Ernst & Young (E&Y) is a well-established international name for business advisory services. Please provide a brief overview of E&Y’s work in the Indonesian pharmaceutical sector.

E&Y offers a range of services to Indonesia’s pharmaceutical sector. One area of focus is their Fraud Investigation and Dispute Services (FIDS) division, which provides investigational services to monitor fraudulent activities both internally and externally. E&Y utilizes computer forensics and data analytics to assess harmful trends. The FIDS division also offers preventative services, such as fraud risk management and assessment. E&Y assesses the probability of fraud and develops risk maps to help clients mitigate risks and improve their business. Another significant part of E&Y’s work in the pharmaceutical sector is regulatory compliance. They review compliance with corporate regulations and the Foreign Corrupt Practices Act (FCPA) to ensure clients are operating within the bounds of the law. E&Y also provides transaction advisory services, helping multinational companies understand the financial and human resource positions of domestic companies they may acquire in the Indonesian market. They offer knowledge in employment regulations and compliance measures as well.

What are some case studies of the advisory services E&Y provides to its clients in the pharmaceutical sector?

While most of E&Y’s experience in the pharmaceutical sector comes from working with multinational companies, they also provide advisory services to domestic manufacturers and distributors. One area in which they offer guidance is in compliance with regulations related to the promotion of pharmaceutical products, such as avoiding bribery. Their FIDS division has used investigative tools to identify strange expenditures for pharmaceutical clients, conducting audits and seeking informational discrepancies in accounting records. By addressing inefficiencies, such as accounting discrepancies, E&Y helps reduce unnecessary costs for their clients.

Indonesia’s pharmaceutical industry is growing rapidly. How closely is E&Y monitoring developments within the sector?

The pharmaceutical industry is of great importance to E&Y, and they actively seek to increase their operations in the sector. Given the complexity of pharmaceutical regulations and the demanding compliance requirements, many companies can benefit from E&Y’s services. As an independent party providing advisory services, E&Y assists companies in navigating the complex regulatory framework of the pharmaceutical industry.

How does Indonesia’s regulatory climate compare to other countries?

Indonesian pharmaceutical regulations are not as stringent as those in the United States or other western countries. However, they are continually being developed and strengthened. Compliance follows a similar trend, with Ernst & Young supporting the industry’s overall compliance efforts. As the industry adopts higher levels of compliance, regulators can increase standards, ultimately aligning with international levels.

How does Indonesia’s regulatory playing field for pharmaceuticals differ for multinational and domestic companies?

The regulatory playing field is imbalanced, as multinational companies must comply with international regulations such as the FCPA, while domestic companies are not required to do so. While Indonesia does have anti-corruption laws comparable to the FCPA, enforcement levels are weaker. However, this imbalance does not necessarily benefit local companies. From a compliance perspective, businesses often view compliant companies as superior, valuing higher costs and higher quality. As a result, businesspeople with this mindset often choose multinational companies over domestic ones due to their higher compliance levels.

As you mentioned before, regulations are complex in Indonesia’s pharmaceutical industry. How important will compliance be to the future growth of the sector?

It is evident that the Indonesian government aims to increase healthcare access for its population, coupled with rising purchasing power among Indonesians. This trend is significant for the pharmaceutical industry because as purchasing power increases, consumers become more conscious of their choices. This will lead to an increased demand for compliant products. This bodes well for multinational companies looking to invest in Indonesia, and E&Y, with its international reputation and local knowledge, can assist these companies in succeeding in Indonesia’s pharmaceutical sector.