Government cuts generic drug prices

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)