Rupiah Weakens, Health Minister Says Drug Prices Will Rise Gradually

Health Minister Budi Gunadi Sadikin has assured that the increase in medicine prices will not be excessive. He explained that the price adjustment is linked to the weakening of the rupiah exchange rate against the US dollar. Therefore, the increase is calculated only on certain components of production costs. “Now, how much of the raw material for drugs is imported? For example, let’s say 30 per cent of the cost of raw materials or drug ingredients is against the total drug price,” Budi said at the DPR Building, Central Jakarta. Budi gave an example that 30 per cent of the drug cost comes from raw materials. Then, 80 per cent of the raw materials are imported. This means the component affected by the dollar is only about 24 per cent of the total drug price. “How much has the dollar risen? For example, if the dollar has risen by 15 per cent. So, just calculate 15 per cent of the 24 per cent earlier. That means the impact on the price should be around 3 per cent,” he revealed. He stated that the increase in drug prices is only affected by around 3 per cent if the rupiah exchange rate against the dollar rises by 15 per cent. “We have calculated this at the Ministry of Health, and we are discussing it with the industry so that the increase is reasonable. Not everything suddenly goes up by 100 per cent or 200 per cent,” he stressed.