The pharmaceutical market in Indonesia is growing rapidly. GDP growth reached 6.1% in 2010 and nominal GDP is projected to grow 15% to around Rp7,500 trillion in 2011. Total health expenditure as a percentage of GDP has averaged 2% but the government aims to increase this to 5% by 2015 through expanding national health insurance. The growing middle class, rising incomes, urbanization, and focus on healthcare are driving demand for pharmaceutical products. The pharmaceutical industry in Indonesia is dominated by domestic firms and relies heavily on imported active pharmaceutical ingredients. The market is expected to continue strong growth of 13.4% annually through 2014 due to economic and demographic factors.

1. Pharma Market Growth in Indonesia
Johannes Setijono
2011
Excellence in Execution

2. Macro Environment & Trend
Excellence in Execution

3. Indonesia by the Numbers
The growth of Indonesian real GDP reached 6.1% in 2010
GDP Growth In Indonesia • With these developments,
8000 30
Nominal GDP can grow about
26.27
7,500 15%, which is around
7000 Rp 7,500 Tn or about $ 850 Bn in
6,500 25 2011
6000 20.87
20.37 5,613
• Income per capita will reach about
(In IDR Trillion)
20
5000 17.43 4,951
$ 3,500
(In %)
15.80
4000 14.01 3,921 15
15.38
3,339
13.37
3000 2,774
10
2,295
2000
6.3 6.8 5
6.1 6.1
1000 5
5.7 5.5
4.5
0 0
2004 2005 2006 2007 2008 2009 2010 2011
Year
Nominal GDP Nominal GDP Growth Real GDP Growth
Source: Prospek Perekonomian Indonesia 2011 – Cyrillus Harinowo
Excellence in Execution

4. Indonesia by the Numbers
Regional GDP Growth – 2011 E
%
9 8.5 8.5
8
7 6.5
6 5.5 5.5
5 5
5
4.3 4.1 4
4
3
2 1.4
1
0
Indonesia
Singapore
Philippines
Thailand
Malaysia
Hongkong
Taiwan
India
Korea
Japan
China
Source: Macquarie Research, October 2010
Excellence in Execution

5. Outlook for Year 2008 – 2015
• In 2004, Indonesia was still number 25-26 with Saudi Arabia
• In 2007, we were number 20, beyond Austria, Norway and
Taiwan
• In 2008, we had surpassed Switzerland, Belgium and
Sweden, so that put us at number 18-19
• In 2015, our economy will generate income per capita of
about $ 5,000 (such as Malaysia in 2006 but with a population
of 8x more). If in the year 2011 our income per capita reached
approximately $ 3,500, then the above target is likely to be
exceeded
• This 5 years period will be very crucial to the Indonesian
business world. (Various foreign investors will expand or
penetrate the market within the next 5 years)
Excellence in Execution

6. Indonesia’s Health Spending Trends
• Total expenditure on health averaged 2% of GDP Total Expenditure on Health as % of GDP
over the 11 year period 1996-2006. 2.5
2.0
• The Government is planning to implement the 1.5
National Social Security System. Since 2004, the 1.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Government has implemented healthcare Source: The World Bank
program for poor people through Asuransi Share of Total Health Expenditure (%) 1996-2006
Kesehatan Masyarakat Miskin (Health Insurance 70
60
for Poor Population) or Askeskin program and 50
currently is replaced by Jaminan Kesehatan 40
30
Masyarakat (Public Health Insurance Scheme for 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
the Population) or Jamkesmas program. public private out-of-pocket private
Source: WHO National Health Accounts database, September 2008
• In Q4 2009, the new Healthcare Law has been Total Expenditure on Health as % of GDP
approved and provides guideline for Government Indonesia 2.5
to increase the healthcare spending from 2% up Philippines 3.2
to 5% of GDP (Healthcare Law No. 36/2009, Malaysia 4.2
Article 171 paragraph 1) China 4.7
India 5.0
Vietnam 6.0
- 1.0 2.0 3.0 4.0 5.0 6.0 7.0
Source: Daily Newspaper Suara Pembaruan , 29 March 2010
Excellence in Execution

