to the prosecutor for further processing. 

 

5. What defenses are available?

The Consumer Protection Law also provides certain defences that may be used by the business enactor (manufacturer) to protect its interests against the consumers’ claim, namely:

1. the goods are not intended to be distributed;
2. the defect in the goods emerges later;
3. the defect in the goods emerges as a result of compliance with the provisions of the goods’ qualification;
4. the damage is caused by the negligence of the consumers; or
5. he claim period of 4 (four) years after the purchase of the goods, or the passage of the period agreed upon, has lapsed.

 

 

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Click the following links to read more legal articles from Indonesia:

1. Regulatory Pricing and Reimbursement Overview
2. Preclinical and Clinical Trial Requirements
3. Marketing, Manufacturing, Packaging & Labeling, Advertising
4. Traditional Medicines and OTC Products
5. Product Liability
6. Patents & Trademarks
7. Regulatory Reform
8. Cannabinoid Drugs, Medicinal Cannabis and Opioid Drugs

Also from this Legal Handbook

The ins and outs of regulatory reform in Indonesia. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

 

1. Are there proposals for reform or significant change to the healthcare systems?

The following proposal for reform may affect the pharmaceutical industry in Indonesia:

Bill on Drugs and Food Supervision Law

The Bill has been submitted by the Indonesian government to the House of Representatives for deliberation. Once approved, the law will serve as an umbrella for regulations on supervision of foods and drugs, which covers a whole range of aspects in the foods and drugs industry, including: production; distribution; export and import; promotion and advertising; laboratory testing, recalls and disposal; liabilities; and criminal sanction.

 

2. When they are likely to come into force?

It is not clear and difficult to predict on when the new law will come into effect.

The bill on Drugs and Food Supervision Law has been deliberated between the government and the House of Representatives since 2016 and there has been no indication on when the House will approve the bill. The House’s approval is required to enact the law. According to publicly available information on the House’s website, it appears that the bill was last deliberated on 10 March 2020 and there has been no significant progress since then. 

 

 

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Click the following links to read more legal articles from Indonesia:

1. Regulatory Pricing and Reimbursement Overview
2. Preclinical and Clinical Trial Requirements
3. Marketing, Manufacturing, Packaging & Labeling, Advertising
4. Traditional Medicines and OTC Products
5. Product Liability
6. Patents & Trademarks
7. Regulatory Reform
8. Cannabinoid Drugs, Medicinal Cannabis and Opioid Drugs

Also from this Legal Handbook

Key legal info on traditional medicines and OTC products in Indonesia. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

 

1. What are the regulatory requirements for traditional, herbal, complementary, or alternative drugs and devices?

Traditional drugs are mainly regulated under MOH Regulation No. 006 of 2016 on Traditional Drugs Industries and Business (“MOH Regulation 006”) and MOH Regulation No. 007 of 2012 on Traditional Drugs Registration (“MOH Reg. 007”). The MOH issued MOH Regulation No. 14 of 2021 on Business Activities and Products Standards for the Implementation of Risk-Based Business Licensing in the Health Sector as an implementing regulation of GR 5/2021. The BPOM has also issued regulations on certain aspects of traditional drugs, such as MA registration, Goods Manufacturing Practice certification, monitoring of side effects, and labelling.

Traditional drugs may be manufactured by: (i) non-individual legal entities in the form of a limited liability company (perseroan terbatas) or cooperation (koperasi) that engages in the field of traditional drugs industry (industri obat tradisional – “IOT”); and (ii) non-individual undertakings that engage in the field of natural material extract industry (industri ekstrak bahan alam – “IEBA”); which have obtained a license granted by the MOH through DGPHD. IEBA is an industry that specializes in producing extracts as final products, i.e., dry, viscous or liquid dosage extracts that are prepared by extracting vegetable or animal simplicia (a natural material that has been dried which is used for treatment and has not undergone processing, unless otherwise stated the drying temperature is not more than 60°C) in a suitable manner, outside the influence of direct sunlight. Non-individuals that are not legal entities may produce traditional drugs except for tablets, effervescent, suppository and soft capsule dosage forms as a small-scale business. Individuals and non-individuals (except limited liability companies) may engage in micro-scale business of traditional drugs manufacturing, but the products are limited to param, tapel, pilis, external medicine liquid and chopped.

Traditional drugs that are marketed in Indonesia must obtain an MA issued by the Head of BPOM, with an exception for some types of jamu (Indonesian traditional herbal drugs). The MA is valid for 5 years. Certain types of jamu (Indonesian traditional herbal drugs) are exempted from the mandatory MA requirement.

Traditional drugs are prohibited to be manufactured or marketed in the forms of: intravaginal, eye drops, parenteral and suppositories (except for hemorrhoids).

 

2. Can these traditional, herbal, complementary, or alternative products be advertised directly to the public?

No, they cannot. Traditional drugs may only be advertised only after the content of the advertisement has been reviewed and approved by BPOM.

The advertisement may use foreign language, insofar the corresponding translation in Indonesian language is provided.

 

3. What health, advertising, and marketing claims may be made for traditional, herbal, complementary, or alternative products?

There are some limitations of claims that can be advertised for traditional drugs, including:

1. Claims must conform with the efficacy as stated in the MA of the advertised product;
2. Claims which are not related to the quality, safety and efficacy of the products must be supported by valid data;
3. Efficacy for diseases which required diagnosis or treatment from physicians must not be advertised, such as cancer, diabetes, hypertension, hepatitis and other chronic diseases;
4. The advertisement must not make claims for the functions of each ingredient as the product contains various ingredients;
5. The advertisements must be adjusted if there is a change to the safety, efficacy and quality of the product;
6. The advertisements must not include claims of “safe”, “harmless”, “free/no side effects”, “optimal” and the like;
7. The advertisements must not include claims indicating instant/quick effects or give a promise that the traditional drugs will undoubtedly cure certain diseases.

Further, the claims must not use superlatives, such as “the only”, “number one”, “most”, “top”, etc. These claims may only be used for claims other than the efficacy/benefits of the traditional drugs and supported by evidence that specifically explains the advantages that can be accounted for by a written statement from the relevant authority or an authentic source. 

If an advertisement uses the word “new” or the like, it must be supplemented by the updated information of the product.

 

4. What are the regulatory requirements for over-the-counter (non-prescription) medications?

The regulatory requirements for OTC products generally refer to the requirements for medicines in general as elaborated in Marketing, Manufacturing, Packaging and Labeling, Advertising. 

Please see our response to Question 1 of Marketing, Manufacturing, Packaging and Labeling, Advertising on the authorization for marketing OTC products, and our response to question 9 of Marketing, Manufacturing, Packaging and Labeling, Advertising on the manufacturing requirements for OTC products.

 

5. Are there any limitations on locations or channels through which OTC products may be sold?

Please see our response to question 18 of Marketing, Manufacturing, Packaging and Labeling, Advertising. Sales of OTC products to end consumers are only allowed to be done by pharmaceutical services facility, which includes pharmacy, hospital pharmacy, health center (puskesmas), clinic, or drug store.

In addition, BPOM Regulation No. 8 of 2020 on Supervision of Drugs and Foods Marketed via Online allows pharmaceutical industry, pharmaceutical wholesaler, and pharmacy to market OTC drugs via online. The marketing must be done via an electronic system and the parties are required to submit periodical report on the marketing process to the BPOM.

 

6. What health, advertising, and marketing claims may be made for OTC products?

Please see our response to question 17 of Marketing, Manufacturing, Packaging and Labeling, Advertising. Generally, the claim to be made for medicines (including OTC) should be objective, complete, and not misleading. This means that the claim must be made in accordance with the real condition of the product and not deviate from the nature of benefit and safety of the product. In addition to the information on efficacy, the claim should also provide information on the matters that need attention, such as contraindications and side effects of the product. Furthermore, the claim must be true, accurate, responsible and not take advantage of community concerns about health issues or lead the community to excessive use of the product.

 

7. Can OTC products be marketed or advertised directly to the public?

OTC products are allowed to be marketed and advertised directly to the public, provided that they have obtained valid MAs and their advertisements’ content have been approved by the BPOM.

Under BPOM Regulation 2/2021, OTC products may be advertised on the following media:

a. Visual media
newspapers, magazines, brochures, bulletins, posters, stickers, calendars, pamphlets, air balloon, display stands, billboard, wobbler, neon box, static display on online media including social media; and/or other visual media in accordance with the laws and regulations.

b. Audio media
radio, audio recording on online media including social media, other audio recording; and/or other audio media in accordance with the laws and regulations.

c. Audio-visual media
television, cinema, megatron, videotron, video recording on online media including social media; and/or other audio-visual media in accordance with the laws and regulations.

