Foreign Investment in Pharmaceuticals Hampered by Regulations
Friday, 07 November, 2008 | 14:34 WIB
TEMPO Interactive, Jakarta:The inclusion of the pharmaceutical industry in the negative investment list will hamper its expansion. The policy is seen to be affecting future foreign investment in Indonesia.
International Pharmaceutical Manufacturers Group (IPMG) executive-director, Parulian Simanjuntak, said limiting share ownership will restrict foreign investment in the pharmaceutical business in the future. "Investing in the pharmaceutical industry requires a great amount of money. It is hard to find local partners that can inject 25 percent of the total funds required for the investment," he explained yesterday.
According to Parulian, the negative investment list policy also impedes the merger and acquisition process, forcing some international companies to delay their plans to do that.
IPMG members include Abbott, Bristol Myers Squibb, Eli Lilly, Janssen, Merck Sharp and Dohme, Pfizer, Schering Plough, and Wyeth from the US; Novartis and Roche (Switzerland); Boehringer Ingelheim, Merck, and Bayer Schering Pharma (Germany); Actavis (Iceland); Astellas, Eisai, Meiji, Otsuka, Takeda, and Tanabe (Japan); Sanofi-Aventis, Solvay, and Servier (France); Transfarma Medica-Indah (Singapore); Astra Zeneca and Glaxo Smith Kline (UK); and Novo Nordisk (Denmark).
Presidential Decrees no. 76/2007 and no. 77/2007 place the pharmaceutical industry in the list of negative investment. The decree was then revised by Government Regulation no. 111/2007 on the list of Pharmaceutical Businesses Closed to Foreign Investment, and Businesses Open to Foreign Investment with Requirements. The latter covers plantations, prepared drugs industry, medical material manufacturing industry, including pharmaceuticals and producers of narcotics. Additionally, foreign investors can only own a maximum of 75 percent of total shares in the pharmaceutical industry.
Industry Minister Fahmi Idris said last month that he was considering taking out the pharmaceutical industry from the investment negative list.
PT Meiji Indonesia CEO Ahaditomo said, because of the policy, expansion plans of the pharmaceutical industry expansion have been hampered. He said his company has yet to carry out any expansion operations.
Meanwhile, the Pharmacy Companies Association chairman, Antony Charles Sunarjo, supports the government's plan to withdraw pharmaceuticals from the negative list. However incoming investors are carrying out research in medicines to cure cancer, AIDS, and the avian flu. "They are not our competitors," he told Tempo yesterday. The investment negative list, he said, can still be applied to companies which produce generic drugs. "Because domestic companies can already produce them."
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TEMPO Interactive, Jakarta:The inclusion of the pharmaceutical industry in the negative investment list will hamper its expansion. The policy is seen to be affecting future foreign investment in Indonesia.
International Pharmaceutical Manufacturers Group (IPMG) executive-director, Parulian Simanjuntak, said limiting share ownership will restrict foreign investment in the pharmaceutical business in the future. "Investing in the pharmaceutical industry requires a great amount of money. It is hard to find local partners that can inject 25 percent of the total funds required for the investment," he explained yesterday.
According to Parulian, the negative investment list policy also impedes the merger and acquisition process, forcing some international companies to delay their plans to do that.
IPMG members include Abbott, Bristol Myers Squibb, Eli Lilly, Janssen, Merck Sharp and Dohme, Pfizer, Schering Plough, and Wyeth from the US; Novartis and Roche (Switzerland); Boehringer Ingelheim, Merck, and Bayer Schering Pharma (Germany); Actavis (Iceland); Astellas, Eisai, Meiji, Otsuka, Takeda, and Tanabe (Japan); Sanofi-Aventis, Solvay, and Servier (France); Transfarma Medica-Indah (Singapore); Astra Zeneca and Glaxo Smith Kline (UK); and Novo Nordisk (Denmark).
Presidential Decrees no. 76/2007 and no. 77/2007 place the pharmaceutical industry in the list of negative investment. The decree was then revised by Government Regulation no. 111/2007 on the list of Pharmaceutical Businesses Closed to Foreign Investment, and Businesses Open to Foreign Investment with Requirements. The latter covers plantations, prepared drugs industry, medical material manufacturing industry, including pharmaceuticals and producers of narcotics. Additionally, foreign investors can only own a maximum of 75 percent of total shares in the pharmaceutical industry.
Industry Minister Fahmi Idris said last month that he was considering taking out the pharmaceutical industry from the investment negative list.
PT Meiji Indonesia CEO Ahaditomo said, because of the policy, expansion plans of the pharmaceutical industry expansion have been hampered. He said his company has yet to carry out any expansion operations.
Meanwhile, the Pharmacy Companies Association chairman, Antony Charles Sunarjo, supports the government's plan to withdraw pharmaceuticals from the negative list. However incoming investors are carrying out research in medicines to cure cancer, AIDS, and the avian flu. "They are not our competitors," he told Tempo yesterday. The investment negative list, he said, can still be applied to companies which produce generic drugs. "Because domestic companies can already produce them."
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