The Missing Link in Indonesia’s Clinical Trial Ambition

Indonesia has set its sights on becoming a regional hub for clinical trials. The ambition is both legitimate and long overdue. With the world’s fourth-largest population, a complex and evolving disease burden, and a national health insurance system (Jaminan Kesehatan Nasional) that now reaches nearly 270 million people, the country should be a natural destination for global research.

Yet it is not.

The gap is not one of capability. It is one of alignment.

Indonesia is often described as Southeast Asia’s largest pharmaceutical market, with estimates in the range of USD 9–10 billion. But headline figures obscure more than they reveal. Much of that spending is concentrated in low-cost generics procured through JKN. The system has expanded access at scale, but in doing so has narrowed the commercial space for innovative therapies.

For companies investing in research and development, market size alone is not decisive. What matters is whether innovation is adopted, reimbursed, and ultimately reaches patients. By that measure, Indonesia appears far smaller than its population would suggest. Of the innovative medicines launched globally over the past decade, only around 9% are available in the country, placing it among the lowest in the region.

That disconnect matters. Clinical trials do not flow to opportunity alone. They follow incentives.

For sponsors, the logic is straightforward: trials tend to be placed where regulatory pathways are clear, operations are feasible and, critically, there is a credible route to patient access once development is complete. The question is simple: if a therapy is tested here, will it be used here?

In Indonesia, the answer remains uncertain.

This is not due to a lack of intent. The reimbursement framework reflects legitimate priorities: cost control, equity, and the long-term sustainability of universal coverage. But the way these priorities are applied sends mixed signals. A persistent view holds that innovation sits uneasily alongside universal coverage, and is therefore pushed into an already narrow private, out-of-pocket segment.

The Health Technology Assessment (HTA) process, while still evolving, is widely seen as restrictive in its treatment of innovative therapies. Combined with limited inclusion in the national formulary, local content requirements, and a procurement system centred on domestic generics, the result is a market where new treatments rarely move beyond limited, out-of-pocket use. The number of innovative or life-extending therapies included in the national formulary (e-FORNAS) in the last ten years remains small enough to count on one hand.

For companies, the implication is difficult to ignore. Innovation may be encouraged in principle, but access in practice remains uncertain. Roughly half of multinational companies have divested manufacturing sites and scaled back operations. Others delay or reconsider product launches, often to the frustration of policymakers.

A similar tension is visible in industrial policy. Indonesia’s push to strengthen domestic pharmaceutical manufacturing is understandable, particularly given its reliance on imported raw materials. But policies that coerce local production, and at times complicate imports, sit uneasily alongside efforts to attract global research and development.

The issue is less the direction of policy than the lack of coordination between its parts. On one hand, Indonesia signals that it wants to participate in global clinical research. On the other, it maintains a market environment in which the outcomes of that research face significant barriers to adoption.

Other countries in the region have approached this differently. Singapore and South Korea, neither of which can rely on scale alone, have built strong positions in clinical research by prioritising consistency. Regulatory timelines are predictable. The link between clinical development and reimbursement is clearer. Innovation is treated as part of the health system, not an exception to it.

In these settings, clinical trials are not a standalone ambition. They are embedded in a broader ecosystem that connects research, regulation, and patient access.

Indonesia has yet to fully make that connection.

What is at stake goes beyond industry participation. Countries that host clinical trials tend to gain earlier access to new therapies, stronger clinical networks, and deeper integration into global research efforts. Those that do not risk remaining end-markets, importing innovation later, at higher cost, and with limited influence over how it is developed.

For a country of Indonesia’s scale, that is a meaningful trade-off.

Closing the gap does not require a wholesale redesign of the system. It requires clearer alignment.

That begins with defining the place of innovation within universal coverage. New therapies do not need to sit outside JKN, but their role within it must be more clearly articulated. The Health Technology Assessment process should continue to evolve toward a more balanced and predictable evaluation of value. Clinical trial participation should be more directly linked to pathways for access, so that development is not disconnected from eventual use. And industrial and health policies must be calibrated to reinforce, rather than undermine, one another.

Indonesia’s challenge is not a lack of ambition. It is the signals it sends.

Clinical research gravitates toward environments where policy, regulation, and market access move in the same direction. In Indonesia, those signals remain out of sync.

Until they converge, ambition will continue to outpace reality.