A.

Legal Basis

a. Regulation of the Head of the National Drug and Food Control Agency No. 12 of 2015 on
Controlling Food and Drug Imports into the Territory of the Republic of Indonesia as
amended by BPOM Regulation No. 25 of 2016 (“BPOM Reg 12/2015”);
b. BPOM Regulation No HK.03.1.23.10.11.08481 of 2011 on The Criteria and Procedures
for the Registration of Medicines as amended by BPOM Regulation No. 3 of 2013 on
Amendments to BPOM Reg No HK.03.1.23.10.11.08481 of 2011 (“BPOM Reg
3/2013”);
c. BPOM Regulation No. HK.03.1.34.11.12.7542 of 2012 on Technical Guidelines for
Proper Medicine Distribution Methods (“BPOM Reg 3/2012”)

B. Analysis

B.1. Definition

a. A Pharmaceutical Manufacturer means a business entity engaged in drug or drug material

production activities which has obtained a license from the Minister of Health.
b. An Import Certificate, referred to as an “SKI”, means an approval letter for importing Drugs
and Foods into the territory of the Republic of Indonesia to accelerate the flow of goods for
Customs clearance and cargo release according to the Indonesian National Single Window.
c. A Distribution License means approval for the registration of Drugs and Foods issued by the
Head of the National Drug and Food Control Agency (”BPOM”) to be distributed in the
territory of the Republic of Indonesia
d. The Technical Guidelines for Proper Medicine Distribution Methods referred to as “CDOB”,
means distribution of drugs and/or drugs materials methods to ensure the quality during the
distribution process according to its requirements and is for the purpose of their use.
e. A Distribution License Holder means that the Registration Applicant has obtained approval
for a distribution license for the registered drugs.

B.2. Supervision of Drugs Imported into the Territory of the Republic of Indonesia

The drugs distributed in the territory of the Republic of Indonesia should be drugs for
which a Distribution License or Izin Edar has been obtained and the prevailing laws and
regulations on Imports have been complied with. In addition, they require an SKI as approval
from the Head of BPOM before an application for a Distribution License is submitted.
Drugs may only be imported by a Distribution License holder or its proxy. Drugs may be
imported by a Pharmaceutical Manufacturer which also holds a Distribution License. Also,
distributor can appoint another Pharmaceutical Manufacturer or Pharmaceutical Wholesaler to
import drugs. However, a Distribution License holder remains responsible for drugs imported by
its proxy. The following are the requirements for a drug Distribution License:

a. the drugs’ benefits and adequate security have been proven by either non-clinical or clinical
testing;
b. reliable evidence can be provided that the production process guidelines under the Proper
Medicine Production Methods (“CPOB”), specifications and material analysis methods and
processed drugs (final product) requirements have been complied with;
c. Having a drugs label and complete information, which is objective and not misleading and
can rationally and appropriately secure the use of the drugs;
d. they meet human needs.
The following are the Drugs Registration categories:

a. Domestically produced drugs

Domestically produced drugs may be registered as self-production drugs, drugs produced under
license or under contract.

b. Imported drugs

Imported drugs to be registered must be accompanied by proof that they cannot be produced in
Indonesia and they must be registered by the Registration Applicant who holds written approval
from the Pharmaceuticals Manufacturer abroad. The Pharmaceuticals Manufacturer abroad
must hold a Business License or Pharmaceuticals License and satisfy the CPOB requirements
as proven by a CPOB Certificate or other equivalent document and the data from the latest
inspection within the last 2 (two) years issued by a Drug Control Agency abroad.

The Registration Applicant is responsible for the completeness, truth and legality of the
information provided in the registration documents including any change to the data or product
information provided for processing the registration. For this, the written statement referred to in
Schedule XI of the BPOM Regulation on the Registration of Drugs must be submitted. If
necessary, the Head of BPOM will require the Registration Applicant to provide samples of the
drugs or drug materials. In addition, BPOM may conduct an investigation to check the legality of
the information in the registration documents in drug producer premises (in-situ investigation).

B.3. Drug Distribution Arrangements

The Registration Applicant must produce or import and distribute the drugs for which it has
obtained a Distribution License within 1 (one) year of the issuance of the approval. The
Registration Applicant must report on its organization by submitting the packaging of the drugs
which are ready to be distributed to the Head of BPOM.

Under the BPOM Regulation, a Pharmaceutical Wholesaler must apply the Technical
Guidelines on Proper Medicine Distribution Methods in the arrangement of its distribution of the
drugs. BPOM may cancel its CDOB Certificate in the event of any violation of the CDOB’s
implementation which causes the distribution of drugs to be misused or any act is deliberately
committed which causes the CDOB’s implementation not to be performed.

The BPOM Regulation governs complaints about drugs and/or drug materials alleging that they
are counterfeit. If drugs and/or drug materials are to be resold, it must be approved by the
authorized personnel. Cooperation with an institution, Pharmaceutical Manufacturer or
Distribution Facility is required to handle drugs and/or drug materials which are allegedly
counterfeit. The Schedule of BPOM Regulation No. 3/2012 requires there to be a written
procedure for managing drugs and/or drug materials which are alleged to be counterfeit. The
distribution facility must stop and immediately report any drugs and/or drug materials alleged to
be counterfeit to the authorized institution, Pharmaceuticals Manufacturer and/or Distributor’s
License holder.
B.4. Sanctions

The following are the progressive administrative sanctions which the Head of BPOM will impose
on the Registration Applicant for providing false information in the registration documents, for
not producing or importing and distributing the drugs within 1 (one) year of the issuance of their
approval, or for committing a violation in the drug production and/or distribution sector:

a. a written warnings; followed by,

b. suspension of the drug registration process;
c. suspension of the Distribution License;
d. the revocation of the Distribution License;
e. other administrative sanctions available under the prevailing laws and regulations.

C. CONCLUSION

To distribute drugs in the Republic of Indonesia, a SKI and a Drug Distribution License are
required. Drugs which are alleged to be counterfeit can be reported to the authorized institution
or Pharmaceuticals Manufacturer or Distributor License holder.