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Novo Nordisk’s Expansion in Indonesia to Boost Pharmaceutical Market Attractiveness
Indonesia's pharmaceutical market offers high-growth potential for multinationals, driven by increasing healthcare needs and a partnership between Novo Nordisk and Bio Farma, despite challenges like a weak investment climate.
Key View
- Indonesia’s pharmaceutical market will continue to represent a high-growth opportunity for multinational drugmakers.
- Bolstering domestic pharmaceutical production will bode well for Indonesia’s export potential.
- Weak intellectual property framework and business climate could dissuade investment in pharmaceutical sector and create a challenging environment for drugmakers.
Indonesia’s pharmaceutical market will continue to represent a high-growth opportunity for multinational drugmakers. On July 9 2024, Novo Nordisk signed an agreement with Indonesia’s state-owned pharmaceutical company Bio Farma to package insulin in the country. Under the memorandum of understanding, Novo Nordisk will bring in its know-how in diabetes care and insulin manufacturing while Bio Farma will contribute its local facilities. The success of this partnership will position Indonesia as an attractive destination for other global pharmaceutical companies looking to expand their operations in Southeast Asia. Indeed, demonstrating the ability to successfully collaborate on large-scale pharmaceutical projects can enhance the market’s reputation and attract further investment in biopharmaceutical research and development.
Indonesia’s pharmaceutical industry has shown significant growth and development over the past few decades. It is one of the largest in Southeast Asia and continues to expand due to various factors, including a growing population, increased healthcare spending and government initiatives. Moreover, ageing population is another critical factor, with approximately 15% of Indonesia’s population expected to be over the age of 60 by 2030. This demographic shift will drive demand for chronic disease medications and specialised healthcare products. Indonesia has seen an increase in the prevalence of diabetes with an estimated 19mn people suffering from this chronic disease. This is expected to rise to an estimated 28.6mn people by 2045. Additionally, ongoing investments in healthcare infrastructure and digital health solutions, which was accelerated by the Covid-19 pandemic, are poised to further boost the pharmaceutical industry.
Novo Nordisk, the Danish pharmaceutical giant, is making significant strides in Indonesia, a market ripe for expansion in the healthcare sector. By establishing a stronger presence in this Southeast Asian nation, Novo Nordisk aims to meet the increasing demand for diabetes and obesity treatments. Indonesia’s growing middle class and rising prevalence of lifestyle-related diseases create a fertile ground for pharmaceutical companies seeking to enhance healthcare standards and capture new market shares.
The company’s expansion strategy focuses on local partnerships and investments, which are essential to navigate Indonesia’s complex regulatory landscape. This approach not only facilitates smoother market entry but also fosters collaboration with local healthcare providers. By working closely with stakeholders, Novo Nordisk is committed to developing tailored solutions that cater to the unique health challenges faced by the Indonesian population, thereby enhancing accessibility to critical medications.
In doing so, Novo Nordisk not only strengthens its market position but also contributes to elevating the overall pharmaceutical market appeal in Indonesia. As more global companies follow suit, the nation stands poised for a healthcare transformation, promising improved health outcomes and a robust pharmaceutical ecosystem that benefits patients and providers alike.
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