Medicine becoming a luxury few can afford

By Stevie Emilia

JAKARTA (JP): The crisis strikes without mercy, including the sick. As drug prices skyrocket and people make hard decisions on purchases, lives are at stake.

"I just hope neither of my two children get sick," said taxi driver Kusnadi. "Living expenses are already very high now and I don't know how I would get the money to buy drugs if my children fell sick."

He bought several different medicines for his family after learning about the increase in drug prices from a neighbor.

"I only bought nonprescription drugs, such as those for fighting flu and fever," Kusnadi said. "I usually pay Rp 500 for one strip of Decolgen, but now the drugstore sells it at Rp 1,000."

Retired businessman Santosa faces a more immediate problem. Following his doctor's advice, he takes two daily medications -- three pills to regulate his heartbeat and one or two vitamin capsules to keep fit.

He previously paid Rp 110 for the heart pill and Rp 875 for each vitamin.

"But since a few weeks ago, the prices have increased to Rp 400 and Rp 1,500 respectively," he sighed.

He uses a generic brand of the cardiac drug, but there is no generic equivalent of his vitamin. "Patented drugs cost three times the generic ones."

With the escalating drug prices, maintaining optimum health could become a luxury only a lucky few can afford.

Fawzi Ibrahim, a pharmacist in Blok M, South Jakarta, said his pharmacy increased drug prices beginning last December.

"The distributors had already increased the prices up to 50 percent more than usual (in December). So, we had to make price adjustments," he said.

Many of his customers, he said, complained about the hikes. "But it's impossible not to raise prices even though I feel sorry for them."

Minister of Health Sujudi has pleaded with patented drug manufacturers to not drastically raise prices as many people are still dependent on types unavailable in generic form.

"If the patented drugs manufacturer set a high price, people won't be able to afford the medicine and their (the companies) profits will decrease. More people now prefer to buy generics," Sujudi said.

The Ministry of Health appears to regard the crisis as a blessing in disguise in terms of increasing promotion and usage of generics, dismissed by the public as cheap medicines of inferior quality since their introduction here nine years ago.

The government sets the price of generic drugs, while the medicine manufacturers determine prices of patented products.

Although prices of patented drugs have reportedly increased by up to 300 percent, prices of generics, which had been relatively stable since 1993, have soared by as much as 150 percent in the past several months.

Generics account for 80 percent of prescribed medications.

The government increased generic drug prices by 50 percent in January and raised them again by 100 percent earlier this month.

The ministry also planned to increase drugs prices again by 15 percent in April.

But following widespread complaints over the earlier increases, the health ministry announced it would reduce prices of 225 generics by an average of 34 percent.

The ministry has also announced that it would subsidize hospitals and drugstores' purchases of generic drugs and provide subsidies worth US$116 million to help state-owned pharmaceutical companies import raw materials to make the drugs.

Fifty-four of the 225 pharmaceutical companies operating in the nation produce generic drugs; 47 of the firms producing the generics are privately owned.

Under the subsidy plan, medical companies could buy raw materials at a fixed exchange rate of Rp 5,000 to the U.S. dollar.

Ministry of Health figures show that the government spent $178.32 million on importing raw materials for 201 types of generic drugs last year.

This underscores the quandary that while most of the drugs are produced here, up to 90 percent of the raw materials used to manufacture them are imported.

Chairman of the Jakarta chapter of the Association of Indonesian Pharmaceutical Manufacturers, Achmad Ruhiat, said many of his members could no longer produce medicines due to their inability to purchase the imported substances.

He added that several foreign banks rejected association members' letters of credits (L/Cs) issued by local banks.

"If we are unable to import materials, we will not produce anything," he said.

The pharmaceutical industry is trying to reduce the acute dependency on imported raw materials.

With the support of the ministry, several large pharmaceutical manufacturers formed a consortium in 1996 to produce medicinal ingredients, such as paracetamol, that were formerly imported.

"We have to reduce our dependency little by little," said the president of the Association of Indonesian Pharmaceutical Manufacturers, Anthony Sunarjo.

"We import medicines which are difficult to produce locally due to the lack of technology, or which are newly invented."

Indonesia also exports medicines made with imported ingredients, a market worth about $40 million last year.

But the accompanying high research expenses have prevented some manufacturers from conducting their own studies.

Before the crisis, research for one ingredient was estimated to cost a company between Rp 130 million and Rp 150 million, and the research to produce a product could cost Rp 350 million.

"The high research and production costs of drugs are not commensurate with the (annual) $5 per capita medicine consumption in the country," Anthony said.

This consumption is by far the lowest in the region, compared to $14 in the Philippines, $12 in Malaysia, $42 in Singapore and $13 in Thailand.

The ravaging of the rupiah has further reduced the public's purchasing power for drugs, a secondary expense behind food for many consumers.

Rahmat Suharsono, a doctor in private practice in Pejompongan, Central Jakarta, said cash-strapped people could request generic drugs before the crisis hit.

"But they are all expensive now," he said.

He feared the high drug prices would lead people to practice self-treatment by purchasing unprescribed medicines over the counter.

"People's knowledge about drugs is still low, so it will be dangerous if they try to treat themselves," Rahmat said.