Indonesia's New Healthcare Regulation: Medicine Pricing, Halal Labelling, and Sanctions Under Ministry of Health Regulation No. 5 of 2026

In the previous discussion, we have examined the upstream aspects of the regulation, including national planning for medicines and medical devices, manufacturing standards, strategic stock requirements, emergency preparedness, and procurement reforms.

This article turns to the downstream regulatory framework of how the healthcare products could reach the patients, how prices are determined, the new halal labelling requirements, and the administrative sanctions that may be imposed for non compliance activity. Broadly, these reforms aim to strengthen transparency, improve consumer protection, and keep medicines and medical devices safe, affordable, and accessible across Indonesia.

Division of Distribution Permit Authority

Under Permenkes 5/2026, medicines, medical devices, and other health products all need a distribution permit before they can be distributed. The regulation clarifies which of the two main regulators handles what. Distribution permits for pharmaceutical products, prescription medicines, over-the-counter (OTC) medicines, biological products, traditional medicines, health supplements, cosmetics, and processed food for special medical purposes continue to be issued by the Head of the National Food and Drug Authority (BPOM).

Medical devices and certain household health products, meanwhile, stay under the Ministry of Health, which issues the relevant permits in line with applicable technical requirements.

By drawing this line clearly, the regulation aims to improve administrative certainty while keeping the institutional structure businesses already know. To ease the transition, distribution permits issued under previous regulations remain valid. Pharmaceutical companies, medical device manufacturers, importers, and distributors don't need to reapply just because Permenkes 5/2026 has come into force. This transitional arrangement avoids regulatory uncertainty and lets products already legally on the market keep moving without disruption while businesses adjust to the new framework.

Read more: Indonesia's New Health Supplies Regulation: What Permenkes 5/2026 Means for Drug Production and Availability

Mandatory Halal Labelling for Products Containing Non-Halal Ingredients

Regarding labelling of the health supplies, Permenkes 5/2026 introduced a new provision that previously has not been regulated.

In some instance where a healthcare product:

• Contains ingredients that have not yet certified as halal;
• Contains ingredients that is not halal;
• Manufactured using production processes that do not meet applicable halal requirements,

it must now clearly disclose that on its label. The information has to be objective, complete, and not misleading, failing to meet this standard can trigger administrative sanctions. Importantly, this rule doesn't ban the manufacture, import, or sale of such products. It's about transparency: giving consumers the information they need to make informed purchasing decisions. Indonesia already regulates halal certification through separate legislation, but Permenkes 5/2026 is notable because it builds halal-related disclosure directly into the healthcare regulatory framework itself.

Expansion of Distribution Channels: Minimarkets and Automated Vending Machines

Permenkes 5/2026 also modernizes the way certain medicines may be supplied to consumers. Under the new regulation, over the counter (OTC) medicines, which do not require a doctor's prescription, may now be distributed through a wider range of retail channels.

In addition to pharmacies, eligible OTC medicines may also be sold through:

• Hypermarkets, Minimarkets, and Supermarkets;
• Automated vending machines; and
• Other facilities determined by the Minister.

The goal is to improve access to basic medicines, particularly for common conditions that call for simple self-medication. For consumers, that means essential medicines are available in more convenient locations than a traditional pharmacy.

This broader distribution model doesn't apply across the board, though. Certain products such as traditional medicines for specific purposes and health supplements designed for particular medical needs, remain restricted to pharmacies or other authorized healthcare facilities, reflecting the need for closer professional supervision.

The expansion cuts both ways. It lowers barriers to basic healthcare and adds convenience, but it also raises the stakes for regulatory oversight. Government bodies and businesses alike will need to make sure products stay authentic, are stored properly, and meet quality standards throughout the distribution chain.

Advertising Restrictions for Certain Medicines

Permenkes 5/2026 tightens the rules on advertising healthcare products. Prescription medicines, natural medicines, processed food for special medical purposes, and health supplements for special purposes can no longer be promoted directly to the general public. Instead, promotional activity for medicines and medical devices that require professional supervision can only run through media aimed at healthcare professionals, pharmacists, doctors, and other licensed practitioners. The intent is to encourage rational medicine use and reduce the risk of inappropriate self-medication. Prescription medicines often need clinical assessment, diagnosis, or dosage adjustments from a qualified professional direct-to-consumer advertising risks encouraging demand for products that should only be used under medical supervision.