7. Relevant Trends in Indonesia
Growing wealth of middle class to drive demand
• Middle class to rise from 19% of Asian population in 2009 to 30% by 2014
• Indonesia has a young population, where 44% are below 24 years old
Source: CLSA Mr & Mrs Asia Moving up the J-curves – Spring 2010
Excellence in Execution

8. Relevant Trends in Indonesia
Urbanization
• Urban areas in Indonesia grew at an annual rate of 3.8% between 1990 and
2005, compared to the average growth in total population of 1.4% per annum
• As of end-2009, 44% of Indonesia’s population live in urban areas
• Based on United Nation’s estimates, the urbanization trend will continue to
accelerate, increasing the proportion of people living in urban areas to 65% by
2050. We expect this trend to facilitate growth in health care
Source: Merrill Lynch Equity -ASEAN-Real Estate/Property – August 2010
Excellence in Execution

9. Relevant Trends in Indonesia
Demographic
Indonesian population by Generation Group 2010-2016 (in ‘000)
300,000
2010 vs 2016 Growth
250,000
43,360 45,076 46,862 48,708 50,461 26.0%
40,058 41,686
200,000
49,305 50,294 51,251 52,192 53,103 53,997 54,893 11.3%
150,000
100,000
103,127 103,233 103,317 103,369 103,353 103,271 103,311 0.2%
50,000
40,988 41,118 41,247 41,377 41,498 41,595 41,673 1.7%
-
2010 2011 2012 2013 2014 2015 2016
Gen Z (age 0 - 9) Gen Y (age 10 - 34) Gen X (age 35 - 49) Baby Boomers (age 50 - 75+)
• From the chart above, baby boomers and retire (>54) population have the biggest
growth until 2016
people’s life expectancy longer  people’s health awareness higher
• Productive people (25 – 54) (gen X and partial gen Y) also growing around 11.3%
Source: Data Statistik Indonesia
Excellence in Execution

10. Industri Farmasi Indonesia
Excellence in Execution

11. Global pharma market tumbuh lebih dari US$1,200 billion
di tahun 2014, didorong oleh Pharmerging markets
Source: IMS Health, Market Prognosis, Mar 2010. New Pharmerging definition
ASEAN Market Overview specially prepared for Kalbe Farma
Excellence in Execution

12. Meskipun pasar APAC melambat, tetapi pasar
China, India, Indonesia, and Vietnam diperkirakan tumbuh “double
digit”
Historical Growth 2005 – 2009 CAGR (LCD/MNF)
IMS data Bubble size corresponds to 2014 Sales
Excellence in Execution

13. China merupakan market terbesar APAC, dan generik
tumbuh paling pesat dibanding branded.
China Market Sales Growth by Segment
IMS MIDAS Q2 2010
ASEAN Market Overview specially prepared for Kalbe Farma
Excellence in Execution

14. China di tahun 2009 menempati ranking 5 dan diperkirakan
naik ke ranking 3 untuk pasar farmasi di dunia
ASEAN Market Overview specially prepared for Kalbe Farma
Excellence in Execution

15. Growth driver China pharmaceutical market
• Kenaikan GDP
• Jumlah penduduk menengah atas yang meningkat tajam  gaya hidup
berubah, termasuk meningkatnya health spending; dan meningkatnya
kebutuhan health service & product yang lebih baik
• Regulasi pemerintah yang lebih baik:
– Kebijakan untuk meningkatkan kualitas industri farmasi (dari 5000  3500
industri farmasi (2004)
– Kebijakan perluasan asuransi kesehatan nasional dan perbaikan list obat dalam
asuransi
– Kebijakan investasi yang mendukung perkembangan industri farmasi, baik
dalam bidang riset bahan baku sampai produk jadi dan biotechnology serta
TCM
– Kebijakan IP, tenaga kerja ekonomis  investasi asing masuk
– Kebijakan kolaborasi ABG yang kuat & Insentif terhadap riset
– Kebijakan peningkatan kualitas pelayanan RS
• Akses healthcare yang lebih baik  perbaikan dalam sarana kesehatan
• Peningkatan kualitas produk; riset bahan baku dan produk jadi serta
biotechnology; distribusi produk
• Jumlah retail yang berkembang dengan pesat
Excellence in Execution

