Evaluating the Impact of Mini-Competition on Pharmaceutical Procurement: Challenges, Risks, and Regulatory Implications in Indonesia

School Of Business And Management, Bandung Institute Of Technology, Bandung, Indonesia ,Subiakto Soekarno,Desy Kharohmayani,School Of Business And Management, Bandung Institute Of Technology, Bandung, Indonesia ,Achmad Billy Zulqiyami,School Of Business And Management, Bandung Institute Of Technology, Bandung, Indonesia ,Fredy Chandra,School Of Business And Management, Bandung Institute Of Technology, Bandung, Indonesia ,Nenden Indriawati,School Of Business And Management, Bandung Institute Of Technology, Bandung, Indonesia

doi:10.47191/ijcsrr/v7-i10-33

School Of Business And Management, Bandung Institute Of Technology, Bandung, Indonesia , Subiakto Soekarno + Show 8 more

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https://doi.org/10.47191/ijcsrr/v7-i10-33

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Abstract

This study evaluates the impact of the mini-competition method in pharmaceutical procurement in Indonesia, focusing on its challenges, risks, and regulatory implications. Mini-competition, a procurement method designed to promote competitive pricing in e-purchasing, has been introduced to streamline the procurement process, especially for essential goods such as pharmaceuticals. However, this method faces legal and practical challenges, including risks of fraud, reduced competition, collusion, and issues concerning product quality and innovation. The legal framework governing mini competition, including Presidential Regulation No. 12 of 2021, is analyzed to identify potential weaknesses in ensuring transparency and accountability. The research also includes a case study of pharmaceutical product procurement, highlighting the significant price reductions resulting from mini competition but revealing adverse effects on industry sustainability. The analysis of the cost structure of pharmaceutical companies shows that continued price reductions may force companies to cease operations due to unprofitability. Drawing on international case studies, this study concludes that while mini competition can lower procurement costs, it also poses significant risks to product quality, innovation, and market competition. Traditional tender methods are proposed as a more balanced and sustainable approach for pharmaceutical procurement, emphasizing the need for transparent and comprehensive evaluation criteria.

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