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eventeen of the 38 pharmaceutical companies in East Java have yet to meet international drug production standards, making them vulnerable in the tough business competition to come with the free ASEAN market next year.

East Java chapter Pharmaceutical Business Association head Paulus Totok Lucida said the 17 pharmaceutical companies were medium-sized companies with working capital of below Rp 20 billion (US$1.65 million). The remaining companies that applied international standards were mostly foreign investors.

'€œFulfilling global standards is necessary because it enables domestic products to be traded in other countries. However, in reality many companies have yet to apply international production standards,'€ Paulus told The Jakarta Post recently.

He said the products manufactured by the 17 pharmaceutical companies were safe for consumption based on local standards.

'€œMost of their products, which are in the form of capsules and pills, have gone through tests at the Health Agency and Food and Drugs Monitoring Agency (BPOM) and are fit for sale in the local market. However, these products cannot be sold overseas,'€ said Paulus.

He said the companies generally could not afford additional production costs to meet international standard requirements.

'€œFor example, the international standards are very strict about products being 100 percent free of air content. To achieve this, a company must invest in equipment valued at more than Rp 2 billion,'€ said Paulus.

He added the government required pharmaceutical companies to meet good drug production standards by the end of the year and suggested that the medium-sized companies merge with other companies. To date, none of them has implemented this suggestion.

Paulus expressed hope that the government would provide facilities, such as credit loans, to the 17 pharmaceutical companies.

'€œCurrently, the domestic pharmaceutical companies are competing closely with Vietnam to seize the market when the ASEAN Economic Community is implemented next year,'€ he said.

Meanwhile, Bambang Prajogo, an award-winning researcher from the Pharmaceutical Faculty at Airlangga University, said pharmaceutical companies offering international standard products would not only tap the global market, but also strengthen market share in the domestic one.

'€œAt least, the companies will not lose against domestic competition when the ASEAN Economic Community comes into effect in 2015,'€ he said on Thursday.

He said the government could also help develop the industry by supporting pharmaceutical research, which generally required a long time and significant funding to complete.

'€œIn order to produce a vaccine, a pharmaceutical company has to hold around 12 to 13 years of research, which is also expensive,'€ he said.

Paulus said domestic market growth for the pharmaceutical industry last year was between 9 and 12 percent. This year'€™s growth is aimed at between 13 and 14 percent.