The global COVID-19 pandemic has gravely affect the world’s economy, including that of Indonesia. Despite the biggest decline in economic growth since the Great Depression during the 1930s, the recent disruptions have their “winners” from a business point of view. The medical industry is one of them and Indonesia, which heavily relies on the import of medical devices, is a potentially highly lucrative market.
Medical devices are instruments (e.g. surgical mask), machines or implants, which do not contain drugs and are used for one or more of the following: [1]
• prevent, diagnose, cure, relieve diseases;
• treat sick people;
• aid people in health recovery; and
• form the structure or correct body functions.
In the following, we will shed light on this profitable industry and, in particular, explain what steps you must take to distribute your medical devices in Indonesia. It is a somewhat lengthy process, but as we explain towards the end of this article, Schinder Law Firm can connect you with local partners so that you can shortcut the entire process and start distributing your medical devices almost immediately.
The steps to sell medical devices in Indonesia
Step 1: set up your company in Indonesia
You must first set up your Foreign invested company (PT PMA) in Indonesia. Distributing medical devices through a Representative Office is not possible because it is a money-generating activity.
Step 2: obtain a Medical Devices Distribution License
Anyone wishing to sell medical devices in Indonesia must first obtain the Medical Device Distribution License (IPAK). [2] The process regarding the registration of medical devices is currently done via an online portal, which is hosted by the Department of Pharmaceuticals and Medical Devices of the Ministry of Health.
Although the online portal makes it easier for foreign companies to apply for the license, applicants need to be aware that there is a lot of paperwork involved. This includes being able to provide evidence of
• the applicant’s company business number (NIB);
• having a Technical person in charge (Penanggung Jawab Teknis) with academic background;
• having sufficient facilities for administration and storage, either owned or rented with a minimum duration of the lease agreement for two years at the time of application
• having a service workshop or an existing cooperation for servicing with another company for after sales services for the company if the product required for it,
• complying with Good Distribution Medical Equipment Standard ( CDAKB)
Step 3: register your medical device products
Any medical devices to be sold in Indonesia must be registered with the Department of Pharmaceuticals and Medical Devices of the Ministry of Health. At this stage, the Ministry of Health will conduct an evaluation and verification of safety, quality, and efficacy. In case there are no concerns in the evaluation process, the Ministry of Health will issue a product distribution number. However, even registered products are not entitled to enter the Indonesian market unless they are granted the Distribution License for Medical Devices / IPAK.
Medical devices are classified into four categories. The category ultimately defines the procedure for application, the necessary steps and documents to be provided. The basis for the classification system is the ASEAN Medical Device Directive. [3]
Class | Risk Level |
A | Low Risk |
B | Low – Moderate risk |
C | Moderate – High Risk |
D | High Risk |
Duration of completing steps 1-3
If a foreign investor truly starts from scratch and follows steps 1-3, such investor must expect a minimum duration of around five months. The setting up of a PT PMA itself will take several weeks and obtaining the necessary licenses, especially in the current environment, will take several weeks also.
How Schinder Law Firm can help
The paperwork related to the IPAK application can be challenging, it requires in-depth knowledge of the processes as well as good contacts with the relevant authorities.
Schinder Law Firm possesses vast experience in assisting foreign and local clients in obtaining their IPAK.
Schinder Law Firm can also assist you in connecting you with a local partner so that you do not need to go through the entire process of setting up a business and obtaining the license. This will allow you to enter the lucrative medical devices market immediately.
