Price war in generic drugs intensifies: Lawmaker

Dewi Santoso, The Jakarta Post, Jakarta

A legislator expressed concern on Tuesday about a price war among the country's generic medicine producers, fearing it would prompt drug trade in the black market.

House of Representatives Commission VII deputy chairman Surya Chandra Surapaty said the price war was the result of producers' aggressive promotion by offering huge discounts to distributors, leading to an increase in demand for their products.

"This is unhealthy competition that will deprive consumers of their rights," he said.

His observation of three different pharmaceutical companies from September to December this year found that prices of generic drugs varied from one company to another.

Ciprofloxacin 250 milligram tablets, for example, was sold at Rp 157,096 (US$18.5) for one box containing 50 tablets. But if distributors bought between 18 and 54 boxes, they would receive an 80 percent discount.

At Dexa Pharmaceutical Company, Surya found distributors could buy Omeprazol 20 milligram tablets at an 88 percent discount if they bought at least 85 boxes of 30 tablets each.

Nifedipin 10 milligram tablets produced by state pharmaceutical firm PT Kalbe Farma were sold to distributors at a 40 percent discount if they bought a minimum two boxes of 100 tablets each.

"It's ironic that producers ask for an increase in generic drug prices, while at the same time give big discounts to distributors," he said.

The government increased the prices of generic drugs following demand from producers, who complained about the country's fluctuating currency against the greenback that caused uncertain prices of imported raw materials.

"Now that our currency is stable, why should we increase generic drug prices?," Surya told The Jakarta Post.

He asserted drug prices could not be raised as people had to buy them to cure their illnesses.

"Thus, we urge the government to immediately formulate a regulation that will allow the monitoring of the distribution of medicines and their prices," he said.

He added that a transparent regulation, including the implementation of price labeling, would guarantee consumers' rights.

The House has urged Minister of Health Achmad Sujudi to take action to end the price war.

"The government is now in the process of forming a National Medicine Commission, which will decide on drug regulations," Surya said. The commission will fall under the Coordinating Minister of People's Welfare.

When asked whether the government would comply with the House's demand, Sujudi said: "The government will not back down from its decision to increase the prices of generic drugs."