The cost of medicine

The cost of medicine

From Kompas

I agree with the Consumer Institute's findings that the prices
of medicines in Indonesia are substantially higher than in other
countries. The reasons are as follows.

First, the price leaders in most of the products are foreign
pharmaceutical companies. They take their profits twice. First,
the parent company gets a share in the profits by supplying raw
material, and second, the company in Indonesia makes its profit
by manufacturing the finished product. The selling price is two
to five times the production cost, so that the gross profit is in
the range of 100 percent to 400 percent.

Second, promotion costs reach 15 percent to 20 percent. I feel
the following can be done to reduce the price of medicines.

* Have tighter government control on the price of medicine by
determining that the selling price does not exceed double the
basic production cost. This would yield a gross profit of 100
percent. This is very adequate, is it not?

* Wasteful promotion should by replaced by a more economical
and effective method of promotion.

* The possibility of importing medicine, which is cheaper and
more effective.

* The understanding that physicians need not hastily use new
medicines (certainly more expensive) that are not necessarily
more effective than the cheaper, existing pharmaceutical
products.

ADNAN SAID

Jakarta