16. Pola kenaikan GDP Indonesia sama dengan
China dan India……
Excellence in Execution

17. Indonesia merupakan lapisan 3 sumber
pertumbuhan pharma dunia….
Excellence in Execution

18. Di kawasan ASEAN, pasar farmasi Indonesia masih
menjadi magnet untuk investasi
Historical performance of ASEAN markets
ASEAN Annual growth rate =14.7%
ASEAN 4-year
CAGR =14.2%
Source: IMS MIDAS MAT Dec 2010. ‘ASEAN’ includes Thailand, Indonesia, Philippines, Vietnam, Malaysia & Singapore in USD
ASEAN Market Overview specially prepared for Kalbe Farma
Excellence in Execution

19. Profil Industri Farmasi
 Industri farmasi Indonesia mempunyai market
share yang baik (perusahaan farmasi domestik
mendominasi pasar Indonesia)
 Ketergantungan pada bahan baku impor
menyebabkan industri farmasi sangat rentan
pada perkembangan harga bahan baku obat di
pasar internasional dan fluktuasi nilai tukar
(lebih dari 90% bahan baku obat diimpor)
 Penyerapan tenaga kerja di seluruh rantai
farmasi sekitar 250.000 tenaga kerja
 208 produsen farmasi termasuk 33 perusahaan
asing & 4 BUMN di Indonesia dapat memenuhi
kebutuhan seluruh sektor ekonomi masyarakat
Indonesia, dari lapisan atas ke bawah
Excellence in Execution

20. Secara value, pasar ethical dan OTC mengalami
pertumbuhan yang melambat
ASEAN Market Overview specially prepared for Kalbe Farma Source: IMS,: ITMA, MAT 4Q10
Excellence in Execution

21. Secara unit, pasar ethical dan OTC mengalami
kenaikan..
ASEAN Market Overview specially prepared for Kalbe Farma Source: IMS, ITMA, MAT 4Q10
Excellence in Execution

22. Sumber pertumbuhan pasar ethical adalah volume, BUKAN lagi
berasal dari harga; yang mengakibatkan beberapa industri
memperluas fasilitasnya
EGS MAT 4Q09 Interaction EGS MAT 4Q10
New Products 1%
New Products Interaction
5% 3% 1%
Price Changes
23%
Price Changes
40%
Line Extension
5%
Volume
Change Volume Change
49% 68%
Line
Extension
5%
Value= 19,564 bn Value= 21,945 bn
Growth = +14.0% Growth = +12.2%
ASEAN Market Overview specially prepared for Kalbe Farma Source: IMS: ITMA-Ethical Only MAT 4Q10
Excellence in Execution

23. Terjadi penurunan jumlah produk baru yang diluncurkan
Number of Products Launch per Year
250
200
150
100 Avg : 150
50 Avg : 63
Avg : 33
0 Avg : 9
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Foreign Ethical Foreign OTC Local Ethical Local OTC
ASEAN Market Overview specially prepared for Kalbe Farma Source: IMS: ITMA-Ethical Only MAT 4Q10
Excellence in Execution

24. Pasar farmasi Indonesia 2006 – 2014 (est.)
Pasar Indonesia diperkirakan mengalami
pertumbuhan CAGR 13.4% karena didorong
oleh:
• pertumbuhan GDP
7 • health spending government
• % rakyat yang mempunyai asuransi
• kepedulian masyarakat terhadap kesehatan
6 CAGR = 13.4%
• demografi
5
CAGR = 12.4%
4
3
2
1
2.3 2.5 3.0 3.4 3.7 4.2 4.7 5.4 6.1
0
2006 2007 2008 2009 2010 2011 2012 2013 2014
Excellence in Execution

25. Pasar Farmasi Indonesia
 Prospek industri farmasi di Indonesia masih tumbuh dengan
baik dan menjanjikan
 Kita harus mengantisipasi perubahan-perubahan yang
terjadi baik dari segi demografi, urbanisasi, dan juga
perubahan sistem, seperti asuransi
 Dengan adanya pressure atau tekanan dari
pemerintah, pertumbuhan pasar farmasi Indonesia akan
lebih banyak dipengaruhi oleh kenaikan volume dan produk
baru, dibandingkan dengan kenaikan harga
Excellence in Execution

26. Excellence in Execution