The advertisement must use Indonesian language. Foreign language may be included, insofar the corresponding translation in Indonesian language is provided.

 

8. What is the mechanism by which a prescription-only product can be converted to an OTC product?

There is no explicit procedure on the conversion from a prescription-only product to become an OTC product. However, a holder of MA for prescription-only products may submit a major variation registration application to the BPOM in the event that based on review by the MOH, the drugs shall be re-classified as free drugs (OTC products).

In addition, under BPOM Regulation 24/2017, drugs with MAs may be re-assessed if based on monitoring on efficacy, safety, and quality of the drugs carried out by the holder of the MAs, the information on efficacy, safety, and quality of the relevant drugs submitted to the BPOM must be updated. 

Based on the monitoring data supplied by the holder of the MAs, the BPOM will decide on whether a re-assessment on certain drugs is required. If so, the holder of the MAs must submit updated and authentic data and information on such drugs to be re-assessed within 6 months as of the date of the notification by the BPOM. 

The BPOM will deliver a written decision to the holder of the MAs on the result of the re-assessment, which may be in the form of amendment to the classification of the drugs (including prescription-only product to OTC product).

 

9. What are the requirements for the importation of either traditional drugs or OTC products?

Under BPOM Regulation No. 30 of 2017 on Importation of Drugs and Food into the Territory of the Republic of Indonesia as amended by BPOM Regulation No. 15 of 2020 (“BPOM Reg 30”), drugs (including traditional medicines and OTC products) that are allowed to be imported into the territory of the Republic of Indonesia are those that have obtained MAs, complied with the prevailing laws on importation, and obtained Import Approval (which must be obtained for each importation). Compliance with the prevailing laws on importation includes obtaining Importer’s identification number (locally known as Angka Pengenal Importir – “API”, which is now integrated into NIB (as explained below)).

Following the launching of the OSS system, the Indonesian Government introduced new types of licenses, including the Single Identity Number (locally referred to as Nomor Induk Berusaha or “NIB”). 

The NIB is a new type of license that did not exist prior to the introduction of the OSS system. The NIB is a single identity number that covers the following general licenses:

1. Business Registration Certificate (TDP);
2. API; and
3. Customs access (for companies conducting importation and/or exportation – locally known as Hak Akses Kepabeanan).

Under BPOM Reg 30, importation of drugs and food may only be carried out by the holder of MAs or its proxy. A pharmaceutical industry holding an MA may appoint another pharmaceutical industry or importer pharmaceutical wholesaler/distributor to conduct the importation. However, the holder of the MA is still responsible for the quality of the drugs. 

The qualified applicant will be able to register for the Import Approval via the BPOM online system by submitting electronic documents such as MA, analysis certificate, invoice, and evidence of payment of non-tax state revenue (registration fee). Under BPOM Regulation No. 10 of 2021 on Business Activities and Products Standards for the Implementation of Risk-Based Business Licensing in Drugs and Foods Sector (“BPOM Reg 10”), importers who intend to import drugs for emergency use during public emergency period may also submit Emergency Use Authorization (EUA) in lieu of an MA. Specific for drugs in the form of vaccines, the applicant must also submit: (i) batch/lot release certificate from the competent authority in the country where the vaccine is released for each importation; and (ii) summary batch/lot protocol issued by the manufacturer of the vaccines. 

Further, there is an obligation for the MA holder of imported drugs to engage in local manufacturing of the drugs imported by them, within 5 years of the MA being issued.

 

 

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Click the following links to read more legal articles from Indonesia:

1. Regulatory Pricing and Reimbursement Overview
2. Preclinical and Clinical Trial Requirements
3. Marketing, Manufacturing, Packaging & Labeling, Advertising
4. Traditional Medicines and OTC Products
5. Product Liability
6. Patents & Trademarks
7. Regulatory Reform
8. Cannabinoid Drugs, Medicinal Cannabis and Opioid Drugs

Also from this Legal Handbook

The ins and outs of marketing, manufacturing, packaging & labeling, and advertising in Indonesia. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

 

1. What is the authorization process for the marketing of new drugs, biologics, medical devices, over the-counter medications, and other medicinal products?

Drugs

Any marketing of drugs (including biologics and over the counter medications) within Indonesian territory require a registration process with BPOM through the RBA OSS System to obtain an MA. The registration must only be made by Indonesian pharmaceutical manufacturing companies, including those that are subsidiaries of foreign pharma companies.

In general, the registration process for new products is classified into three categories as follows:

• Category 1: registration of new drugs and biological products, including biosimilar products;
• Category 2: registration of generic drugs and generic drugs with trade mark;
• Category 3: registration of other supplies containing drugs with special technology, which may be in the form of transdermal patch, implant and beads.

The process generally consists of two stages, namely preregistration phase and registration phase. The preregistration phase is required to filter the registration process of the drugs, covering stipulation of the registration category, evaluation track, evaluation fee, and registration documents.

Any registration of new product must include risk management planning. Detailed information on the procedures and requirements for registration of new product in BPOM is as stipulated under BPOM Regulation 24/2017.

Upon application for registration, several evaluations will be performed by certain committees established by BPOM on the following criteria

1. Reliable efficacy and adequate safety, as evidenced by the non-clinical and clinical testing as well as other evidence;
2. Quality, including compliance of production process with the Good Manufacturing Practices (“GMP”) for drugs;
3. Product information and labelling;
4. Other specific criteria for psychotropic and contraception medication.

The MA will be issued based on the recommendation provided by the committees and/or on-site investigation result. Upon obtaining the MA, applicant is obligated to produce or import and distribute the drugs at the latest one year as of the issuance of the approval.

 

Medical devices

Pursuant to MOH Regulation No. 62 of 2017 regarding MA of Medical Devices, In Vitro Diagnostic Medical Devices and Household Health Supplies (“MOH Regulation 62/2017”), any medical devices, in vitro diagnostic medical devices and household health supplies to be manufactured, imported, assembled and/or repackaged for distribution in Indonesia must obtain MA.

To be granted with MA, medical devices must meet the following criteria:

1. Quality, in accordance with the good manufacturing practices;
2. Safety and benefits, as evidenced by clinical test result and/or others;
3. The dose does not exceed the specified level limit in accordance with applicable standards, requirements and conditions; and
4. Do not use materials that are prohibited in accordance with applicable standards, requirements and conditions.

Based on the risk for usage, medical devices are classified into four categories:

• Class A: medical devices with low risk;
• Class B: medical devices with low risk to medium risk;
• Class C: medical devices with medium risk to high risk;
• Class D: medical devices with high risk.

The application of MA for domestically manufactured medical devices must be submitted by a licensed manufacturer. Applications for imported medical devices may be made by sole/exclusive agent/distributor or licensed distributor.

The application must be submitted online through the RBA OSS System.

 

2. What is the authorization process for the marketing of generic versions of these products?

The authorization process for marketing of generic drugs in Indonesia is generally the same as the registration of new product in BPOM (see our response to question 1 above).

 

Below are some specific requirements for the registration of generic drugs under BPOM Regulation 24/2017: 

• The registration of generic drugs must use generic name in accordance with the International Nonproprietary Names – Modified as set out by the World Health Organization or names as stipulated in the national health program.
• All manufacturing stages of generic drugs must be done locally, save for a manufacturing stage that cannot be performed locally.
• Labelling of generic drugs must contain information on the highest retail price in accordance with the prevailing regulations, and generic logo in green with the prescribed format as set out under the regulation.

 

3. What are the typical fees for marketing approval?

Please see Regulatory, Pricing and Reimbursement Overview Question 4.

 

4. What is the period of authorization and the renewal process?

Drugs

MA for drugs is valid for 5 years and may be extended as long as the product meets the provisions of the prevailing regulations. 

The application for extension (re-registration) of MA must be made to BPOM at the earliest 12 months and at the latest 2 months prior to the expiry of the validity period of the MA, save for re-registration of MA with no changes that may be applied for at the latest 1 month prior to the expiry date of the MA. 

The approval of re-registration of MA shall be valid as of the expiry date of the existing MA.

 

Medical Devices

MA for medical devices is valid for maximum 5 years and may be extended as long as the product meets the provisions of the prevailing regulations.

The application for extension of MA must be applied at the soonest 9 months prior to the expiry of the license. 

