“However, while most other pharmacy businesses are limited or closed to foreign ownership, wholesale pharmacy is a bit unique.”
Scope of Activity and Foreign Capital Limit
According to Minister of Health Regulation No. 26 of 2018, the scope of activity of wholesale pharmacy includes procurement, storage, and distribution of drugs and/or drugs materials in large quantity. Business sectors in Indonesia has a specific foreign capital ownership limitation or also commonly known as Negative Investment List, wholesale pharmacy is not an exception. However, while most other pharmacy businesses are limited or closed to foreign ownership, wholesale pharmacy is a bit unique. The wholesale pharmacy in general is not put under the Negative Investment List and further, there’s no specific regulation either which stipulate otherwise, which mean it is open 100% to foreign capital ownership. However, please note to not mistaken between the wholesale pharmacy sector and wholesale drugs material sector, since between the two sectors it is differently regulated, for wholesale drugs material sector it is closed 100% for foreign capital ownership according to the Negative Investment List.
Establishment and Required Permits
Minister of Health Regulation No. 26 of 2018 on Licensing via OSS for Medical Sector strictly specify wholesale pharmacy as legal entity. Minister of Health Regulation No. 34 of 2014 on First Amendment of Wholesale Pharmacy Regulation stipulates that only legal entity in the form of limited liability company or cooperative are allowed to engage in this business. This means, other form of legal entity (such as limited partnership) is not allowed to engage in this business. Thus, the very first step of establishing this business is by establishing a standard limited liability company or cooperative. There are however, some requirements that need to be considered, such as:
- Wholesale pharmacy is required to have an Indonesian Pharmacist as permanent employee;
- Wholesale pharmacy is required to have storage and office building that could support their business activities;
- Wholesale pharmacy which sells drugs materials is required to have laboratory for drug testing and storage for keeping the medical material.
Before the issuance of OSS system, wholesale pharmacy business requires multiple permits including Wholesale Pharmacy Business License from Minister of Health, Pharmacy Distribution Certificate from Minister of Health and Proper Drug Distribution Method Certificate from BPOM. However, after the issuance of OSS, the permits are much simpler as there is no more needs to acquire wholesale pharmacy business license. Further, wholesale pharmacy can simply use standard trade business license (SIUP) from OSS as its business license. However, they would still be required to acquire the Pharmacy Distribution Certificate and Proper Drug Distribution Method Certificate.
Pharmacy distribution certificate is issued by the Minister of Health. The preliminary application is submitted through OSS and then the commitment fulfilment is processed in Ministry of Health E-Licensing System (elic.binfar.kemkes.go.id). The applicant would need to submit the following documents:
- Distribution plan;
- Documents of the pharmacist in charge, including:
a. Identity card;
b. Certificate of Graduation;
c. Pharmacist Registration Certificate (STRA);
d. Statement Letter on willingness to work full time; and
e. Employment / Cooperation Agreement between the pharmacist and business owner.
Moreover, proper Drug Distribution Method Certificate is issued by BPOM. Similarly, the preliminary application is submitted through OSS then the commitments are fulfilled at BPOM.
Author: Benedictus Giovanni
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