Collusion practices inflate medicine prices

By K. Basrie

JAKARTA (JP): Although he no longer chairs the influential Indonesian Medical Association, Kartono Mohamad remains authoritative in medical affairs.

He is now chief editor of Medika health magazine.

When leading the association from 1985 to 1994, he submitted a list to the health minister at the time, Adhyatma, of 500 practitioners he alleged colluded with pharmaceutical industries and inflated medicine prices.

"The minister turned a deaf ear to the report," says the 57- year-old former navy medical staffer and writer of Legal Aspects and Medical Ethics in Indonesia.

Kartono shared his views in an interview with The Jakarta Post on the state of current medical affairs in Indonesia. The following are excerpts:

Question: What's your opinion about the current price of medicines in Indonesia?

Answer: Medicine is too expensive for most people. For instance, a five-gram tube of penicillin costs over Rp 10,000 (US$4.25). So how could ordinary people like those in remote villages afford to buy it?

My recent comparative study in Bangkok on drug prices in Indonesia and Thailand found that medicine in Indonesia is much more expensive than in Thailand.

Yet the Indonesian government and the pharmaceutical industry insist that not all types of medicine are costly. They may be right, but I do not know of any medicine that is cheap in this country.

People consider that prescription drugs are very expensive, but the government and the pharmaceutical industry don't think so.

Health authorities claim the prices of certain types of medicine are almost the same as those in Singapore. It seems to me they ignore the difference between Singaporeans' and Indonesians' buying power and per capita incomes.

What about drug prices in other countries?

Thailand has a per capita income of $2,680 (Indonesia's is $940) but medicine is cheaper there. Some types of medicine in Bangkok are twice as cheap as those here.

In Singapore, the price is slightly lower than it is here but, keep in mind that their per capita income is much higher ($26,400) than ours.

People point their fingers at the government's slack control of the pharmaceutical industry, the greed of some businessmen and doctors and patients with no bargaining power in the situation. What do you think?

I absolutely agree, although I know many parties reject this idea.

The government is not serious in controlling the pharmaceutical industry and this problem has been going on for many years. In the past, it let the pharmaceutical industry mushroom, disregarding the actual market demand.

Consequently, 250 factories operated below capacity and set high prices to compensate for the high overhead costs. Had the government controlled the number of factories in the early years, I believe it would have resulted in efficiency, which would have led to lower drug prices. I don't know why the government made such a mistake.

But the rule of thumb shows the more factories, the lower the prices would be, doesn't it?

That happens with other products. It's wrong to assume that doctors will readily recommend cheaper drugs for their patients. The government's slack control allows drug producers and doctors to dictate prices, while consumers have nothing to fight it with.

Many doctors just scribble the prescription and don't care about prices and their patients' financial conditions because they never buy drugs. Drug producers know how to collude with doctors and exploit this situation.

What may the corrupt doctor receive from the drug producer in return?

It depends on the amount of profits raked in. I could show you a noted specialist who got a car from such a conspiracy.

How reliable is the medicine recommended by such a doctor?

They don't care. What they would choose is the drug whose producers offer the best "deal", while the patients are ignorant of the conspiracy.

Corrupt doctors never run out of tricks to blackmail drug producers. For example, some practitioners will threaten to boycott certain medicines unless the supplier or producer gives them money to attend seminars.

Isn't such a practice in violation of the practitioners' code of ethics?

They do violate their oath and code of ethics. It is rampant, and nobody does anything to stop it. Neither do the pharmaceutical industries and their partners, which compete with each other.

How many doctors are involved in this dirty business?

Their number is less important than the fact that the practice exists, often well-organized. The blackmailed suppliers or producers do not dare do anything for fear their products will be boycotted.

Are there any public officials involved in this business?

Yes. It is common for officials to use their power for personal benefits. Many drug companies have complained that they have been blackmailed into providing cash amounting to hundreds of millions of rupiah (by the certain people in power) for dubious purposes. To make up losses, they inflate the prices of their products.

What has the doctor's association done to help victimized patients?

When I was chairman of the association, I brought a list of over 500 corrupt doctors along with a bulk of material evidence, such as receipts of illicit levies, to the then-health minister, Adhyatma.

I urged him to take stiff measures against the doctors who we believed had caused medicine prices to soar as the result of their conspiracy with pharmaceutical industry owners. But the minister never took action against the culprits.

Our efforts ended up in the trash bin. It seems that the government is not concerned at all about this problem.

What about the Indonesian Consumers Foundation?

What the foundation does is no more than advocacy. Moreover, the House of Representatives is not supportive of the agency. Anything it does without the House's support is useless.

Why do customers never complain?

Even I am surprised. Maybe it is because our society is fatalistic. But I believe the educated class should do something to mend the situation.

What is your suggestion?

Simple. Make this topic an open discussion in the media, so everybody -- including the government, the public and the industry -- can do something.