 

5. What are the requirements, if any, for post-approval pharmacovigilance?

The implementation of pharmacovigilance in Indonesia is set out under BPOM Regulation No. HK.03.1.23.12.11.10690 TAHUN 2011 on Implementation of Pharmacovigilance for Pharmaceutical Manufacturers.

Pursuant to the regulation, a pharmaceutical manufacturer is required to implement pharmacovigilance through supervision of the following:

• Safety aspect of the drugs for detection, assessment, understanding and prevention of side effect or other matters related to usage;
• Change to the profile of benefits-risks of the drugs; and/or
• Quality aspect that affects the drugs’ safety.

If during the implementation of pharmacovigilance, the manufacturer finds that the drugs and/or drugs raw materials it manufactured do not meet the standard and/or requirements on safety, efficacy/ benefits, and quality, the manufacturer is obligated to report the finding to BPOM.

 

6. Are foreign MAs recognized?

No, a foreign MA is generally not recognized as an independent permit in Indonesia. 

Any drugs, either domestically manufactured or imported drugs, as well as medical devices to be distributed within Indonesian territory must follow the registration procedures and obtain MA issued by BPOM, or MOH for medical devices. Nonetheless, a foreign MA (in the form of Certificate of Free Sale) is required as one of the supporting documents in the application of MA for imported medical devices.

 

7. Are parallel imports of drugs or devices allowed?

Yes, parallel import of drugs is allowed in Indonesia. 

Pursuant to the Indonesian Patent Law (i.e., Law No. 13 of 2016, as amended by Omnibus Law), parallel import of drugs is exempted from criminal provisions under the law and civil claims, provided that the drugs are imported in accordance with the prevailing laws and regulations. The provision is aimed to guarantee fair prices and fulfill the sense of fairness of all pharmaceutical products that are necessary for human health. The provision should be used if the price of product in Indonesia is extremely high compared to the prices that are legally circulated within the international market.

The law, however, is silent on the parallel import of medical devices. Conservatively, the implementation of parallel import of medical devices is not allowed in Indonesia.

 

8. What are the restrictions on marketing practices such as gifts, sponsorships, consultancy agreements, travel and entertainment, or other incentives for healthcare organizations and individual medical practitioners?

In general, the Indonesian Consumer Protection Law (i.e., Law No. 8 of 1999 concerning Consumer Protection) prohibits any offering, promotion or advertising of drugs, traditional drugs, food supplements, medical/health devices, and health services by promising the granting of gift of goods and/or services. 

Based on the Decree of Head of BPOM No. HK.00.05.3.02706 of 2002 on Promotion of Drugs (“Decree No. 02706”), granting cash to doctors constitutes one of the prohibited forms of promotion. Decree No. 02706 restricts pharmaceutical industries to grant a bonus/gift in the form of money (cash, bank-draft, loan, voucher, ticket) and/or goods (free samples) to the prescribers (doctors) of the drugs produced by the pharmaceutical industry. Violation of this restriction is subject to the following administrative sanctions:

1. Written warning;
2. Temporary suspension of activity;
3. Temporary suspension of/or revocation of the MA of the respective drugs; and/or
4. Administrative sanctions in accordance with the prevailing laws and regulations.

Further, if the doctors receiving monies from the company are civil servants or state administrators, the payment will also be subject to the anti-bribery laws (Law No. 31 of 1999, as amended by Law No. 20 of 2001 on the Eradication of Corruption). 

Based on the Law, any gratuity to civil servants or state administrators is considered bribery if it is related to their job responsibilities and contrary to their duties or obligations. Gratuities are defined broadly, and can include money, goods, airline tickets, accommodation, discounts, loans, commissions, and other facilities. Civil servants or state administrators who receive a bribe are subject to criminal sanction of imprisonment for 4 to 20 years or even life, and a fine from IDR 200 million to IDR 1 billion. However, the provision is not applicable if the civil servant or state administrator reports the gratuity to the Corruption Eradication Commission (“KPK”) within 30 days of receiving it. KPK will then determine whether the gratuity may be kept by the receiving civil servant or state administrator or be confiscated by the state.

If it is proven that the gratuity was made by the pharmaceutical company with the intention that the civil servant or state administrator: 

1. would or would not carry out an act, or 
2. has already carried out or not carried out an act, related to their job responsibilities and contrary to their obligations, the company (including the recipient of such gratuity) may be imposed with criminal sanction of imprisonment of 1 to 5 years, and a fine of IDR 50 to 250 million.

With regard to the sponsorship to healthcare professionals, the MOH issued Regulation of the Minister of Health No. 58 of 2016 on Sponsorship of Healthcare Practitioners which requires all healthcare professionals to report any receipt of sponsorship from pharmaceutical or medical devices industries. 

 

9. How is the manufacturing of drugs and devices regulated and by which agencies?

Drugs

The manufacturing of drugs is regulated by MOH under its Regulation No. 1799/MENKES/PER/XII/2010 on Pharmaceutical Industry, as amended by MOH Regulation No. 16 of 2013 (“MOH Regulation 1799/2010”).

Pursuant to the regulation, the manufacturing of drugs may only be performed by: (i) a pharmaceutical manufacturer with a valid manufacturing license from the MOH; and (ii) a hospital pharmaceutical installation to support health services in the relevant hospital.

MOH Regulation 1799/2010 provides specific requirements that must be fulfilled by a pharmaceutical manufacturer in manufacturing drugs, including to comply with the GMP for drugs and obtain a certificate of GMP from BPOM, as well as to perform pharmacovigilance and report to BPOM if the drugs do not meet the security standards and/or requirements, efficacy/benefits and quality.

 

Medical Devices

For medical devices, the manufacturing of the products is also regulated by MOH under its Regulation No. 1189/MENKES/PER/VIII/2010 regarding Manufacturing of Medical Devices and Household Health Supplies (“MOH Regulation 1189/2010”).

Based on the regulation, the manufacturing of medical devices may only be performed by a company having a certificate of production issued by MOH. The requirement to obtain certificate of production also applies to a company that will engage in the repackaging, assembling, recondition/remanufacturing and company that manufacture medical devices by order and for the trademark or formula owner (tolling). 

A manufacturer of medical devices shall be responsible for the quality, safety and benefits of the medical devices that it manufactured. They shall also guarantee that the product is manufactured in accordance with the GMP for medical devices and that there is no decrease in quality and performance of the product during the storage, usage and transportation process.

 

10. Are local manufacturing requirements compatible with Good Manufacturing Practices (GMPs) as defined by the U.S. Food & Drug Administration and/or the European Drugs Agency?

Indonesia has developed its own standard of GMP for drugs as regulated under BPOM Regulation No. 34 of 2018 concerning Guidelines on GMP for Drugs (“BPOM Regulation 34/2018”), which covers several aspects from quality system of pharmaceutical manufacturer, personnel, buildings and facilities, equipment, production, quality control, documentation, self-inspection, computerized system up to quality risk management. 

The requirements under Indonesian GMP has followed the international standard and may or may not be compatible with the U.S. Food & Drug Administration and/or the European Drugs Agency.

 

11. What is the inspection regime for manufacturing facilities?

BPOM Regulation 34/2018 introduced a self-inspection program in manufacturing of drugs for the purpose of evaluating whether all manufacturing aspects and quality control of the pharmaceutical manufacturer are in compliance with the GMP provisions. The self-inspection program must be performed independently and in detail by competent officers from the company that can objectively evaluate the implementation of GMP, regularly and in specific situations.

Inspection of a pharmaceutical manufacturer shall also be done by BPOM. In performing its duty, relevant officers of BPOM may conduct the following actions: 

• Enter into places used for manufacturing, storage, hauling and trading activity of drugs to examine and take samples of everything used in such activities;
• Open and examine drugs packaging;
• Examine documents and other records that allegedly contain information regarding manufacturing, storage, hauling and trading activity of drugs, including doubling or quoting such information; and/or
• Take pictures (photos) of all or part of the facilities and equipment used in manufacturing, storage, hauling and trading activity of drugs.

 

12. Are manufacturing facilities open for inspection by foreign inspectors or third-party inspectors as authorized by the FDA/EMA?

As far as we are concerned, there is no restriction for inspection of manufacturing facilities of drugs by foreign inspectors or third-party inspectors authorized by the FDA/EMA under the prevailing regulations. 

However, any inspections by foreign inspectors in Indonesia must also comply with the requirement imposed by the Ministry of Manpower and Directorate General of Immigration in relation with the working permit of the expatriate inspectors.

 

13. What are the requirements for storage, packaging, and handling of drugs and devices and their constituent components?

