New Regulation on COVID-19 Vaccines Procurement

On October 5, 2020, President Joko Widodo signed the Presidential Regulation No. 99 of 2020 on the Vaccines Procurement and Implementation of Vaccination for Handling the Corona Virus Disease 2019 (COVID-19) Pandemic (“PR 99/2020”) which entered into force the day after. PR 99/2020 is intended to expedite the vaccines procurement and vaccination.

We set out below the key provisions of PR 99/2020.

  • Vaccine Procurement

Under PR 99/2020, the COVID-19 vaccine procurement covers (i) the provision of COVID-19 vaccines and supporting equipment and logistics needed; and (ii) the distribution of the COVID-19 vaccines until the delivery point determined by the Minister of Health (the “Minister”).

The implementation of the COVID-19 vaccines procurement shall be carried out by way of (i) the designation of a state-owned enterprise, (ii) a direct appointment to vaccine providers, and/or (iii) the cooperation with international institutions provided that the cooperation is only limited to the provision of COVID-19 vaccines and the cooperation excludes the supporting equipment for COVID-19 vaccination. Supporting equipment includes personal protection equipment (hazmat suits, face shields, medical gloves, and surgical masks), alcohol-based antiseptics, and safety boxes for bio-waste disposal.

  • Designation of a State-Owned Enterprise

The Minister designates PT Bio Farma (Persero) (“Bio Farma”) as the state-owned enterprise to procure the COVID-19 vaccines with the type and number of the COVID-19 vaccines determined by the Minister. In this case, Bio Farma may involve its subsidiaries, i.e., PT Kimia Farma Tbk and PT Indonesia Farma Tbk. Bio Farma may also cooperate with local or foreign business entities and/or institutions for procuring the COVID-19 vaccine.

  • Direct Appointment to Vaccine Providers

In line with the designation of Bio Frama, the direct appointment to the other business entities is carried out by the Minister. The vaccine providers may be in the form of national or foreign business entities that meet the requirements determined by the Minister, including: possession of a certificate on manufacturing practice for pharmaceutical products or a certificate on good distribution practice for pharmaceutical products.

  • Cooperation with International Institutions

The cooperation is carried out with international institutions which are currently offering or establishing cooperation for research, production, and/or procurement of the COVID-19 vaccine. The Minister determines the type and amount of COVID-19 vaccine procurement by taking into account the consideration from the Committee for COVID-19 Handling and National Economic Recovery.

Based on that, the Ministry of Foreign Affairs (the “MOFA”) establishes the cooperation with the Coalition for Epidemic Preparedness Innovations (CEPI) as an international institution.

In addition, the Minister may cooperate with the Global Alliance for Vaccines and Immunizations (GAVI) as an international institution. However, this cooperation may also be carried out through Bio Farma as the designated state-owned enterprise.

It is worth noting that the Minister determines the purchase price of the COVID-19 vaccines by taking into account the state of emergency and availability of the COVID-19 vaccines. Thus, the purchase price for the same type of vaccines may differ since it depends on a number of factors that may differ from time to time.

  • Vaccination Implementation

The Ministry of Health (the “MOH”) will carry out the COVID-19 vaccination based on (i) criteria and priorities for vaccine recipients; (ii) priority areas for vaccine recipients; (iii) schedule and steps for providing vaccines; and (iv) vaccination standard services, by taking into account the consideration from the Committee for COVID-19 Handling and National Economic Recovery. Further provisions on the COVID-19 vaccination shall be governed in a Regulation of the Minister.

  • Funding for Vaccine Procurement and Vaccination

The vaccine procurement and vaccination of COVID 19 are covered by State Budget and/or other legal and not binding sources in accordance with the prevailing laws and regulations. Advance payment may be given to the provider for more than 15% (fifteen percent) from the multi-year contract value, as stipulated under the agreement/contract.

In supporting the designation of Bio Farma to procure the COVID-19 vaccines, the Government may provide an additional State Capital Participation (Penyertaan Modal Negara) to Bio Farma.  Regional governments may also provide funding in their respective Regional Budgets to support the COVID-19 vaccination in their respective regions.

The Government may provide additional fiscal incentives such as tax, customs, and excise reliefs to import vaccine, raw materials, and equipment needed in the COVID-19 vaccine production and vaccination.

***

October 12, 2020

Copyright © 2020 AKSET. All rights reserved.