Why Are Medicines Expensive Lately? Here's What the Health Minister Says
Health Minister Budi Gunadi Sadikin stated that the potential for drug price increases due to the weakening of the rupiah against the US dollar is calculated based on the proportion of imported raw materials in the production cost structure. Therefore, he said, drug price increases do not automatically follow the overall exchange rate movement.
Budi explained that drug prices are composed of several cost components, and not all of them are affected by the dollar. He noted that a large portion of production costs still come from domestic components such as operations and labour.
“For example, as discussed earlier, the largest operational cost is salaries, and salaries are not in dollars, are they? It is the raw materials for the drugs that are in dollars,” Budi said on Thursday (25/6/2026).
He then illustrated a simulation of the exchange rate’s impact on drug prices. According to him, the influence of the dollar only applies to the portion of raw materials that still depend on imports.
“For instance, suppose the cost of raw materials is 30 percent of the total drug price. Of that 30 percent, maybe 80 percent is imported. So, 80 percent of 30 percent is 24 percent. If the dollar rises by 15 percent, you calculate 15 percent of that 24 percent. That means the impact on the price should only be around 3 percent,” he said.
Budi stated that the Ministry of Health has already performed this calculation and used it as a basis for discussions with the pharmaceutical industry to ensure that any price adjustments remain proportional.
“This has been calculated by the Ministry of Health, and we are discussing it with the industry so that the increase is reasonable. Prices should not suddenly jump by 100 or 200 percent,” he said.
He stressed that exchange rate fluctuations cannot be used as a direct justification for excessive price hikes, as the affected component is only a small part of the total production cost.
“To put it bluntly, ‘Sir, the dollar is up.’ But why do you want to raise prices by 100 to 200 percent? If the dollar component is only 5 or 10 percent, the increase should be a maximum of 5 to 10 percent,” he concluded.
Previously, the Ministry of Health had mentioned the possibility of drug price increases due to rupiah exchange rate fluctuations against the US dollar and rising oil prices. However, the ministry claims that any increase will remain within reasonable limits and will not spike sharply.
“Prices of medicines for the National Health Insurance (JKN) programme are confirmed not to increase and will be maintained,” the Health Minister said in a statement on Sunday (14/6/2026).
The ministry has made efforts to ensure that medicines used by the Healthcare and Social Security Agency (BPJS Kesehatan) do not experience price hikes.
Budi explained that the increase in the dollar exchange rate does not automatically cause drug prices to rise by the same percentage. This is because the majority of drug production cost components in the country still use the rupiah.
Therefore, the government has calculated a reasonable limit for price increases. According to Budi, an increase in the range of 10 to 20 percent is still considered reasonable. Anything above that is seen as an attempt to take unfair profits.
“Ten to 20 percent is still reasonable. But if it is above that, do not take advantage of the situation,” Budi said.