The specific requirements for storage, packaging, and handling of drugs and their constituent components are set out under BPOM Regulation 34/2018 (for manufacturers) and BPOM Regulation No. 9 of 2019 on Technical Guidance on Good Distribution Practice for Drugs, as amended by BPOM Regulation No. 6 of 2020 (for distributors).

In general, drugs and their constituent components must be stored neatly and orderly by a manufacturer in a storage area to prevent contamination and to facilitate inspection and maintenance. Outside storage is allowed for materials that are packed in impermeable containers (for instance, metal drums) provided that the quality will not be affected by temperature or other conditions.

For distributor, the storage condition must be in accordance with the recommendation from pharmaceutical manufacturer or non-pharmaceutical manufacturer that manufactures the drugs materials to pharmaceutical quality standard. The volume of the drugs and drugs materials ordered must take into account the capacity of the storage facility.

Packaging of drugs should be carried out under strict supervision to maintain the identity, wholeness and quality of the final product being packaged. The filling and closing process in packaging stage should be immediately followed by labelling. Otherwise, proper procedures should be applied to ensure that there is no mix-ups or mislabelling. All packaging personnel should receive training to understand the supervision requirements during the process and report any deviations found when they carry out these specific responsibilities.

As for medical devices, the requirements for storage and handling of medical devices are set out under MOH Regulation No. 20 of 2017 on GMP for Medical Devices and Household Health Supplies (for manufacturer) and MOH Regulation No. 4 of 2014 on Good Distribution Practices for Medical Devices and Household Health Supplies. There must be an adequate storage facility to guarantee that the products are stored properly. This includes a storage room for raw material/ packaging/ component, intermediate product, and finished product in the manufacturing facility, and storage room designed for products worthy of selling, quarantined (rejected) products, recalled/returned products, and expired products in the distribution facility.

 

14. What information must be included in drug and device labelling?

Based on Government Regulation No. 72 of 1998 on Safety of Pharmaceutical Supplies and Medical Devices (“GR 72/1998”), the labeling in drugs and medical devices must generally include the following information:

1. Name of product and/or trademark;
2. Name of business entity manufacturing or importing the drug or device into Indonesian territory;
3. Main components of the drug and device;
4. Procedure for usage;
5. Warning signs and side effects;
6. Expiry date for particular drugs.

This mandatory information in the labeling must be made in writing, containing objective, complete and not misleading information on the product. Other information in the labeling can also be made in the form of images, color, writing or a combination of all three or other forms to be included in the packaging or put into the packaging, or is a part of the packaging. 

The information must be available in Indonesian language.

Drugs

BPOM provides a comprehensive list of minimum information that must be contained in each type of labeling of drugs as detailed in the Attachment XI to BPOM Regulation 24/2017. Based on the list, the information required in the labeling of drugs include, among others:

• Type of drug;
• Form of drug;
• Size of packaging (unit);
• Name and strength of active substance;
• MA number;
• Batch number;
• Production date;
• Indication;
• •osology/dosage;
• Contraindications;
• Drug interactions;
• Special warnings, such as “requires prescription”, contains pork, alcohol content, etc.;
• Special label, such as logo for type of drug (OTC drug, prescription drug), logo for generic drug, highest retail price, etc.

 

Medical Devices

Pursuant to MOH Regulation 62/2017, the labelling of medical devices must at least contain the following information:

• Trade name / mark;
• MA number;
• Type of product;
• Name and address of the manufacturer;
• Name and address of the distributor having the MA;
• Batch number/ production code/ serial number;
• The word “sterile” and sterilization method for sterile product;
• Product specification;
• Purpose and guidance of usage;
• Expiry date for product with expiration date; and
• Warning label of “may only be used by professional staff” or symbol of “p” in white with black background for certain medical devices that must be used by expert.

The labeling of medical devices must also contain information on net, composition and active substances level, contraindication, attention and warning signs or side effect, if any.

 

15. What additional information may be included in labelling and packaging?

Please see our response to question 14 above. Pursuant to GR 72/1998, information that may be included in labeling and packaging of drugs and medical devices is limited to information contained in the MA of the relevant product.

 

16. What items may not be included in labelling and packaging?

In general, items that may not be included in labelling and packaging are those not stipulated in the MA of the relevant product.

Specifically for medical devices, MOH Regulation 62/2017 provides that the labeling should not contain the following wordings

• Superlatives, such as “most”, “very”, “super”, “top, “magic”, etc.;
• Wordings such as “germ-free”, “mosquito-free”, “safe”, “extermination”, “anti-aging”, “cure”, “aromatherapy”, “recommended by doctors”, etc.;
• Percentage or other statement to indicate product effectivity;
• “anti-bacterial” claim which is not the main function placed at the front of the labeling;
• “insect repellent” claims;
• Include the function of additives as the main claim;
• Include the name of the testing laboratory; and/or
• Include a claim that is not in line with the function of the active substance as the main claim.

 

17. What are the restrictions and requirements for the marketing and advertising of drugs and devices?

Drugs

BPOM Decree No. 02706 provides general requirements and restrictions for marketing and advertising of drugs, aiming to protect public from the risk of improper use of drugs due to excessive, inappropriate and/or misleading promotion of drugs. 

The promotion of drugs to public through print media, electronic media and/or outdoor media is only allowed for OTC drugs. Whilst, any promotion of prescription/ethical drugs cannot be made to general public.

Narratives and efficacy claims used for the promotion of drugs should be in line with the claims approved by BPOM under the relevant MA.

Below are several restrictions under BPOM Decree 02706 for the promotion of drugs by pharmaceutical manufacturer and/or distributor:

a) entering into cooperation with pharmacies and prescription makers;

b) entering into a cooperation on prescription of drugs with pharmacies and/or prescription makers in a special program to increase sales for particular drugs;

c) To give bonuses/prizes in the form of money (cash, bank-draft, loans, vouchers, tickets) and/or goods to the prescription makers which prescribes drugs produced or manufactured by the manufacturer/distributor;

d) To form a special group to increase use of drugs that relates to marketing objectives;

e) To conduct promotion with prizes for the sale of OTC drugs, by returning the former packaging and/or holding a quiz or something similar.

Specific guideline on advertising of drug is stipulated under MOH Decree No. 386/Men.Kes/SK/IV/1994 concerning Advertising Guideline: OTC Drugs, Traditional Drugs, Medical Devices, Cosmetic, Household Health Supplies and Foods-Beverages (“MOH Decree 386”) and BPOM Regulation No. 2 of 2021 on Guideline on Drug Advertising Supervisory (“BPOM Regulation 2/2021”). Provisions under both regulations include the requirement to obtain MA and prior approval from BPOM for advertising of drugs.

Medical Devices

Specific requirements and restrictions on advertising of medical devices are stipulated under MOH Regulation No. 76 of 2013 regarding Advertising of Medical Devices and Household Health Supplies.

Pursuant to the regulation, medical devices may be advertised through print or electronic media, information technology and/or outdoor media. Specifically, for medical devices whose utilization requires assistance from professional staff, the advertising may only be done through scientific printed media for drugs and pharmaceuticals and/or a scientific forum for the health profession or similar.

The advertising of medical devices requires prior approval from the MOH and MA for the product.

Below are some restrictions on advertising materials for medical devices:

• Misleading through emphasis, striking comparison or omitting facts;
• Comparing to other similar product with demeaning intent;
• Directly or indirectly encourage the excessive and unnecessary use of medical devices;
• Taking advantage of public’s ignorance by listing scientific data that cannot be validated or verified;
• Causing fear or taking advantage of public myths;
• Provide testimonials;
• Use names, initials, logos, symbols and/or references which indicate suggestions for use from health institution or organizations;
• Use confusing medical jargon/slogans;
• Abuse research result or quotes from technical or scientific publications; and/or
• Directly or indirectly suggest that the medical devices may prevent disease.

In addition, the advertising material is also not allowed to:

• •Contain wording, sentences or illustrations that claim or give the impression that the device may cure certain disorder or disease;
• Directly or indirectly suggest that the device may prevent, slow down or restore physiology changes and degenerative conditions that are related to aging;
• Contain claims or create the impression that the device is perfect, guaranteed to provide certainty on healing; and/or
• Ignores main treatment/care, offer specific suggestions, diagnosis or treatment for serious and chronic diseases.

Advertising for medical devices shall not contain or display health personnel or actor acting as health personnel or using attribute of health personnel, except for advertisements in health magazines, health services advertising, and scientific forum within a professional environment.

