Indonesia MedTech firms seek procurement governance improvement
Indonesian medical device industry representatives are calling for a shift in healthcare procurement governance, urging the government to prioritize product quality, patient safety, and domestic manufacturing stability over budget efficiency alone. During the Health Ecosystem Week 2026 at Sebelas Maret University, industry leaders highlighted that current fiscal pressures from central government austerity measures have limited the ability of regional authorities to procure essential medical equipment.
The Indonesian medical device industry has seen significant growth, expanding by approximately 12 percent year-on-year, outpacing the growth of both pharmaceutical manufacturing at 7.5 percent and general healthcare services at 7.6 percent, according to Health Minister Budi Gunadi Sadikin.
Challenges in Procurement and Distribution
Industry stakeholders argue that the existing procurement framework requires continuous evaluation to ensure equitable healthcare access. Kartono Dwidjosewojo, chairman of the Indonesian Medical Devices and Laboratory Companies Association (Gakeslab Indonesia), stated on June 18 that efficient distribution is a critical component of the supply chain, ensuring that devices reach communities in accordance with quality standards.
This push for reform comes as President Prabowo Subianto’s administration continues to implement austerity measures. These include reduced budget transfers to regional governments to prioritize central programs, such as the free nutritious meal initiative. Industry representatives, including Randy H. Teguh of the Indonesian Medical Device Ecosystem Development Association (HIPELKI), noted that while they support tax compliance, the current environment necessitates more balanced governance to allow companies to remain viable while serving the public health sector.
Strengthening Domestic Capabilities
Domestic manufacturers are pushing for policies that foster local self-sufficiency. ASPAKI chairman Imam Subagyo emphasized that developing local raw materials and manufacturing technologies is essential to reduce the nation’s reliance on imported medical products. This perspective is supported by academic research; Fitria Rahmawati, vice rector at Sebelas Maret University, noted that the COVID-19 pandemic revealed healthcare as a strategic pillar of national sovereignty that demands a robust domestic industrial ecosystem.
The tension between central austerity measures and the need for regional medical infrastructure suggests a looming bottleneck in healthcare delivery. If procurement policies are not adjusted to account for the long-term costs of maintenance and calibration—as highlighted by the Association of Indonesian Medical Gas Installers (AIGMI)—the focus on short-term budget efficiency could inadvertently compromise patient safety and the operational lifespan of critical hospital equipment.
What Happens Next
The government is expected to gather more granular data to inform future policy adjustments. Health Minister Budi Gunadi Sadikin announced that the 2026 Economic Census will be used to capture comprehensive data on business activities, investment, and employment within the healthcare sector. Following this data collection, officials may use the findings to refine how regional governments allocate their limited budgets for medical equipment. Furthermore, if the industry successfully advocates for a shift in procurement criteria, future tenders could place a higher weighting on domestic manufacturing status and post-procurement service capabilities, such as equipment maintenance and calibration.
Frequently Asked Questions
Why are medical device businesses calling for changes to procurement?
Industry representatives argue that current purchasing decisions prioritize budget efficiency at the expense of product quality, patient safety, and the long-term sustainability of domestic manufacturers.
How have government austerity measures affected the industry?
The government’s decision to cut transfers to regional governments to fund central programs has narrowed the spending capacity of regional authorities, impacting their ability to procure necessary healthcare services and medical equipment.
What is the government’s plan to address sector growth?
The government plans to use the 2026 Economic Census to gather comprehensive data on healthcare-related industries, including investment and business activities, to better understand and support the sector’s economic contribution.
How might these proposed changes to procurement impact the quality of care in your local community?