Indonesia to Get ASEAN Free Trade Deal Boost

Echoing government sources, Indonesian drugmaker Dexa Medica has claimed that the ASEAN free trade agreement, due to be implemented at the end of 2008, will significantly expand the country's drug market and pharmaceuticals exports. The company, which has a manufacturing agreement with leading state-held producer Indofarma, also claims that government moves to provide subsidised access to healthcare for poorer families could also grow the market in the longer term.

According to official data, Indonesia exports roughly US$30mn per year worth of drugs to the ASEAN region, a drug market worth some US$5bn. However, official estimates are likely to be conservative, as modernising local drugmakers have recently gained good manufacturing practices certification, and the export sector is more likely to be worth US$100mn.

Nevertheless, this total belies the market's potential, although industry sources caution that the widely expected merger and privatisation of state-held companies will be necessary to overcome the local industry's structural challenges and reduce import dependency in the coming years.