 

18. Where can drugs and devices be sold or delivered? Can drugs and devices be sold or delivered via post?

Save for prescription drugs, the sales of drugs in wholesale may only be carried out by a pharmaceutical distributor with specific license from the MOH. The retail sale/supply of drugs to end consumers is only allowed for pharmaceutical services facility, which includes pharmacy, hospital pharmacy, health center (puskesmas), clinic, or drug store. Specifically for drug stores, the sales activity is limited to OTC drugs.

As for medical devices, the wholesale distribution must be carried out by a medical devices distributor with a specific license from the MOH. While the retail sales should be done by medical devices store (for devices that cannot cause harm and do not require supervision from health personnel in its utilization), or a health services facility or authorized health personnel (for devices whose utilization requires supervision from health personnel). Certain medical devices in limited quantity may also be sold to end consumer by pharmacies and licensed drugs retailers.

Given the specific requirements for the delivery of drugs as provided under the relevant regulations, it is very unlikely to sell or deliver products via post.

 

19. What are the restrictions and requirements for electronic marketing and advertising via email, by Internet, social media, and other channels?

BPOM Regulation 2/2021 allows promotion of OTC drugs through static display, audio recording, or video recording in an online media (including social media). For promotion through social media, this can also provide a feature for 2-way communication between the ad provider and public, provided that it includes objective, complete and non-misleading information in accordance with the approved ad proposal. BPOM Regulation 2/2021 also acknowledge the use of other visual, audio or audio-visual media in accordance with the prevailing regulations to promote OTC drugs. Ethical drugs can only be promoted through medical scientific print media and/or pharma scientific print media. 

Pursuant to BPOM Regulation 2/2021, promotion of drugs (including through online media) requires approval from the Head of BPOM.

As for devices, MOH Regulation 76/2013 allows marketing and advertising medical devices through information technology media. There is no elaboration in the regulation on the type of technology that may be used for such purpose. Yet, arguably, this may include the use of email, internet, social media and other information technology channels.

 

20. May drugs and devices be advertised or sold directly to consumers?

Please refer to our response to question 17 for the advertising of drugs and devices, also our response to question 18 for the sales of drugs and devices.

 

21. How is compliance monitored?

In general, the monitoring of compliance of drugs and medical devices is done by the MOH. In performing its monitoring duty, MOH appoints a supervisor to conduct inspection of the drugs and medical devices. If the inspection by the supervisor indicates any suspected violation, this will lead to an investigation by the authorized investigator in accordance with the prevailing regulations. 

Specifically for drugs, certain monitoring duties are assigned to BPOM.

 

22. What are the potential penalties for noncompliance?

Any noncompliance with the requirements and provisions on drugs and medical devices under the prevailing regulations may subject the relevant party to: (i) administrative sanctions, in the form of written warnings, temporary suspension on distribution and/or order for product withdrawal, product extermination, and/or temporary/permanent revocation of licenses; and (ii) criminal penalties in accordance with the prevailing laws.

 

 

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Click the following links to read more legal articles from Indonesia:

1. Regulatory Pricing and Reimbursement Overview
2. Preclinical and Clinical Trial Requirements
3. Marketing, Manufacturing, Packaging & Labeling, Advertising
4. Traditional Medicines and OTC Products
5. Product Liability
6. Patents & Trademarks
7. Regulatory Reform
8. Cannabinoid Drugs, Medicinal Cannabis and Opioid Drugs

Also from this Legal Handbook

Preclinical and clinical trial requirements in Indonesia – an overview. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

 

1. Are clinical trials required to be conducted locally as a condition (stated or implicit) for marketing approval?

No, clinical trials do not have to be conducted locally for applying for MAs. The applicants must provide clinical trials results to prove the efficacy and safety of the drugs, although it is not necessarily performed in Indonesia.

 

2. How are clinical trials funded?

Clinical trials are funded by sponsors. Sponsors can be any individuals, companies, institutions or organizations.

A sponsor, including foreign sponsor, may engage research organizations to conduct the clinical trial. 

 

3. What are the requirements for preclinical and clinical trial protocols? Who must approve the protocols?

A clinical trial protocol must elaborate:

• the organization of a clinical trial, 
• the background, 
• objective, 
• design, 
• method, and 
• statistical consideration, in relation to the trial.

The protocols are a supporting document that must be submitted together with the application to obtain clinical trial approval. Clinical trial approval for drugs is issued by Head of BPOM drug, whilst trial for medical devices must be approved by MOH through the Directorate General of Pharmaceutical and Health Devices (Direktorat Jenderal Kefarmasian dan Alat Kesehatan – “DGPHD”)

 

4. What are the requirements for consent by participants in clinical trials?

The subjects or participants of clinical trials must provide a written consent called Informed Consent (Persetujuan Setelah Penjelasan). 

The Informed Consent must be obtained from the participant voluntarily after the participant has been fully informed on the whole aspects of the clinical trial which he/she will be participating into, including side effects and benefits of the trial. The Informed Consent must also contain the procedure in the event of any undesirable event or serious undesirable event.

 

5. May participants in clinical trials be compensated?

The participants in clinical trials may be compensated, both in form of financial compensation or form of healthcare treatment. However, the compensation amount must not be too large or too insignificant as it may affect the participants.

 

6. How are participants in clinical trials protected and indemnified against any harm that arises as a result of participation in the trial?

There is no explicit regulation that provides indemnification to participants against any harm that arises as a result of participation in the trial. 

However, the Informed Consent that is approved by the participants must provide a clear understanding on all clinical trial’s aspects before its commencement. This Informed Consent also contains information on the compensation and other benefits which will be obtained by the subject of clinical trial. Therefore, the subject will fully understand his/her rights arisen from participating in the clinical trial and may claim such rights to the clinical trial’s initiator.

 

 

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Click the following links to read more legal articles from Indonesia:

1. Regulatory Pricing and Reimbursement Overview
2. Preclinical and Clinical Trial Requirements
3. Marketing, Manufacturing, Packaging & Labeling, Advertising
4. Traditional Medicines and OTC Products
5. Product Liability
6. Patents & Trademarks
7. Regulatory Reform
8. Cannabinoid Drugs, Medicinal Cannabis and Opioid Drugs

Also from this Legal Handbook

The key facts about regulatory, pricing, and reimbursement of drugs in Indonesia. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

 

1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?

The regulatory authorities with specific jurisdiction over drugs, biologicals, and medical devices in Indonesia are:

1. Ministry of Health of the Republic of Indonesia (Kementerian Kesehatan Republik Indonesia, “MOH”); and
2. Indonesia National Agency of Drug and Food Control (Badan Pengawas Obat dan Makanan “BPOM”).

 

2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?

The basic regulation on health (including drugs, biologicals, and medical devices) is Law No. 36 of 2009 on Health (“Health Law”), as amended by Law No. 11 of 2020 on Job Creation (“Omnibus Law”).

Drugs and Biologicals

Authorization 

The authorization of drugs and biologicals is primarily regulated under BPOM Regulation No. 1010/MENKES/PER/XI/2008, as amended by BPOM Regulation No. 1020/MENKES/PER/XII/2008 on Drug Registration. Further, details on the requirements, criteria, category, as well as registration procedures of drugs and biologicals are further regulated under BPOM Regulation No. 24 of 2017 on Criteria and Management of Drug Registration, as last amended by BPOM Regulation No. 13 of 2021 (“BPOM Regulation 24/2017”). 

Worthy of note is that at the end of June 2018, the Indonesian government launched the Online Single Submission (“OSS”) system, which serves as the main gateway for business licensing for the licenses previously handled by different line ministries, regional governments, and quasi-government bodies, including the Ministry of Investment/ Indonesian Direct Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”). The Indonesian government is continuously upgrading the OSS system, lastly into a Risk-Based Approach (“RBA”) OSS system as the implementation of Government Regulation No. 5 of 2021 on Risk-Based Business Licensing (“GR 5/2021”). The RBA OSS system is effective since August 2021.

GR 5/2021 has introduced a new paradigm in permits and licenses; company licenses are now determined by a risk-based analysis. The risk assessment is classified into 4 levels: Low, Medium-Low, Medium-High and High, each with its own characteristics, and assessed using various criteria, including safety, health, the environment, resource utilization and management. GR 5/2021 generally sets out the risk-level, validity, requirements, obligations, and timeline related to the licensing. Higher risk imposed higher license requirements.

All licenses and permits must be applied for through the OSS system, including licenses related to drugs and biologicals. Although, in some cases, verification and assessment by the relevant ministries are still required.