Changes to the Method for Calculating the Maximum Selling Price of Medicines

One of the significant commercial changes introduced by Permenkes 5/2026 concerns the methodology for determining the highest retail price of medicines. The new regulation moves away from the previous pricing formula and adopts an approach that reflects the actual cost of buying pharmaceutical products.

Under the previous regulatory framework in Permenkes 98/2015 , the highest retail price of medicines was generally calculated using a fixed formula consisting of the medicine's net pharmacy price plus a predetermined 28% margin. This approach provided a relatively uniform pricing structure across healthcare facilities. Permenkes 5/2026 introduces a different methodology.

Instead of relying on a fixed margin, the highest retail price is now determined based on:

• Actual acquisition cost of the medicine after taking into account any discounts or incentives received; and
• Pharmaceutical service fees determined by the Minister.

The regulation also requires this price calculation to be clear, accurate, and transparent, and requires the highest selling price of distributed healthcare products to be reported through the National Health Information System.

In practice, this means the same medicine may no longer carry an identical retail price at every healthcare facility. Providers purchase at different prices depending on their procurement arrangements, negotiated rates, purchasing volume, or supply contracts, so the final selling price can vary.

That doesn't necessarily mean prices will rise. The regulation simply builds in more flexibility, letting prices reflect actual procurement costs while still operating within the government's pricing framework.

New Transparency Requirements for Discounts and Incentives

Permenkes 5/2026 also tightens transparency around commercial arrangements that previously went unregulated.

Pharmaceutical companies and other healthcare suppliers must now be more transparent about product prices, as well as any discounts or incentives offered to healthcare professionals and facilities. The point isn't to ban legitimate commercial arrangements, it's to make sure they're properly documented and reported.

These new reporting obligations are meant to reinforce public trust that prescribing and procurement decisions rest on medical judgment, not commercial incentives. They also bring Indonesia's healthcare regulation closer in line with international standards on ethical relationships between the pharmaceutical industry and healthcare professionals.

Regulatory Oversight and Sanctions for Non-Compliance

Types of Violations Subject to Administrative Sanctions

One notable provision of the new regulation is the consolidated system of administrative sanctions that previously were scattered across numerous specific sector regulations.

Through this regulation, administrative sanctions may be imposed for a wide range of regulatory breaches, including violations relating to in some examples:

• Manufacturing standards;
• Distribution practices;
• Product labelling;
• Advertising and promotion;
• Procurement requirements; and
• Other obligations established under Permenkes 5/2026.

Levels of Administrative Sanctions

The Permenkes 5/2026 also adopts a graduated sanction enforcement approach, allowing sanctions to be imposed according to the seriousness of the violation.

1. Written Warning

For less serious violations, the authority may issue a written warning requiring the business to improve the identified non compliance issue within a specified period. A written warning generally serves as the initial enforcement measure, providing businesses with an opportunity to implement corrective actions before heavier sanctions are imposed.

2. Business Activities Temporary Suspension

For a violation that is more serious or when businesses fail to comply with the written warning, the authority may temporarily suspend the whole or part of the relevant business activities. These sanctions depend on the circumstances, the suspension may apply to manufacturing, importation, distribution, or other regulated activities until the company has fixed the non compliance issue and meets the applicable regulatory requirements.

3. Administrative Fines

The availability of administrative fines penalties provides regulators with greater flexibility when responding to regulatory violations and shows an important development compared with several previous ministerial regulations, which did not specifically provide for administrative fines.

These regulations authorize the authority to impose administrative fines on businesses that fail to comply with the regulatory obligations. This addition strengthens the Government's enforcement effort and reinforces the importance of maintaining ongoing regulatory compliance.

4. Police Coercive Power

For more serious violations, the authorities may impose administrative enforcement measures in police coercive power aimed to protect public health and prevent further regulatory breaches. These measures may include:

• Product withdrawal;
• Compensation or other remedial measures;
• Products destruction;
• Access blocking or restricting to electronic systems used in the business activities; and
• Blacklist or prohibition to future businesses permit re applications.

These measures are intended to immediately mitigate risks to public health while ensuring that non compliant products or business activities do not continue to circulate in the market or in the future.

