Pharmaceutical industry: Torn between business and conscience<\/p>\n
T. Hidayat, Contributor, Jakarta<\/p>\n
Medicines are bitter, so goes one Indonesian saying. However,
\nthe makers of medicines -- the pharmaceutical industry -- is
\nhaving a sweet time businesswise.<\/p>\n
The industry was even unaffected by the economic crisis that
\nhit the country in 1997. The Rp 4 trillion sales figure of 1997
\nincreased by 25 percent to Rp 5 trillion in 1998. Another
\nincrease of 20 percent took the sales figure to Rp 6 trillion in
\n1999, while the year 2000 saw an enormous increase of 50 percent
\nto Rp 9 trillion. The number has been on the rise ever since with
\nsales for this year estimated to reach above Rp 17 trillion
\n(about US$2 billion).<\/p>\n
Compared to total sales worldwide -- US$400 billion -- the
\ncountry's market is currently only 0.5 percent, while the actual
\npotential for pharmaceutical sales in Indonesia is estimated at
\nabout 3.5 percent. If this estimate is correct, then it is only
\ngood news for manufacturers here, theoretically at least, to
\ncontinue partying.<\/p>\n
However, they are fully aware of the harsh reality that may
\nnot accelerate sales as expected. One of the hindering factors is
\nspending per capita allocated for health in Indonesia is only
\nUS$5 annually, which is lower than Malaysia's US$12 and even much
\nlower than the neighboring city-state Singapore where it is
\nUS$40. Next to consumers' low purchasing power, the government is
\nalso expected to improve its programs to provide health care for
\nthe people, especially the poor. That will help turn the wheels
\nof the pharmaceutical business faster.<\/p>\n
In spite of the discrepancies or limitations, more than 200
\nmanufacturers are competing locally. Some local companies are
\neven innovative enough to turn out new and alternative medicines.<\/p>\n
"I'm glad that locally owned manufacturers haven't lost their
\ncreativity," said Sofiarman Tarmizi, secretary general of the
\nIndonesian Association of Pharmaceutical Manufacturers.<\/p>\n
Even state-owned companies, like Indofarma, are in high
\nspirits. In cooperation with Oxford University, England,
\nIndofarma has launched various modern jamu (herbal medicines),
\nlike Prolipid, with aggressive advertising. Worldwide the market
\nfor herbal medicines is growing, as indicated by these sales
\nfigures: in Germany 4.5 billion Euro, in the United States US$4.4
\nbillion and in the country famous for herbal medicines, China, it
\nis the highest, US$6 billion. In Indonesia it is still hovering
\nat only US$120 million.<\/p>\n
Just like their counterparts, the non-prescription over-the-
\ncounter medicines, herbal medicines are also marketed the way
\nconsumer goods are, using modern marketing methods that include
\ncreative and smart advertising. This indicates the readiness of
\nmanufacturers of herbal medicines to compete in an open market.<\/p>\n
For manufacturers, though volumewise the market of over-the-
\ncounter products is huge, larger profits lie in those that are
\nprescribed by doctors, the ethical medicines. Over-the-counter
\nmedicines enjoy 60 percent of total sales, however the revenue
\ncontributed by ethical products is higher, 65 percent. So,
\nobviously, companies rely on the ethical drugs for their fat
\nmargin.<\/p>\n
Promotion costs for ethical products are comparatively low, as
\nno conventional advertising on a massive scale is necessary.
\nHowever, the only promotion method allowed -- directly to the
\ndoctors -- has raised some dubious business practices. The power
\nin a doctor's hand -- to prescribe a certain drug -- has
\ninevitably created a symbiotic, mutually beneficial relationship
\nbetween the doctor and the company. This unethical conduct has
\nled to the exorbitant price tags of numerous ethical medicines in
\nthe country.<\/p>\n
Though admitting that things have not improved much, Sofiarman
\nbelieves that the association is getting results from its
\nlobbying the member companies to eradicate illegal conduct. After
\nall, he added, medicine is associated with health and health is a
\nbasic human right.<\/p>\n
Another factor to be taken care of by pharmaceutical companies
\nis good manufacturing methods. Reintroduced here in 1990, the
\nimplementation by a number of companies is yet to reach the set
\nstandards as indicated by data available from the Food and Drug
\nSupervising Agency (BPOM) in regards to quality of raw materials,
\nproduct-stability test and so on.<\/p>",
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