 

Pricing

Pharmaceutical industries in Indonesia are required to provide information on the highest retail price on the relevant drug’s label under MOH Regulation No. 98 of 2015 on the Provision of Information on Highest Drug Retail Price (“MOH Regulation 98/2015”). The MOH Regulation 98/2015 also grants authorization to the MOH to determine from time to time the retail price of generic drugs that are not included in the e-catalogue (an electronic system on procurement of goods/services by government).

 

Medical devices

Authorization

The authorization of medical devices is primarily regulated under MOH Regulation No. 62 of 2017 on MA of Medical Devices, In Vitro Diagnostic Medical Devices, and Household Health Products (“MOH Regulation 62/2017”). 

Upon the launch of the RBA OSS system, the risk-level, validity, requirements, obligations, and timeline related to the licensing of medical devices are as regulated under GR 5/2021.

 

Pricing

There is no specific regulation on the pricing of medical devices. 

There is no regulation on reimbursement of drugs, biologicals, and medical devices in Indonesia. The Government, however, manages a public healthcare system via an independent authority. Please refer to Question No. 10 below.

 

3. What are the steps to obtain authorization to develop, test, and market a product?

Drugs

Marketing Authorization (“MA”) of drugs, including imported drugs, must be obtained by Indonesian pharmaceutical manufacturing companies. 

The Development and testing of drugs differs between generic and new drugs. For generic drugs, applicants may conduct development of formula/testing in the laboratory without any authorization. Once the applicant is sure of the result of the development/testing, the applicant must register the drugs and obtain an MA.

Development and testing of new drugs, on the other hand, must adhere to the regulations on pre-marketing clinical trials. If the new drugs are to be imported from overseas (meaning that they are already marketed and distributed overseas but not in Indonesia), the development and testing may be conducted overseas. The BPOM will accept result of clinical and non-clinical trials conducted overseas as part of the MA application as below.

Prior to distribution of drugs, an MA issued by the RBA OSS System on behalf of BPOM must first be obtained. The application of an MA is divided into 2 steps, namely: (i) pre-registration and (ii) registration phase. The application is conducted online through the RBA OSS System. 

In general, the following are the steps for obtaining an MA:

1. The applicant must be registered at the RBA OSS System.
2. Pre-registration phase
   The timeline for pre-registration phase is 40 days. 
3. Registration phase

The timeline for registration phase is ranging from 5 days up to 300 days, subject to the condition of the registration and the type of drugs being regis-
tered. 

In both Pre-registration and Registration phases, the applicant must adhere to:

1. Standard and requirement for criteria and procedure of drugs registration;
2. Indonesian Pharmacopoeia Standard and/or analysis method, standard and/or other requirements; and
3. Bioequivalence testing guidelines. 

 

Medical devices

Similar to drugs, development and testing of medical devices prior to distribution shall adhere to the regulations on pre-marketing clinical trials. 

In general, medical devices in Indonesia are divided into 4 classifications based on the risk of use against patients:

1. Class A: low risk;
2. Class B: low to medium risk;
3. Class C: medium to high risk;
4. Class D: high risk.

Prior to distribution of medical devices, an MA issued by the RBA OSS System on behalf of MOH must be obtained. In general, the following are the steps for obtaining an MA:

1. Prior to applying for an MA, the applicant must first obtain a Medical Devices Manufacturing Certificate (for a local manufacturer) or Medical Devices Distribution Certificate (for importer) via the RBA OSS System.
2. Registration for MA must also be done through the RBA OSS System. Pursuant to GR 5/2021, the applicant will be required to comply with the following requirements:

1. Administrative requirements; 
2. Technical requirements; and
3. Payment of Non-Tax State Revenue. 

The timeline for new registration of MA is ranging from 10 days up to 45 days, subject to the type of medical devices being registered.

 

4. What are the approximate fees for each authorization?

Drugs and Biologicals

The applicable fees vary for each authorization, as stipulated under Government Regulation No. 32 of 2017 on Types and Tariffs of Non-Tax State Revenue Applicable at BPOM. 

As an illustration, a pre-registration costs up to IDR 1 million per item, and a registration of drug with new active substance, biologicals, and combination costs up to IDR 30 million per item.

 

Medical devices

The applicable fees vary depending on the classification of the medical devices and the type of application (new or renewal), as stipulated under Decree of the Director General of Pharmaceutical and Medical Devices No. HK.02.03/I/767/2014 on Guidelines of Medical Devices MA Services. As an illustration, an application for new MA for Class D medical devices costs IDR 5 million per item.

 

5. For how long are MAs/registrations valid? How are MAs/registrations renewed?

Drugs and Biologicals

MA for drugs and biologicals are valid for 5 years, to the extent that they comply with the prevailing laws.

 

Re-Registration

The timeline to submit re-registration application for renewal of MA depends on whether or not there is an alteration to the product. In the event of any alteration to the MAs (e.g., change of ingredients, manufacturer, etc.), the holders of MAs must submit re-registration applications to the BPOM at the earliest 12 months and latest 2 months prior to the expiration thereof. If there is no alteration, the application may be submitted within 1 month prior to the expiration of the MAs. 

Should a holder of a MA fail to re-register within the required time period, a new registration application (not re-registration) must be submitted. 

 

Medical devices

MA for medical devices are valid for maximum 5 years. Application for renewal of the MA shall be submitted at the earliest 9 months prior to the expiration thereof. Should a holder of a MA fail to apply for renewal after the expiration, a new registration application (not a renewal) must be submitted.

 

6. How does the authorization process differ between brand-name products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?

Drugs and Biologicals

Drugs regulations do not differentiate the authorization process between brand-name products and generic products. The regulation however differentiates between registration of: (i) domestically produced drugs; (ii) imported drugs; (iii) licensed drugs; (iv) patent-protected drugs; (v) new development drugs; (vi) generic drugs; and (vii) orphan drugs.

The authorization process also differs between local manufacturers (whether 100% local or foreign-owned) and foreign manufacturers (import). As the application is made online, the system differentiates between an application for locally made medical devices and imported medical devices by providing different menus/options. Subsequently, different details will be required for each option. 

 

Medical devices

Medical device regulations also do not differentiate the authorization process between brand-name products and generic products. If the medical devices are branded, the brand certificates shall be provided during the registration.

Similar to drugs, the authorization process also differs between locally-made medical devices and imported medical devices.

 

7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?

There is no specific regulation on combination products, as such, the applicant must adhere to each regulation relating to the products combined. For example, for drug and medical devices, the applicant must take into account the prevailing regulations on drugs and medical devices. 

However, during the application for MA for drugs, the applicant should be able to select the type of the products to be registered, as follows:

1. Single Product, if the product only consists of drug;
2. Combination Product, if the product consists of drug and solvents or drug use aids (e.g., syringe, aerosol, spray, implant); or
3. Combipack Product, if the product consists of two or three drugs packed into one package to be given to patients simultaneously.

 

8. How is compliance with regulation monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Drugs Agency expectations and requirements?

In general, the requirements of U.S. Food and Drug Administration or the European Drugs Agency are informally used as benchmark by the Indonesian authorities, thus certain aspects are comparable. Nevertheless, Indonesia has a set of unique regulations that govern drugs and medical devices sectors. 

 

Drugs

Under Presidential Regulation No. 80 of 2017 on BPOM, BPOM is generally authorized to conduct intelligence and investigation activities in the drugs and foods sector as well as impose administrative sanctions, in accordance with the prevailing laws and regulations. The regulation also stipulates the establishment of a specific Investigation Deputy under BPOM, which is tasked to carry out the formulation and implementation of investigation policies against violations in the drugs and foods sector.

 

Medical devices

Under MOH Regulation No. 10 of 2018 on Monitoring in the Health Sector, a functional position of a Health Supervisor is established to implement monitoring and supervision in the health sector. The object of monitoring includes the public and each organizer of activities related to health resources (including medical devices) and health efforts (e.g., health services). Health Supervisors work at central level (appointed by the MOH), provincial level (appointed by the Head of Provincial Health Agency) and regency/municipal level (appointed by the Head of Regency/Municipal Health Agency). 

A Health Supervisor is authorized to, among others, examine licensing related to the health resources and health efforts. If based on the monitoring and supervision activities, it is proven that a health personnel and/or a health services facility violates any regulation in the health sector, they may be imposed with administrative sanctions. 

