INDONESIA Law and Practice Contributed by: Wincen Santoso and Muhammad Pravest Hamidi, Santoso, Martinus & Muliawan Advocates
highest retail price will be in the form of a formula of the highest retail price. Pharmacies, drug stores, and hospital or clinic phar- maceutical installations are required to sell drugs at prices equal to or lower than the highest retail price indicated on the label. If the price provided on the label is no longer valid, they must adjust accordingly to comply with current regulations. Medical Devices There is no specific regulation on pricing for medical devices. 8.2 Price Levels of Pharmaceuticals or Medical Devices The price levels of pharmaceuticals and medical devices in Indonesia do not generally depend on the prices for the same products in other countries but rather are mainly determined by the production cost and the variables introduced by the importation process. The government has previously expressed concerns about the high price of certain imported pharmaceutical materials, which is caused by the fluctuating exchange rates, in the Appendix to MOH 17/2017. In 2023, the MOH conducted a focus group discus- sion regarding access to and production of innovative drugs, comparing drug prices in Indonesia with those in other countries. 8.3 Reimbursement From Public Funds While there is no specific regulation directly address- ing the reimbursement of pharmaceuticals and medi- cal devices, the public healthcare system is effective- ly managed by BPJS Health ( Badan Penyelenggara Jaminan Sosial Kesehatan) , an independent authority established to administer the national health insur - ance programme.
BPJS Health mandates that every Indonesian citi- zen participates in the health security programme, regardless of any existing health insurance policies they may hold. It collects periodic contribution fees from all enrolled participants. These contributions are structured based on income levels. BPJS Health’s coverage encompasses a wide range of health services, including the costs associated with pharmaceuticals and medical devices. The extent and circumstances under which these costs are reimbursed from public funds are deter- mined by the policies and operational guidelines set forth by BPJS Health. 8.4 Cost-Benefit Analyses There is no specific regulation that governs the appli- cation of cost-benefit analysis in determining what price should be paid for pharmaceuticals or medical devices or in determining whether pharmaceuticals or The regulations concerning prescriptions by physi- cians and dispensing by pharmacies are not aimed at curbing spending on pharmaceuticals but, rather, at ensuring the safety of patients and protecting the community from the circulation of unsafe drugs. Pursuant to Article 320 of Law 17/2023 as amended, there are three types of drugs where a prescription is mandatory – namely, potent drugs ( obat keras ), narcot- ics, and psychotropics. The dispensing of prescription drugs that circumvent the prescription requirement risks imprisonment of up to 12 years and a fine of up to IDR2 billion. Additionally, the illegal distribution of narcotics and psychotropics carries a severe penalty, whereby the death penalty may be imposed in certain circumstances. medical devices should be reimbursed. 8.5 Regulation of Prescriptions and Dispensing by Pharmacies
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