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Jakarta Post

Omnibus bill relaxes drug patent rule to boost pharma innovation

  • Esther Samboh and Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Tue, February 18, 2020   /   01:55 pm
Omnibus bill relaxes drug patent rule to boost pharma innovation Stock imagery of glass vials. The government has eliminated an article in the omnibus bill on job creation that required drug patents to be registered in Indonesia, which had hampered pharmaceutical innovation. (Shutterstock/Vinogradov Illya)

The government is planning to relax rules on drug patents in the omnibus bill on job creation to boost the nation's pharmaceutical industry and encourage patent-sharing, a top minister has said.

Coordinating Economic Minister Airlangga Hartarto said that current legislation obliged companies to register their patents in Indonesia in hopes of driving the local pharmaceutical industry, but that the industry had not grown as expected. Instead, the patent rule created difficulties for the industry in providing the needed medication during a health emergency.

“We are pushing [so] companies do not have to register their patents in Indonesia,” Airlangga said on Monday evening during a media briefing in Jakarta.

Allowing pharmaceutical companies to apply for patents abroad might expedite patent sharing for developing the needed vaccine or antiviral during an outbreak, such as the ongoing COVID-19 outbreak, he said.

Read also: Indonesia to get new business license regime with omnibus bill

Article 20 of the Patent Law stipulates that the patent holder must manufacture its products or process them in Indonesia, which would require technology transfers, investment and/or creating new jobs.

The article has been deleted in the omnibus bill on job creation. Instead, the bill stipulates that pharmaceutical companies only need to obtain licenses from the government for operating their business and developing medicines and medical devices.

The government is authorized to revoke the licenses if a company's drugs and medical devices do not meet standards, with further provisions to be regulated in government regulations (PP).

Meanwhile, Law No. 36/2009 on health states that medical supplies may be distributed only after a distribution license is granted and  must adhere to distribution objectives.

“The government hopes to strengthen the pharmaceutical industry’s contributions to the country through import-substituting products,” said Airlangga.