 

9. What is the potential range of penalties for noncompliance?

Drugs and Biologicals

Under GR 5/2021, noncompliance or violation of business licensing in the drugs and foods sub-sector, including licensing related to drugs and biologicals, is subject to administrative sanctions, ranging from written warning, temporary suspension of business activity through freezing of business licensing, administrative fine, coercion (i.e., withdrawal from distribution, compensation, extermination, closing or blocking of electronic system and/or other internet media used for online distribution of drugs and foods, and/or closing of access for business licensing application), and/or revocation of business licensing (e.g., MA). 

 

Medical devices

Under GR 5/2021, noncompliance or violation of business licensing in the medical sub-sector, including licensing related to medical devices, is subject to administrative sanctions, ranging from written warning to revocation of business licensing (e.g., MA). Additionally, there is also administrative sanction in the form of government coercion, covering: (i) discontinuation of ad service (ii) product recall order, and/or (iii) product extermination order.

Despite the foregoing, the Health Law provides criminal sanctions for: (i) any person who intentionally produces or distributes pharmaceutical supplies and/or medical devices that contravene the standard and/or requirements for safety, efficacy or expedience, and quality in the form of imprisonment for a maximum of 10 years and penalty for a maximum of IDR 1 billion, (ii) anyone who intentionally produces or distributes pharmaceutical supplies and/or medical devices without proper business licensing in the form imprisonment for a maximum of 15 years and penalty for a maximum of IDR 1.5 billion.

 

10. Is there a national healthcare system? If so, how is it administered and funded?

In 2011, Law No. 24 of 2011 regarding Social Security Management Board (“Law No. 24/2011”) was enacted. The regulation is the basis of establishment of the Social Security Management Board (Badan Penyelenggara Jaminan Sosial or “BPJS”), which consists of 2 different bodies: (i) Health BPJS – which manages health security program; and (ii) Manpower BPJS – which manages manpower related programs such as pension fund. Both BPJSs are responsible to the President of the Republic of Indonesia.

The health social security program was formerly known as the Public Health Care Insurance (Jaminan Pemeliharaan Kesehatan Masyarakat) which was managed by PT Askes (Persero). Following the enactment of Law No. 24/2011, it transformed into the Health Security program and is managed by Health BPJS. 

Any person, regardless of whether they already have another health insurance policy, is obligated to become a participant in the health security program managed by the Health BPJS. The Health BPJS will charge periodical contribution fees to the members. The Indonesian Government will provide contribution aid to the Health BPJS as an additional source of funding for the purpose of sponsoring the poor and less fortunate so that they can be covered by the health security program.

The Health BPJS will cover health services expenses of its participants in accordance with the health security program regulations.

 

11. How does the government (or public) healthcare system function with private sector healthcare?

Under MOH Regulation No. 71 of 2013 on Healthcare Services at National Health Security, as amended several times, lastly by MOH Regulation No. 7 of 2021, Health BPJS may cooperate with healthcare facilities managed by the government, regional government, and/or public. These include: (i) health centre (locally known as Puskesmas) or its equivalent; (ii) doctor’s practice; (iii) dentist’s practice; (iv) primary services doctor’s practice; (v) pratama clinic or its equivalent; (vi) pratama class D hospital or its equivalent; (vii) primary clinic or its equivalent; (viii) general hospital; and (ix) special hospital. The cooperation shall be carried out by a cooperation agreement between the Health BPJS and each health facility. The agreement must be valid for a minimum of 1 year.

On 28 March 2018, the MOH Regulation No. 4 of 2018 on Obligations of Hospitals and Obligations of Patients was enacted. The regulation stipulates that each hospital (whether public or private) must fulfil certain obligations, including, to provide facilities and services for the less fortunate and poor. It is further explained that this obligation shall be carried out by providing Class III care beds for the less fortunate and the poor, and/or for the health social security participants.

 

12. Are prices of drugs and devices regulated and, if so, how?

Drugs

MOH Regulation 98/2015 requires pharmaceutical industries to provide information on the highest retail price on the label of the drug concerned. The information may be provided in the form of a nominal value (in IDR) or formula (as relevant). The price information differs in accordance with the type of the drugs: 

• non-generic drugs, 
• generic drugs listed in the e-catalogue for government procurement; and 
• generic drugs that are not listed in the e-catalogue. 

Price information based on the formula must be provided for generic drugs listed in e-catalogue. Specifically, for generic drugs not listed in the e-catalogue, the highest drug retail price must comply with the price determined by the MOH based on its decree. The MOH last issued an MOH Decree on this in 2015. 

For non-generic drugs, the information must be provided in the form of a nominal value based on pharmacies’ nett price (i.e., retail price from pharmaceutical wholesaler to the pharmacies, including VAT) plus pharmaceutical services fee of 28% on the pharmacies’ nett price. 

The pharmacies, drug stores, and hospital/clinic pharmaceutical installations may only sell drugs at an equal or lower price than the highest retail price, unless the price provided on the label is no longer valid. 

 

Medical devices

There is no specific regulation on pricing for medical devices.

 

13. How are drugs and devices used by patients paid for? What roles do public and private payers play?

Patients pay for drugs and devices out-of-pocket or financed by private insurance or the Health BPJS. Some also enjoy the benefit of medical allowances provided by their employers. 

Although currently the majority of Indonesians have been registered as participants of Health BPJS, due to the limitation of coverage provided by the Health BPJS, a good portion of the participants either elect to pay for drugs and devices entirely out-of-pocket or pay for the excess not covered by the Health BPJS.

 

14. Who dispenses drugs and devices to patients and how are those dispensers compensated?

Drugs

Drugs dispensing and services based on prescription must be carried out by licensed pharmacists. 

In remote areas where no pharmacist is available, the MOH may assign licensed pharmacy technical personnel to primary health services facilities to compound and dispense drugs to patients. Furthermore, in more remote areas where no pharmacy is available, licensed doctors or dentists may compound and dispense drugs to patients.

Drugs dispensers (i.e., pharmacists) are compensated either by way of salary or on their own account. Pharmacists are allowed to establish pharmacies using their own and/or their investors’ capital (individual/company). 

 

Medical devices

There is no general regulation on medical device dispensing. 

 

15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?

Main responsibilities of pharmacists in dispensing drugs consist of 3 stages, namely, preparation, delivery and providing information on the drugs. In general, the main duties of the pharmacists include:

1. Dispensing drugs in accordance with the prescription, including compounding if necessary;
2. Ensure correct labelling and packaging of the drugs;
3. Ensure that the drugs are given to the correct patients or their families;
4. Providing information to the patients on the use and dosage of the drugs, as well as its side effects and list of consumables that must be avoided during consuming the drugs;
5. Maintaining records of dispensed drugs; and
6. Educating patients who require OTC drugs for mild disease.

 

 

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Click the following links to read more legal articles from Indonesia:

1. Regulatory Pricing and Reimbursement Overview
2. Preclinical and Clinical Trial Requirements
3. Marketing, Manufacturing, Packaging & Labeling, Advertising
4. Traditional Medicines and OTC Products
5. Product Liability
6. Patents & Trademarks
7. Regulatory Reform
8. Cannabinoid Drugs, Medicinal Cannabis and Opioid Drugs

Also from this Legal Handbook

The key facts about localization in the Indonesian pharma market. Prepared in association with ABNR, a leading global law firm, this is an extract from The Pharma Legal Handbook: Indonesia, available to purchase here for GBP 99.

1. Are there any rules or regulations requiring and/or encouraging localization in your country? What is the legal framework defining these localization rules and policies?

In principle, MOH Regulation No. 1010/MENKES/PER/XI/2008, as amended by MOH Regulation No. 1020/MENKES/PER/XII/2008 on Drugs Registration, requires that the agreement between an offshore manufacturer of drugs and a domestic manufacturer registering the imported product in Indonesia, must stipulate a transfer of technology requirement to enable the drug to be produced in Indonesia within 5 years of registration. However, this requirement is not applicable to products that are still patent-protected.

Further, BPOM Regulation 24/2017, which is an implementing regulation for the drug registration process, stipulates that the registration of imported drugs is prioritized for products that are:

1. included in the national health program as determined by the government agency in charge of national health program;
2. newly discovered, including products that are still patent-protected or originator products; and/or
3. drugs that are needed but cannot be produced domestically, such as:

• drugs that require special technology and production facilities that are not available in Indonesia;
• drugs that require special technology and production facilities that are already available in Indonesia, but local manufacturing capacity cannot meet domestic demand;
• drugs that economically are not feasible to be produced locally as the demand is very low, such as “orphan drugs”; or 
• drugs that are centrally produced in an offshore facility by a multinational pharmaceutical company having a pharmaceutical manufacturing presence in Indonesia, indicated by the balance between import and export volumes.

