Government to raise price of generic drugs

Government to raise price of generic drugs

JAKARTA (JP): Local pharmaceutical companies have received
government approval to increase the price of generic drugs by
between 20 percent and 30 percent.

The head of the Food and Drug Control Agency (BPOM), Sampurno,
said on Monday the price hike, effective on Tuesday, was
essential to help producers cope with higher operating costs due
to the removal of a government subsidy.

"The government has no choice but to raise the prices. We have
no more funds to subsidize the sale of generic medicines,"
Sampurno was quoted by Antara news agency as saying.

The government had subsidized the import of raw materials used
for the production of generic drugs in the form of a lower rupiah
exchange rate. The subsidy was a government effort to provide
affordable medicine for the public.

The exchange rate reference for producers of generic drugs was
set at Rp 6,000 per U.S. dollar. If the dollar exceeded that
level, the government paid the difference.

The rupiah has been hovering at between Rp 10,000 and Rp
11,000 against the dollar in recent months, placing a heavy
burden on the government in financing the subsidy.

According to Sampurno, pharmaceutical manufacturers had
earlier asked the government to raise the price of generic drugs
48 percent.

The producers also complained their operating costs had also
swelled as a result of the rise in the price of fuel for
industry, Sampurno said.

According to Sampurno, the price hike would not put the cost
of generic drugs out of reach of the public. He said that before
the price increase, generic drugs were 25 percent to 75 percent
less expensive than nongeneric drugs.

The Indonesian Consumers Foundation (YLKI) said it regretted
the rise in the price of generic drugs.

"Other prices may be increased but not drugs, because this
will only burden the common people," YLKI researcher Ida Marlinda
said in February. (03)