Indonesian pharmaceutical companies remain optimistic that they’ll be able to boost sales by 7.6 percent next year despite facing pressure over cartel allegations and a potential reduction in government protection.
The manufacturers eye Rp 70 trillion in sales next year, from an estimated Rp 65 trillion this year, Darojatun Sanusi, executive director of the Indonesian Pharmaceutical Association (GP Farmasi) said in a recent interview.
“Demand for drugs and vitamins from national healthcare insurance, or JKN, would serve as the main driver for the increase,” said Darojatun.
The association accounts for around 70 percent of Indonesian pharmaceutical companies, according to estimations from the country’s anti-monopoly body, the Business Competition Supervisory Commission (KPPU).
The remaining market share is divided by foreign pharmaceutical firms that operate in Indonesia.
The antitrust body has just launched a probe into allegations of cartel-like operations among the pharmaceuticals, following complaints about drugs’ persistently high prices.
“The price of our drugs is quite high,” said Cabinet Secretary Pramono Anung. “The president want to push the pharmaceutical industry to become more efficient.”
He added that the government intended to make the companies more competitive by gradually reducing subsidies and other protective measures.
While government does not provide direct subsidies to pharmaceutical companies, it sets aside funds for universal health insurer BPJS Kesehatan, allowing patients get the drugs for free or at very low price.
GP Farmasi’s Darojatun however argued that the firms have no more room to cut prices as they depend on imported raw materials, which become more expensive as the rupiah weakens against the US dollar.
The country’s currency has lost more than 13 percent of its value trading against the greenback this year, as investors shifted their portfolio away from emerging markets to dollar-denominated instruments.
Dorojatun said 80 percent of pharmaceutical companies’ raw materials are imported, so the only way the government would see a decline in prices is by encouraging more investment in those areas, he said.
“Our drugs are as cheap [as they can be],” he said.
Source: Jakarta Globe | 17 Dec 2015