Government cuts generic drug prices

JAKARTA (JP): The government has cut generic drug prices by an average 34 percent after widespread complaints over soaring prices during the last few months.

The Ministry of Health announced last week that the reduced prices would come into effect as of Feb. 18.

The ministry said the government had provided subsidies worth US$116 million to help pharmaceutical firms import raw materials to make drugs. The raw materials were the ingredient largely blamed for triggering the price hikes.

The announcement came just five days after Minister of Health Sujudi told the House of Representatives that the government planned to subsidize hospitals and drugstores' purchases of generic drugs and help state-owned pharmaceutical companies to buy ingredients at lower rates.

Director General of Food and Drug Supervision H. Sampurno was quoted by Antara last week as saying medical companies could now buy raw materials at a fixed exchange rate of Rp 5,000 to one U.S. dollar thanks to the subsidies.

The country's generic drugs are manufactured by 54 of the 225 pharmaceutical companies operating in Indonesia. Forty-seven generic drugs producers are privately owned.

Sampurno said state pharmaceutical firms would make only a small profit from selling generic drugs, so that the prices could be slashed to an affordable level.

The government increased generic drug prices 50 percent last month. As the rupiah continued to nosedive earlier this month, the government again raised prices 100 percent, to the chagrin of many people who suddenly found they could not afford to buy generic drugs.

Records from the health ministry show that the importation of raw materials has increased in value in the last two years. Last year, it reached $178.32 million, some $22 million higher than in 1994.

Generic drugs, introduced in 1989, have always cost less than patent drugs. The latter's price have reportedly soared by up to 300 percent since financial crisis hit the country in July last year.

Sampurno said antibiotics (amoxylin) now cost Rp 53,000 per box of 100 tablets, a 46 percent drop compared to the price set early this month. Amphisilin generic drugs sell for Rp 46,850 per 100 tablets, compared to Rp 85,100 previously.

Control

Sampurno said his office had appointed distributors to ensure the timely arrival of generic drugs in a bid to increase control over prices and availability of the drugs at dispensaries.

The office also listed a number of delinquent dispensaries which were frequently found to raise drug prices beyond tolerable limits.

Sujudi said the ministry would take stern measures against dispensaries or drugstores which violated the new price standards or which hoarded drugs.

"I have instructed the Directorate General of Drugs and Food Supervision to control the prices and availability of generic drugs at dispensaries throughout the country," the minister said after officiating the dispatch of generic drugs to dispensaries across the country on Thursday.

Meanwhile, president director of state pharmaceutical firm PT Indofarma, Gunawan Pranoto, said his company guaranteed the availability of generic drugs at community health service centers and hospitals. (amd)