Indonesia memiliki lebih dari 30.000 spesies tanaman obat, namun hanya dua puluh produk yang berhasil mencapai status fitofarmaka yaitu kategori obat berbasis bahan alam dengan standar pembuktian ilmiah tertinggi. Meskipun kebijakan hilirisasi fitofarmaka telah berjalan melalui berbagai instrumen regulasi, pasar fitofarmaka dalam sistem kesehatan formal tidak terbentuk secara sistemik. Penelitian ini bertujuan menganalisis mengapa kebijakan hilirisasi fitofarmaka gagal menghasilkan pembentukan pasar, dengan memeriksa dampak desain regulasi dan proses implementasinya dari perspektif pelaku industri. Penelitian ini merupakan penelitian kualitatif dengan desain studi kasus. Data dikumpulkan melalui wawancara mendalam dengan informan dari institusi Kementerian Kesehatan, Badan POM, dan Industri Obat Bahan Alam yang dilengkapi dengan telaah dokumen regulasi. Analisis mengintegrasikan tiga kerangka yaitu teori sistem kebijakan David Easton, model implementasi Edwards III, dan prinsip analitis Regulatory Impact Assessment (RIA). Hasil penelitian menunjukkan bahwa kegagalan pembentukan pasar fitofarmaka bersumber dari design gap fundamental, bukan semata kegagalan implementasi dimana kebijakan hilirisasi dirancang secara supply-oriented tanpa instrumen yang menjamin kepastian permintaan. Analisis RIA menghasilkan persamaan ekonomi yang secara konsisten tidak terpenuhi expected revenue < regulatory burden + risk premium karena satu-satunya mekanisme yang berpotensi menciptakan permintaan efektif, yaitu reimbursement JKN dengan 278 juta peserta masih tertutup bagi fitofarmaka. Seluruh instrumen output yang tersedia bersifat demand-enabling, bukan demand-creating. Di balik stagnannya pasar aktual, teridentifikasi fenomena pent-up demand yang signifikan dimana seluruh informan industri menyatakan kesiapan berinvestasi secara agresif jika hambatan JKN dihilangkan. Penelitian ini menyimpulkan bahwa reorientasi kebijakan dari sisi penawaran ke sisi permintaan khususnya integrasi fitofarmaka ke dalam mekanisme JKN merupakan intervensi struktural yang paling mendesak untuk mengaktifkan pasar yang sesungguhnya telah siap secara potensial.

Indonesia possesses more than 30,000 medicinal plant species, yet only twenty products have achieved phytopharmaceutical status which is the highest evidence-based category for plant-derived medicines. Despite downstream policies backed by multiple regulatory instruments, a functional phytopharmaceutical market within the formal healthcare system has not emerged systematically. This study aims to analyze why downstream phytopharmaceutical policies have failed to generate market formation, by examining the impact of regulatory design and its implementation from the perspective of industry actors. A qualitative case study design was employed, with data collected through in-depth interviews with informants from the Ministry of Health, the National Agency of Drug and Food Control (BPOM), and traditional medicine industries, supplemented by regulatory document analysis. Three analytical frameworks were integrated: David Easton's policy systems theory, Edwards III's implementation model, and the analytical principles of Regulatory Impact Assessment (RIA). Findings reveal that the failure of phytopharmaceutical market formation stems from a fundamental design gap, not merely implementation failure, downstream policies are designed with a supplyside orientation, absent any instruments guaranteeing demand certainty. RIA analysis yields an economic equation that is consistently unmet: expected revenue < regulatory burden + risk premium, as the sole mechanism capable of generating effective demand JKN reimbursement covering 278 million enrollees remains closed to phytopharmaceuticals. All available output instruments are demandenabling rather than demand-creating. Despite the stagnation of actual market outcomes, a significant pent-up demand phenomenon was identified, with all industry informants expressing readiness to invest aggressively if the JKN barrier were removed. This study concludes that policy reorientation from supply-side to demand-side interventions, particularly the integration of phytopharmaceuticals into JKN reimbursement mechanisms constitutes the most structurally urgent intervention to activate a market that is already latently prepared.