Indonesia Planning to Relax Drug Patent Rules to Boost Domestic Pharmaceutical Industry

Mar 2020

The Indonesian federal government is planning to relax standards on drug patents with an omnibus bill on job creation to support the country’s pharmaceutical manufacturers and encourage patent-sharing. The government aims to strengthen the domestic sector’s contributions to the economy by reducing its dependence on imports and foreign patents.

Current legislation obliges companies to register their patents in Indonesia in hopes of driving the local pharmaceutical industry. It has not resulted in the expected growth for domestic producers. Instead, the patent rule has created difficulties for the industry to deliver needed medication during health emergencies, according to Coordinating Economic Minister Airlangga Hartarto.

Article 20 of the current Patent Law also stipulates that the patent holder must manufacture its products or process them in Indonesia, which requires technology transfers, investment and/or creating new jobs. This article has been deleted in the omnibus bill, which will instead require pharmaceutical corporations to obtain licenses from the government to operate and to develop medicines and Medical devices. The government will be authorized to revoke the licenses if a producer’s drugs and Medical devices do not meet standards, with further provisions to be regulated in government regulations (PP).

Enabling pharmaceutical companies to apply for patents abroad might boost patent sharing relating to the development of vaccines or antiviral drugs during an outbreak, such as the ongoing COVID-19 outbreak.

(Source: The Jakarta Post)

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