Indonesia pharmaceutical excipient market report size, share, growth drivers, trends, opportunities & forecast 2025–2030

Indonesia Pharmaceutical Excipient Market Overview

• The Indonesia Pharmaceutical Excipient Market is valued at USD 110 million, based on a five-year historical analysis. This growth is primarily driven by the increasing demand for pharmaceuticals, particularly following the COVID-19 pandemic, which has heightened the need for effective drug formulations and advanced delivery systems. The rise in healthcare expenditure, the expansion of the pharmaceutical industry, and a growing geriatric population further contribute to market growth. Additionally, the prevalence of chronic diseases and the adoption of innovative excipient technologies are accelerating market expansion.
• Key players in this market are concentrated in major urban centers such as Jakarta, Surabaya, and Bandung. These cities dominate due to their robust healthcare infrastructure, the presence of leading pharmaceutical manufacturers, and access to a skilled workforce. The concentration of research institutions and universities in these areas fosters innovation and development in pharmaceutical excipients, supporting ongoing advancements in drug formulation and delivery.
• In 2023, the Indonesian government implemented a regulation mandating that all pharmaceutical excipients must comply with Good Manufacturing Practices (GMP) to ensure product quality and safety. This regulation is governed by the National Agency of Drug and Food Control (BPOM) under the “BPOM Regulation No. 34 of 2018 on Good Manufacturing Practices for Pharmaceutical Products,” which requires manufacturers to adhere to GMP standards, conduct thorough quality control tests, and register excipients for approval. The regulation aims to enhance the overall standards of pharmaceutical manufacturing in the country, thereby increasing consumer trust and promoting the growth of the excipient market.

Indonesia Pharmaceutical Excipient Market Segmentation

By Type:The market is segmented into various types of excipients, including binders, fillers, disintegrants, coatings, preservatives, emulsifiers, and others. Binders, such as microcrystalline cellulose and lactose monohydrate, are essential for tablet formulation, providing cohesion and mechanical strength. Fillers like starch and dicalcium phosphate are used to increase bulk and ensure dosage uniformity. Disintegrants, including croscarmellose sodium and sodium starch glycolate, facilitate the breakdown of tablets in the digestive system for improved bioavailability. Coatings, preservatives, and emulsifiers play significant roles in enhancing the efficacy, stability, and shelf-life of pharmaceutical products. The market is witnessing a rising preference for natural and multifunctional excipients, reflecting consumer demand for clean label products and improved drug delivery performance.

By End-User:The excipient market serves various end-users, including pharmaceutical manufacturers, contract manufacturing organizations (CMOs), and research institutions. Pharmaceutical manufacturers are the primary consumers, utilizing excipients in drug formulation to enhance stability, bioavailability, and patient compliance. CMOs require a diverse range of excipients to meet the specific needs of their clients, supporting outsourced production and formulation services. Research institutions contribute to the market by developing new formulations and conducting studies on excipient efficacy, driving innovation and quality improvements.

Indonesia Pharmaceutical Excipient Market Competitive Landscape

The Indonesia Pharmaceutical Excipient Market is characterized by a dynamic mix of regional and international players. Leading participants such as PT. Hasil Pangan Mandiri (HPM), PT. Indofarma Tbk, PT. Kimia Farma Tbk, PT. Dexa Medica, PT. Sanbe Farma, PT. Novell Pharmaceutical Laboratories, PT. Merck Sharp & Dohme Pharma, PT. Sido Muncul Tbk, PT. Kalbe Farma Tbk, PT. Soho Global Health, PT. Bio Farma (Persero), PT. Darya-Varia Laboratoria Tbk, PT. Phapros Tbk, Roquette Indonesia, Dow Indonesia, Ashland Indonesia contribute to innovation, geographic expansion, and service delivery in this space.

Indonesia Pharmaceutical Excipient Market Industry Analysis

Growth Drivers

• Increasing Demand for Generic Drugs:The Indonesian pharmaceutical market is witnessing a surge in the demand for generic drugs, driven by a growing population of approximately 270 million. In future, the generic drug market is projected to reach IDR 55 trillion, reflecting a significant increase from IDR 50 trillion in the previous year. This growth is fueled by government initiatives to promote affordable healthcare, leading to a higher consumption of excipients used in generic formulations, thereby boosting the excipient market.
• Growth in the Pharmaceutical Industry:Indonesia's pharmaceutical industry is expected to grow at a rate of 10% annually, reaching IDR 110 trillion in future. This expansion is attributed to increased healthcare access and a rising middle class, which is projected to reach 150 million in future. As the industry grows, the demand for pharmaceutical excipients, essential for drug formulation, will also rise, creating a robust market environment for excipient manufacturers.
• Rising Healthcare Expenditure:Indonesia's healthcare expenditure is anticipated to reach IDR 320 trillion in future, up from IDR 300 trillion in the previous year. This increase is driven by government reforms aimed at improving healthcare services and expanding insurance coverage. As healthcare spending rises, pharmaceutical companies are likely to invest more in excipients to enhance drug efficacy and safety, further propelling the excipient market's growth in the region.

Market Challenges

• Regulatory Compliance Issues:The Indonesian pharmaceutical excipient market faces significant regulatory compliance challenges, with over 200 regulations governing excipient production and usage. Companies must navigate complex approval processes, which can delay product launches and increase operational costs. In future, it is estimated that compliance costs could account for up to 15% of total production expenses, hindering market growth and innovation.
• High Production Costs:The production costs for pharmaceutical excipients in Indonesia are rising, with raw material prices increasing by 12% in future. This trend is exacerbated by supply chain disruptions and inflationary pressures, leading to higher operational costs for manufacturers. Consequently, many companies may struggle to maintain competitive pricing, which could limit their market share and profitability in the excipient sector.

Indonesia Pharmaceutical Excipient Market Future Outlook

The future of the Indonesian pharmaceutical excipient market appears promising, driven by increasing investments in research and development, which are projected to reach IDR 18 trillion in future. Additionally, the expansion of biopharmaceuticals is expected to create new opportunities for excipient manufacturers, as the demand for specialized excipients rises. Furthermore, the trend towards sustainable and natural excipients will likely gain momentum, aligning with global environmental standards and consumer preferences for eco-friendly products.

Market Opportunities

• Expansion of Biopharmaceuticals:The biopharmaceutical sector in Indonesia is projected to grow to IDR 22 trillion in future, creating significant demand for specialized excipients. This growth presents an opportunity for manufacturers to innovate and develop excipients tailored for biopharmaceutical applications, enhancing their market position and profitability.
• Increasing Investment in R&D:With R&D investments expected to increase by 25% in future, pharmaceutical companies are likely to seek advanced excipients that improve drug delivery and efficacy. This trend offers excipient manufacturers a chance to collaborate with pharmaceutical firms, driving innovation and expanding their product offerings in the market.