5. Revocation of Business Licences

For most serious cases or when businesses repeatedly fail to comply with the applicable regulatory requirements, the Government may revoke the relevant business licence. License revocation represents the most severe administrative sanction under Permenkes 5/2026 and may effectively prevent a business from continuing its regulated activities in Indonesia.

Permenkes 5/2026 provides the authorities with flexibility in determining the appropriate enforcement response. Depending on the nature and impact of the violation, administrative sanctions may be imposed progressively, beginning with a written warning and escalating when the issue continues. However, where a violation poses a significant risk to public health, product safety, or regulatory integrity, the authorities may impose multiple sanctions cumulatively which both are entirely based on the calculated risk level. Given the potential impact of licensing violations, businesses can work with CPT Corporate for business licence assistance and regulatory compliance support in Indonesia.

Public Complaint Mechanism

Permenkes 5/2026 also strengthens public participation in oversight by creating a formal mechanism for individuals, groups, or institutions, meeting the required criteria to report suspected violations in the healthcare sector. The regulation protects complainant confidentiality, and every valid complaint triggers a thorough, official investigation by an appointed ad hoc panel.

This is new territory: reporting and complaint mechanisms in the health sector used to be informal, fragmented, and weakly enforced, without a clear procedural structure for handling or protecting complaints. The introduction of a formal complaint channel raises the stakes for businesses to maintain strong internal reporting and confidentiality practices, catching compliance issues early, before they escalate into formal public complaints. Businesses with a strong compliance culture stand to benefit most.

Key Compliance Steps for Businesses

As Permenkes No. 5 of 2026 introduces new obligations across the healthcare supply chain, businesses should consider reviewing their compliance during this transition period. Key action points include:

• Review product labels to ensure that products requiring halal related disclosures have been updated accordingly.
• Assess promotional and marketing materials to confirm that prescription medicines and restricted medical devices are promoted only through media intended for healthcare professionals.
• Strengthen procedures for recording and reporting discounts or incentives provided to healthcare professionals or healthcare facilities.
• Establish or enhance internal reporting mechanisms so that potential compliance issues can be identified before becoming the subject of formal public complaints.

Taking proactive compliance measures during the transition period will help businesses reduce regulatory risk while demonstrating their commitment to responsible corporate governance.

Frequently Asked Questions (FAQ)

What is the mandatory halal labelling requirement for medicines? Permenkes 5/2026 requires healthcare products containing ingredients that are not halal or have not been certified as halal, also products manufactured through processes that do not comply with halal requirements to disclose this information as clearly and complete as possible on their labels. This is not a prohibition on selling such products. Rather, the requirement promotes transparency by enabling consumers to make informed purchasing decisions based on accurate product information.

Why can medicine prices differ between pharmacies? Under the new pricing methodology, medicine prices are calculated based on the actual acquisition cost incurred by each healthcare provider by taking into account discounts or incentives along with service fees that have been determined. Because different pharmacies, hospitals, or healthcare facilities may purchase medicines at different prices, therefore the same product may be sold at different retail prices depending on each provider's procurement costs.

What types of sanctions may be imposed on pharmaceutical companies? According to Permenkes 5/2026, administrative sanctions towards pharmaceutical companies depends on the seriousness of the violation which may be subject to one or more sanctions:

• Written warnings;
• Business activities temporary suspension;
• Administrative fines;
• Usage of police coercive power;
• Businesses license revocation.

The Government may impose these sanctions progressively or cumulatively depending on the severity and impact of the non compliance issue.

Read more: How to Obtain Operational Business Licenses After Company Incorporation in Indonesia

Conclusion

Permenkes 5/2026 represents a major step toward modernizing Indonesia's regulation of health supplies, building a more structured, transparent, and accountable framework. From pricing rules and halal labelling requirements to oversight systems and administrative sanctions, these changes reflect the Government's push to strengthen consumer protection while holding businesses to a higher compliance standard. Adapting early to these new provisions will help businesses limit regulatory risk and contribute to a safer, higher-quality, and more accessible healthcare system.

How Can Businesses Prepare for Permenkes 5/2026?

Understanding and implementing new healthcare regulations can be challenging, particularly when they affect licensing, procurement, contracts, pricing, and compliance procedures.

CPT Corporate provides legal consulting, regulatory compliance support, licensing assistance, corporate secretarial services, and other business solutions for companies operating in Indonesia. Contact CPT Corporate to discuss how your business can prepare for and comply with the requirements under Permenkes 5/2026.