Background: Indonesia's dependence on imported active pharmaceutical ingredients (APIs) remains a key challenge in strengthening national pharmaceutical resilience. The government promotes locally produced APIs through domestic component level policy, domestic product prioritization, and public procurement mechanisms. However, implementation at the industry level still faces technical and economic challenges. Objective: This study explores the implementation of locally produced APIs in HIV medicine production in a national pharmaceutical company and describes its relationship with input, process, and output factors, represented by product sales performance. Methods: This non-experimental case study used a qualitative approach through in-depth interviews, supported by descriptive quantitative analysis. Eight professionals from R&D, quality assurance/manufacturing, costing/finance, and commercial functions were interviewed. Secondary data were obtained from company documents, IQVIA market data from 2020 to 2024, and relevant regulations. Results: Locally produced APIs increased the domestic component level and strengthened product positioning in government procurement. Nevertheless, most locally produced APIs were more expensive than imported APIs, increasing the cost of goods manufactured by approximately 2.0%-28.9%. All analyzed products generated positive gross margins, ranging from 19% to 68%. From a process perspective, local API utilization required raw material characterization, formulation evaluation, stability/dissolution/bioequivalence testing when needed, process validation, and quality control. Conclusion: Local APIs provide strategic value for pharmaceutical resilience and government market access, but their sustainability depends on balanced support for quality, price, supply continuity, industrial technical readiness, and procurement policies that do not rely solely on the lowest price.
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Bahari et al. (2026) studied this question.
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