Don't raise price of generic drugs, NGO says

Sari P. Setiogi, The Jakarta Post, Jakarta

The Indonesian Health Consumers Foundation (YLKKI) has rejected as irrational the government's plan to raise the price of generic drugs by 6 percent to 7 percent this year.

"In a situation where the economic position of most people is relatively weak, increasing the price of generic drugs is not the right decision," YLKKI chairman Marius Widjajanto told The Jakarta Post on Saturday.

The supply of generic (unbranded) drugs is expected to meet the medication needs of people on a limited budget, as they are sold more cheaply than branded drugs.

Marius said that in May 2003 the government offered discounts of 10 percent to 70 percent on generic drugs at outlets and drugstores.

"That means the government still makes a lot from selling generic drugs, so why should it increase the price?" Marius said.

He added that the appreciation of the rupiah against the U.S. dollar should have brought down the price of medication, instead of increasing it.

"Previously, drug producers said the price was high because many of the ingredients were imported," he said.

Most imported drugs distributed in the country come from India and Greece. "The drug producers are eager to sell their products here, as they make more of a profit," said Marius.

Health Minister Achmad Sujudi said last Tuesday that the planned increase was aimed at improving the distribution of generic drugs.

"The government has tried to provide low-cost medication for the community by supplying generic (unbranded) drugs, but outlets and distributors don't like low prices, as they reduce their margins," Sujudi said.

"If the distribution side doesn't work, that is a problem because we operate under a market system. It's therefore necessary to increase the price (of generic drugs)," he said.

He guaranteed, however, that the new prices would still be far below those of branded drugs.

According to Marius, the price differential here between generic and branded drugs can reach 600 percent.

He cited as an example the price of a 500-milligram tablet of the antibiotic, amoxicillin. The generic version is available at Rp 560 (about 7 U.S. cents) per tablet, while the branded one can be as much as Rp 3,000 per tablet.

"Abroad, the price differential is only 20 percent to 30 percent," said Marius. He thought that the price of the generic drug could still be set at about Rp 300 per tablet. "At that price, the producer can still make a profit."

"Why is the government so reluctant to deal with the distributors?" Marius asked.

"Most distributors not only distribute generic drugs, but also branded ones. With such large margins, they can make a huge profit on the branded ones," Marius said.