Indonesia Medical Device e-Catalogue Enrollment: 2018 Debrief

Access to the public hospital on-line procurement system, e-Catalogue, is an important part of a successful sales strategy in Indonesia for most medical and diagnostic devices. At the same time, navigation of the enrollment process is a challenge for many manufacturers and distributors. To be positioned for successful e-Catalogue listings, it is important to understand the submission process and to anticipate expected changes for 2019.

The e-Catalogue system in Indonesia is managed by the LKPP (The Government Agency for Procurement of Goods & Services).

Application Deadlines

On March 26th the LKPP released the enrollment schedule for 2018 with the deadline for application submission set at April 20th. Applicants had just 20 working days to prepare. Successful applicants were notified on April 30th.  Price negotiation meetings were to be completed by May 4th, but due to high application volumes the deadline has been extended through December 2018. This was a much-accelerated schedule compared to previous years.

Eligible Products List

At the same time three, separate lists were published identifying 613 categories of eligible devices. Enrollment eligibility has varied over the years from first-in-first-out open enrollment from 2014 to 2016; to periodic by-invitation-only from 2016 to 2017; to the current mass enrollment one-time per year established in 2018.

Required Documents

The list of documents required for the e-Catalogue application for medical devices has changed several times making advanced preparation difficult. (The latest version is the LKPP 5th schedule published on June 7, 2018.) Verification of application documentation is very strict, and many applications have been rejected for non-compliance. Particularly challenging is getting authentication of the Distributor Appointment Letter (Surat Tanda Pendaftaran, or STP) by the Ministry of Trade at the Indonesia Consulate in country of origin due to processing time requirements.

Pricing

Price negotiations seem to be restricted to between 20% and 40% of the Landed Cost of a device (inclusive of CIF charges). The range depends on effective justification of the support effort and costs. Sufficient time should be budgeted for e-Catalogue pricing strategy consideration and negotiations preparation.

2019 Enrollment

In 2019 significant changes are expected for e-Catalogue enrollment for medical and diagnostic devices with management being shifted from the LKPP to the Ministry of Health. The next intake is expected in July 2019 with what may be open enrollment for all product categories. Distributor markup is anticipated to be fixed at 1.4 times Landed Cost.

Manufacturers should begin now to register devices of interest for e-Catalogue listing choosing their local Indonesia Agent carefully. It is important to prepare applications early according to current requirements and stay vigilant any additional changes.

Asia Actual‘s experienced staff in Jakarta is available to respond to questions and support requests.

Indonesia Tightens Enforcement of Medical Device Licensing

With the implementation of Regulation No. 60, 2017 on February 1st, 2018 the Indonesia government tightened enforcement of medical device licensing requirements.

Formerly, compliance for imported medical devices was confirmed during the customs clearance process by Customs and Excise Department officials. Now the Ministry of Health is authorized to extend confirmation through inspection at medical device distributors (AKA, Post-Border monitoring).

Any devices without proper licensing may result in re-exportation or destruction at the importers expense. Further, distributors in possession of improperly licensed devices may have their Distribution License suspended.  The move is expected to increase compliance with the medical device registration requirements.

Indonesia the Next to Takes Steps Toward ASEAN MDD Harmonization

On January 13, 2018 the Indonesia Ministry of Health implemented Permenkes No. 62, 2017, Marketing Authorization of Medical Devices, IVD Devices and Household Goods. This is the first major overhaul of medical device regulations in seven year (replacing Permenkes No. 1190, 2010) with the intent to improve efficiency, harmonize with ASEAN MDD standards, and align with updates to Indonesian legal and import regulations.

Important provisions include: 

  1. device definitions harmonized with ASEAN MDD
  2. device classification harmonized with ASEAN MDD
  3. technical data formatting harmonized with ASEAN MDD (CDST)
  4. application review times for medical device registration cut in half (15 days for Class A, 30 days for Class B and C and 45 days for Class D) for import goods
  5. implementation of E-reporting systems for distribution records and complaint handling through E-Watch systems
  6. clear requirements for post market vigilance

Implementation of the new Rules has been rather smooth with new faster review timelines largely being met. Indonesia is the third country to implement the ASEAN MDD standards after Singapore and Malaysia, with the Philippines announcing plans for implementation in early 2019.

Indonesia Publishes Guidelines for Clinical Trail Approvals for Medical and Diagnostic Devices

The Ministry of Health has outlined requirements for clinical trials conducted in Indonesia in Regulation No. 63, 2017 published on December 28, 2017.

Included are details on the required elements of a clinical trial application, and description of the application review process conducted by a Ministry of Health appointed Health Research Ethics Committee.  The local clinical trial standards, CUKAKB “Cara Uji Klinis Alat Kesehatan yang Baik”, are based on ISO 14155.

The new Rules are viewed as preparation for increasing the requirement for local clinical trial data for high risk Class C/D and novel medical devices registration applications in Indonesia.

Indonesia Ministry Opened e-Catalogue Registration for Certain Medical Devices

The Ministry of Health recently open e-Catalogue registration to 242 types of devices in 17 categories.  License holders of these devices were given three weeks to submit applications with a July 14th deadline.  A copy of the Ministry announcement (in Bahasa Indonesia) is available on the Indonesia page of the Asia Actual web site.

After slow initial adoption, participation in the e-Catalogue procurement system is now understood to be highly advantageous to public hospitals sales in Indonesia. As a result, enrollment applications have overwhelmed the Ministry of Health’s processing capacity.

