Pfizer to grow manufacturing capacity in Indonesia

Pfizer ($PFE) will expand in Indonesia ahead of government plans to offer health insurance for some low-income people.

The U.S. company will invest $3 million to bump up capacity there 50%, reports The Jakarta Post. 

Widyaretna Buenastuti, director of Pfizer Indonesia, says the company will make generic versions of its branded products for the Indonesia market to increase its market share. The lower margins should be offset by the growing market in Indonesia, which will get a substantial boost from the new health plan. The system, which will cover low-income people, is slated to be in place by the end of the year.

"We offer an alternative for doctors when distributing medicine to patients, with no difference in quality between generic and our research-based drugs," Widyaretna tells The Post. "With a population of 245 million, I don't think the production capacity of Indonesia's existing pharmacy factories will be enough to satisfy demand after the SJSN is implemented," she said.

Indonesia is among what IMS Health refers to as the 17 "pharmerging markets," where annual double-digit growth is expected through 2015. While it is a huge and growing market for drug manufacturers, the government is making it more difficult for companies to sell into the market unless they also have local manufacturing operations. A U.S. Trade Representative document says that since 2008, the country's food and drug agency, BPOM, "has been rejecting or delaying the approval of new applications for drug registrations by some companies, including wholesalers and distributors that do not have manufacturing operations in Indonesia."

- read The Jakarta Post story