STRENGTHENING INDONESIA’S PHARMACEUTICAL SUPPLY CHAIN: AN INSTITUTIONAL THEORY PERSPECTIVE ON THE CHANGE SOURCE POLICY

• Main Author: Nurfauzia, Amanda
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/87236
• Institution: Institut Teknologi Bandung

Indonesia's pharmaceutical industry is vital to national health and economic development but remains over 90% reliant on imported Active Pharmaceutical Ingredients (APIs), making it vulnerable to supply chain disruptions, a vulnerability highlighted during the COVID-19 pandemic. To address this issue, the government introduced the Change Source Policy to promote the use of locally produced APIs. This research examines the policy's implementation and impacts through the lens of institutional theory, focusing on the interactions of API manufacturers, importers, drug formulation companies, healthcare facilities, regulatory bodies, and testing laboratories. Using a qualitative approach, data was collected through indepth interviews and analyzed using thematic and narrative methods. Tools such as problematic linkage matrices and rich pictures were employed to map the complex relationships and institutional challenges faced by stakeholders. The policy offers opportunities for local API manufacturers, such as increased demand, government incentives, and support for innovation. However, they face challenges like high investment costs, limited infrastructure, and competition with imported APIs. Importers see reduced demand and market share, while drug companies struggle with the costs of bioequivalence testing and regulatory compliance. Healthcare facilities face audit risks and higher procurement costs as locally sourced APIs are often less competitive in price and quality. Regulatory agencies and testing labs deal with increased workloads, insufficient infrastructure, and limited collaboration. The research recommends strengthening institutions through extended certification timelines, simplified regulations, increased testing infrastructure, enhanced R&D, and improved cross-sector collaboration. Market guarantees, including stricter import controls and incentives for local APIs, are vital for enhancing trust and strengthening resilience in the domestic pharmaceutical supply chain.