Initially, The Ministry of Health processed applications on a first-come-first-served basis.  Wait times under this approach steadily increased from 3 months to 6 months or longer.  Applicants were limited to 10 devices per session.  More recently, the Ministry had stopped accepting enrollment applications for medical devices all together.

This new action signals a change in approach to call for blocks of devices at one time.  There was no limit to the number of device applications submitted per license holder.  It is expected that the Ministry will call for a new block of devices in the coming months.

Medical device manufacturers are advised to work with their Indonesia license holder to prepare enrollment applications in anticipation of their device category being called in the next session.

Indonesia’s e-Catalogue System Overview

An important, new consideration to sales success in Indonesia is the e-Catalogue listing. This on-line procurement system was established to bring transparency and prevent corruption in government purchases, including public hospitals, as administered by the Indonesian Government Goods and Services Procurement Organization (LKPP).

Although initiated in 2013, it took parties some time to understand the implication on sales. At first, companies seemed weary to participate in the voluntary system. Those that did enjoyed strong sales results and so now there is a rush for all to be listed.

​After an Import License for a device is issued, the License Holder can apply to the Ministry of Health for an e-Catalogue listing meeting at which the listing price will be negotiated. A required element for the meeting is a commercial invoice from at least one device shipment to Indonesia. Price negotiations are for a percentage mark-up from the invoiced landed cost typically between 25% to 35%. There is no government application fee for the application process, but the queue can be 6 months or longer for the price negotiation meeting.

Implementing an optimal pricing strategy will be critical to successful public hospital sales. ​The e-Catalogue system also increases the importance of independent license holding in Indonesia because there is little room for regional dealer margin under the price scheme.

​Asia Actual works closely with clients to optimize pricing and obtain the fastest e-Catalogue listing for your devices.

4 Product Development Decisions that Impact Sales Performance in Asia

<insert image>

US medical device manufacturers typically launch new products in Asia only after establishing success in the US and Europe. However, decisions made in the product development process have significant impact on regulatory costs, time to market and ultimately sales results in Asia. Address these four points to ensure fastest time-to-revenue in Asian markets.

Incorporate Asian Requirements into Product Testing
Conformance testing certificates are a common element of medical device registration applications. In most Asian regulatory systems, test reports used for US and European device registration are sufficient, with notable exceptions. South Korea and other markets require CB Scheme certification for electrical safety testing certificates. Further, testing records should be generated based on a country’s electrical supply (e.g., 220V/60Hz and/or 380V/60Hz). In Indonesia, Certificates of Analysis require numeric test values as well as a pass/fail designation. In China, in addition to having a complete set of test certificates to international standards, registration of Class II and III devices will require test certificates generated from one of ten local CFDA-certified test laboratories.

Design Your Clinical Trial to include Asian Requirements
If you must conduct a clinical trial in support of FDA Approval or CE Marking, confirm the data generated will also be acceptable for device registration in Asia. The Pharmaceutical and Medical Devices Agency in Japan offers a Clinical Trial Consultation just for this purpose. You may also consider the Harmonization by Doing program in Japan, which is designed to reduce the cost and time to register novel devices significantly by shifting 25% of your patient sample from a US clinical trial to Japan. The CSCSO in India will generally accept clinical data from outside India (except for drug-eluting stents, etc.), but may want to see ethnicity data. Again, Chinese registration of Class II and III devices will require a limited local clinical trial data.

Select a Fully Recognized Notified Body
Pick an ISO 13485 Registrar and CE Mark Notified Body that is recognized by competent authorities in Asia to avoid redundant QMS inspections and product conformity assessment fees. The Australian government has a mutual recognition treaty with the European Union whereby medical devices with CE Mark avoid local conformity assessment, greatly accelerating market listing in Australia. However, the Australian government has begun to deny recognition of certain Notified Bodies. In Japan, if your device qualifies for Pre-Market Certification (most Class II and some Class III devices), conformity assessment will be performed by a private Registered Certification Body. Seven of the fourteen RCBs also provide CE Mark in Europe. In Korea, a similar situation applies to most Class II devices. In Malaysia’s new and evolving regulatory system, all devices must undergo local conformity assessment, though the assessment for devices with reference country approval is greatly expedited. In these cases, manufacturers may request synergies if their Notified Body is also their RCB in Japan or Third Party Reviewer in Malaysia and South Korea.

Budget to Control Your Registration Certificate in Asia
In the US, Europe and Canada, the manufacturer on the labeling is considered the owner of the product registration certificate. In all other regulatory systems, the license/certificate/listing is owned or fully controlled by a local agent. In these markets, foreign manufacturers can only change or add distributors with the cooperation of the incumbent license holder. If the license is held by a commercial distribution partner, it is difficult to add, change or influence distributors in that market. Also, start-up companies with acquisition strategies have added incentive to control registration certificates to enhance acquisition value and enable the acquiring company to integrate new device/s into its direct sales channel. This situation can only be assured through an independent license holder.

Consult with Asia Actual for specific conditions that apply to your devices in Asia.

Medical Device Sales in Asia

29 countries in the Asia Pacific sales region do not have a national medical device regulatory review system.

Asia Pacific Sales Region – Medical Device Registration Systems:
44 countries
3.74B people
$31B device market
29 countries without regulatory review systems
15 countries with regulatory systems
9 countries with reference country approval requirements
Note: hospital purchasing managers in these countries may require products to have home or reference country approval.