Indonesia + Post-COVID Healthcare

Indonesia’s new health reform law paves the way for increased investment in healthcare innovation which is key to strengthening the country’s health resilience. This is particularly important to achieve its ambitious vision of becoming a ‘prosperous high-income industrialized nation by 2045’. With two million Indonesians seeking health services abroad annually, there is a pressing need for domestic healthcare improvement. While Indonesia has made significant progress in improving public health, including increasing life expectancy and universal health coverage, the COVID-19 pandemic hindered progress. However, the pandemic also facilitated Indonesia’s embrace of healthcare digitalization, with approximately 20 million Indonesians1, (around 7% of the country’s population), engaging in digital health services. This has the potential to attract international investors interested in healthcare advancements, especially through digital solutions like telehealth1. The digitalization of healthcare services is essential for expanding access, although insufficient connectivity remains a barrier across the archipelago.

On the other hand, Indonesia’s pharmaceutical industry, which profited during the pandemic, now faces economic challenges. The performance of pharmaceutical companies is declining due to reduced demand for medications and medical equipment in the post-pandemic period. State-owned companies like PT Indofarma (Q1+Q2 losses of Rp 120.3 billion) and PT Kimia Farma (Q1+Q2 losses of Rp 21.7 billion)2 are struggling with losses and unsold healthcare products. Indofarma delayed debt payments, instead investing more in COVID-19 products and medicines, yet as the pandemic impacts began to slow, their struggle to sell these products was exacerbated, creating a two-fold debt. In contrast, private pharmaceutical companies such as PT Kalbe Farma have seen improved performance post-COVID with profits increasing from Rp 2.73 trillion in 2020 to Rp 3.38 trillion in 20222. Often private pharmaceutical companies face fewer regulatory constraints and higher profitability, giving them greater financial capacity for research and development investments.


In 2022 Indonesia’s chemical and pharmaceutical industry, the largest in Southeast Asia, attracted US$4.5 billion in foreign investment, with expectations of an additional US$3.4 million between 2020-20253. Despite the setbacks caused by COVID-19, the pharmaceutical industry in Indonesia remains a promising sector. The growing demand for pharmaceutical products and healthcare services continues to be a top government priority. Overall, despite the challenges posed by the pandemic, the pharmaceutical industry in Indonesia, both public and private, remains buoyant for foreign investors.

[1] Sadikin, Budi., (2023), “Indonesia is facing up to its need for health care investment”, Nikkei Asia, October 18.  

[2] Tenggara Strategics, (2023), “Analysis: Post-pandemic, pharma SOEs beset with financial problems”, The Jakarta Post, October 25.

[3] Medina, Ayman., (2023), “Indonesia’s Breakthrough Year for Foreign Investment in 2022”, ASEAN Briefing, February 28.


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