It is worth noting that in 2016, President of the Republic of Indonesia, Joko Widodo, through Presidential Instruction No. 6 of 2016 on the Acceleration of Development of Pharmaceutical and Medical Devices Manufacturing Companies (“Presidential Instruction”), instructed various ministers and heads of governmental bodies (“Ministers”) to take steps in accordance with their respective duties, functions and authorities to support this acceleration in order to achieve independence and to increase the competitiveness of the domestic pharmaceutical and medical devices industries. 

Following the issuance of the Presidential Instruction, in 2017, the MOH issued MOH Regulation No. 17 of 2017 on an Action Plan for the Development of Pharmaceutical and Medical Devices Manufacturing Companies (“Regulation 17/2017”). Regulation 17/2017 contains a detailed roadmap for the independence of the domestic pharmaceutical and medical devices industry, including requirements for manufacturers to prioritize the use of raw materials produced in Indonesia. 

Regulation 17/2017 also encourages pharmaceutical and medical device manufacturing companies to independently produce drugs, raw materials, and medical devices for national and export needs, and to use the local pharmaceutical and medical devices. However, as the nature of Regulation 17/2017 is more of a strategic roadmap for the industry, it does not specify any concrete incentives for industry to encourage localization. 

 

 

2. Have there been any recent significant changes involving localization rules? If yes, when did they take place and what did they involve?

A major change occurred in 2020 with the issuance of the Omnibus Law as part of the Indonesian government’s efforts to cut down unnecessary formalities and simplify business licensing for the purpose of attracting more investors. The Omnibus Law amends and/or revokes approximately 76 previously existing laws and regulations. In line with the spirit of Omnibus Law, Presidential Regulation No. 10 of 2021 on Business Fields of Investment was issued on 2 February 2021 (as further amended by Presidential Regulation No. 49 of 2021) and became effective on 4 March 2021 (“Investment List”). Under the Investment List, pharmaceutical manufacturing business is now open to 100% foreign ownership (previously limited to a maximum of 85% foreign ownership).

Further, as a response to the COVID-19 pandemic, the BPOM issued amendments to BPOM Regulation 24/2017 to enable emergency use authorization (EUA) for ease of access to COVID-19 vaccines and medicines during public emergency period. The amendment is effective as of 29 September 2020.

 

3. Is the process of obtaining a marketing authorization impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

Registration of marketing authorization for imported drugs can only be applied for by companies that have obtained a pharmaceutical manufacturing license in Indonesia, including multinational pharma companies engaged in manufacturing activity in Indonesia. A manufacturer of imported drugs must also provide the following documents for review by BPOM:

1. Pharmaceutical manufacturing license issued by the authority of the country of origin;
2. GMP certificate issued by the drugs supervisory authority of the country of origin and/or drugs supervisory authority of another country;
3. The latest inspection report conducted no later than 2 years prior to the application and issued by the drugs supervisory authority of the country of origin and/or drugs supervisory authority of another country. 

If required, BPOM may conduct a physical inspection of an offshore manufacturing facility to ensure compliance with the GMP requirements. 

Further, the registration of marketing authorization for imported drugs must be accompanied by evidence on why the imported drugs cannot be produced in Indonesia.

The registration of imported drugs must gradually be carried out by technology transfer to be produced domestically, which can be in the form of transfer of knowledge/skills in the fields of: (i) product development; (ii) production techniques and methods/processes; and/or (iii) quality control.

Specifically for drugs imported for emergency use during public emergency period, the amendment to BPOM Regulation 24/2017 in 2020 exempts pharmaceutical manufacturers in Indonesia from the obligation to obtain regular marketing authorization for the importation of such drugs, and they are allowed to import the drugs on the basis of EUA. Certain leniencies and flexibilities with respect to application documentation related to safety, efficacy, and quality are given to drugs imported in this context, as stipulated in Head of BPOM Decree No. HK.02.02.1.2.11.20.1126 TAHUN 2020 on Technical Guidelines for the Implementation of Emergency Use Authorization as amended by Head of BPOM Decree No. HK.02.01.1.2.06.21.234 TAHUN 2021. Nevertheless, EUA is only valid until the end of the public emergency period by the government and will then be reviewed according to current developments and conditions.

 

4. Is the pricing process for pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

No, the pricing process for pharmaceutical products in Indonesia is neither impacted nor influenced by localization policies.

 

5. Is the reimbursement of pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

The drugs reimbursement program is not directly impacted by localization policies. However, it is heavily related to the public tender for pharmaceutical products as detailed in answer to question 6 below.

 

6. Is the access to public or public tenders of pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

The drugs that can be reimbursed under the program maintained Health BPJS must be listed in the list of drugs maintained by the Health BPJS. In the tender process, Health BPJS is subject to the government procurement procedure. The government tender procedure stipulates that local products must be prioritized over imported products, unless the products cannot be produced in Indonesia yet or the volume of local production cannot meet demand.

Based on Presidential Instruction and Regulation 17/2017, to prioritize the use of locally produced pharmaceutical products, their procurement must be carried out through e-tendering and e-purchasing on an e-catalogue basis. 

 

7. Are import tariffs, importation and/or exportation permits, trade and/or taxation of pharmaceutical products impacted by localization policies in your country? If yes, how so?

The Presidential Instruction instructed the Minister of Finance (“MOF”) to formulate the fiscal incentives that support the growth and development of the drugs and medical device manufacturing companies. In 2019, the Indonesian Government issued Government Regulation No. 78 of 2019 on Income Tax Facilities for Specific Business Fields and/or Specific Regions, which stipulates that specific lines of business, including pharmaceutical manufacturing, are eligible for income tax facilities. The tax allowance shall apply to all products within such line of business except for those that are already subject to corporate income tax reduction facilities, currently stipulated under MOF Regulation No. 13/PMK.010/2020 on Provision of Corporate Income Tax Reduction Facilities. The MOF has further issued MOF Regulation No. 11/PMK.010/2020 on the Implementation of Government Regulation No. 78 of 2019 on Income Tax Facilities for Specific Business Fields and/or Specific Regions as amended by MOF Regulation No. 96/PMK.010/2020 as an implementing regulation to the tax allowance provisions.

In order to further manage the spread of COVID-19 in Indonesia, the MOF issued MOF Regulation No. 239/PMK.03/2020 on Provision of Tax Facilities on Goods and Services Needed in the Framework of Management of the Corona Virus Disease 2019 Pandemic and Extension of Implementation of Income Tax Facility based on Government Regulation No. 29 of 2020 on Income Tax Facilities in the Framework of Management of Corona Virus Disease 2019 (COVID-19). The regulation provides Value Added Tax (VAT) facilities and Income Tax facilities for pharmaceutical industries that import raw materials for vaccines and/or drugs for COVID-19 management.

 

IMPORT TARIFFS

Import tariffs are primarily regulated under MOF Regulation No. 6/PMK.010/2017 on the Determination of Goods Classification System and Imposition of Import Duty Tariff, as lastly amended by MOF Regulation No. 17/PMK.010/2020 (“Import Tariff Regulation”) which is determined by the Harmonized System Code (“HS Code”) of the imported goods. Import tariffs for pharmaceutical products under HS Code headings ‘30’ vary within the range 0%-15%. Import tariffs for medical devices must be checked by their respective specific HS Code against the list attached in the Import Tariff Regulation.

 

IMPORT PERMITS 

Import and export permits are not subject to localization policies, except to the extent that importers are subject to local safety, quality, and labelling standards to enter the Indonesian market, as well as the requirement to obtain an import certificate from BPOM for each importation.

 

8. Are there any other incentives or advantages offered by the current local localization rules in your country? If yes, what are they?

There is no other incentives or advantages offered by the current local localization rules.

 

9. Are there discussions about the possibility of implementing localization policies in your country? If yes, what are the proposed reforms and when should they come into place?

None that we are aware of.

 

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1. The relevant ministers and head of governmental bodies consist of: (i) Coordinating Minister for the Economy; (ii) Coordinating Minister of Human and Cultural Development; (iii) Minister of Health; (iv) Minister of Finance; (v) Minister of Research, Technology and Higher Education; (vi) Minister of Industry; (vii) Minister of Trade; (viii) Minister of Agriculture; (ix) Minister of State-Owned Enterprises; (x) Head of Indonesia Coordinating Investment Board; (xi) Head of Indonesia National Agency of Drug and Food Control; and (xii) Head of National Procurement Board.