NEW BUSINESS STRATEGY FOR PT KALBE FARMA TBK TO BECOME THE MARKET LEADER IN THE PSYCHIATRY SECTOR IN INDONESIA

• Main Author: Erwin
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/70670
• Institution: Institut Teknologi Bandung

The prevalence of people with mental disorders in Indonesia continues to increase and its growth has been accelerated by the COVID-19 pandemic. In addition, public awareness of mental health has increased considerably due to this issue being widely discussed on social media. Applications to support mental health from various start-ups are also starting to emerge. The increase in these phenomena is also extrapolated to the market for psychiatric drugs in Indonesia which has grown by ten percent from 2018 to 2019 and 2019 to 2020. Based on the competitive landscape, there are around 50 pharmaceutical companies marketing psychiatric drugs in Indonesia. However, the 12 companies with the highest sales already account for 80% market share of the psychiatric drug market. This market is dominated by one market leader while other players including PT Kalbe Farma Tbk. have a relatively small market share compared to the market leader. Seeing the psychiatric drug market condition that continues to grow and its market share is still small, Kalbe must have a new business strategy to seize this opportunity and become one of the market leaders in the psychiatric drug market in Indonesia. This research was conducted to determine the main external and internal factors that affect Kalbe’s psychiatric drug business and then provide alternative business strategies for Kalbe to become one of the market leaders in the psychiatric market. In this study, interviews were conducted with 20 stakeholders of Kalbe, which are Kalbe employees, competitor employees, psychiatrists and patients with mental disorders. In addition, questionnaires were distributed to 55 patients with mental disorders. Data from interviews and questionnaires were then analyzed using content analysis. Pharmaceutical market data from IQVIA was used in this study and analyzed using the BCG matrix. Furthermore, alternative business strategies formulation is done using the TOWS matrix. The results of the content analysis show that the main external factors affecting the psychiatry business are categorized into legal, political, economic, market, technological and social aspects. Drug abuse, strict control by authorities, government’s KPI, National Social Security System, National Formulary, e- catalogue, local content level regulation and halal certification all affect the psychiatric drug business from a legal perspective. The war between Russia and Ukraine as well as political tensions in Indonesia have had a political impact. Economic factors affecting the psychiatric drug business include drug prices, exchange rates, purchasing power and recession. Factors influencing the psychiatric business from a market perspective include market growth, market opportunities, market shifts to generic segments, low competition and strong market leader. Social media, e-commerce, telemedicine and new drug delivery technologies are influential aspects of technology. Lastly, there is stigma, elderly population, fear of addiction, age group of patients shifting to young adults, cultural and beliefs influences are social aspects that affect psychiatry business in Indonesia. Meanwhile, the key internal factors are categorized into brand, corporate culture, human assets and intellectual capital, organizational resources, originality, physical resources and relationships. Kalbe’s psychiatric drug business position in the BCG matrix is in the Question Mark quadrant due to its small market share while the market is still growing well. Therefore, Kalbe needs to carry out an intensive strategy to increase its market share through product development, market penetration and market development. Based on the results of data analysis, the product development strategy that can be implemented is to complete the psychiatric product portfolio for both the branded and generic drug segments. The proposed product areas to be developed are antipsychotics, anxiolytics, antidepressants and mood stabilizers, hypnotics and sedatives as well as psychostimulants. Products for the branded segment are suggested to be original products or products with new drug delivery technology. Meanwhile, it is suggested that products for the generic segment are products with a high Drug Needs Plan number and have the potential to become the first generic product so that they can monopolize the government’s tender market for these molecules. The proposed market penetration strategy is to form a focus team in both product management and sales to work on and educate users for the private segment. For the public segment, Kalbe must strengthen its key account management team who will build relationships with relevant government agencies. Another segment that has been growing quite a bit recently is telemedicine. Kalbe can work together with the telemedicine application so that its psychiatric products can be prescribed there. Kalbe also needs to ensure the availability of its psychiatric products throughout Indonesia. Lastly, a market development strategy can be implemented to reposition existing neurology products for psychiatric indications. In addition, Kalbe is also advised to conduct public education to increase public awareness through collaboration with the government, social media accounts related to mental health and mental health care communities.