STRATEGIC INNOVATION IN A COMPETITIVE AND HIGHLY REGULATED SECTOR: CASE STUDY OF INDONESIAN PHARMACEUTICAL COMPANIES

• Main Author: Roro Shafira Meisy S, Raden
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/70058
• Institution: Institut Teknologi Bandung

Pharmaceutical is part of five strategic sectors to achieve the “Making Indonesia 4.0” aspirations. The program urges local pharmaceutical companies to innovate and act as an enabler to decrease dependency on imported healthcare products. Previous studies show that there are many barriers to innovation, making Indonesia only partially ready to conduct drug development. The pharmaceutical industry is heavily influenced by market conditions and regulations and is dependent on its internal resources and capabilities. It was found that elements involved in the industry dynamics as well as firm characteristics influence innovation, thus making both internal and external environments important during strategic analysis. The resource-based view and industry organization theories were used to conceptualize and develop the framework. Academic debates concerning how the two approaches are separated are found to be only on theoretical level. Additionally, this study also investigates whether a firm’s ownership type influences its innovation practices and management practices to compete in the Indonesian pharmaceutical unique market. The findings show that foreign-owned companies operating in Indonesia are more focused on increasing their market access. Meanwhile, domestic-owned and state-owned companies are inclined to develop, produce, and distribute generic drugs with price- differentiation strategy focusing on the universal health coverage (UHC) fulfilment.