Ref. Ares(2017)5268976 - 27/10/2017
Ref. Ares(2019)3157032 - 13/05/2019
To:
KONIG Helena (TRADE); 4.1(b)
Subject:
Report of the meeting on IDN with Medecines for Europe and Fresenius-KABI,
19 October 2017
Fyi
On 19 October 2017, DG TRADE 4.1(b)
) met " Medicines for
Europe", representing generics in the pharmaceutical industry, and Fresenius-Kabi. Fresenius-Kabi, in
particular, represents a 5 bn US dollar- business with most sales taking place abroad (3 Bn US dollars). It
owns a subsidiary and has a joint venture in Indonesia. It employs about 300 people in Indonesia.
Fresenius-Kabi's representative showed a deep understanding of Indonesia's dynamics and stressed that
it is difficult , in general, to point to trade restrictive legislation as barriers are built through practice (N.B.
this confirms our experience in all fields).
4.2
DETAIL
MfE pointed to the main following elements (N.B. also conveyed via the questionnaire addressed to
stakeholders when the negotiations for an EU-IDN FTA were launched):
• IDN represents an interesting market due to its size and the Government's intention to extend
health insurance to all. However, it is difficult for foreign industries to sell or invest
in loco due to
numerous trade barriers. On the other hand, tariffs are low and there are reportedly no
intention to increase them.
• Halal legislation has the potential to become one of the main barriers. IDN will soon implement
the framework law No 33/2014 (in 2019) and the establishment of an
ad hoc agency (BHJPH) is
evidence of that. Though not directly placed under the Ministry of religious affairs , its highest
officials are former members thereof. The halal legislation is reported to impose mandatory
certification and mandatory labelling for halal certified products and for non-halal products.
While halal certification will be reportedly mandatory only for those who wish to be certified,
non-halal ingredients must clearly be indicated on the label. MfE drew attention to the need to
avoid an halal logo on the package (as a marking of 'non halal' would in practice mean that this
product would no longer be bought). For active pharmaceutical ingredients (APIs), it is
impossible to trace the origin in order to ensure compliance with halal requirements. This affects
all pharmaceutical producers, local and foreign. Important to note that both generic industry
(MfE) as well as EFPIA are equally concerned by this. 4.2
• 4.2
• It is uncertain whether the industry will continue to either produce or sell pharmaceuticals in
Indonesia. Legal uncertainty affects the industry's decision to place new products on the market
due to costly, lengthy authorization processes. The Government's practice mainly limits people's
access to pharmaceuticals, as most medicinal products are of imported origin in Indonesia.
Potential uneven application of the law is a threat, in particular for foreign manufacturers.
• Labelling rules (fully integrated to the product, in Bahasa) require costly, resource intensive
compulsory labelling on the imported product, no stickers or possibility to relabel in-country are
allowed.
• Procurement rules have an implicit bias towards buying from 100% domestic companies (rather
than from JVs based in Indonesia)
• 4.1(a) and 4.2
We agreed to continue our exchanges.
4.1(b)
Senior Expert
4.1(b)
European Commission DG TRADE
Unit C2 “South and South East Asia, Australia, New Zealand”
4.1(b)
B-1049 Brussels/Belgium
4.1(b)