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Jakarta Post

Medicine prices could soar 60% on raw material disruption

  • Yunindita Prasidya

    The Jakarta Post

Jakarta   /   Wed, April 29, 2020   /   06:04 pm
Medicine prices could soar 60% on raw material disruption Illustration of drugs. (Shutterstock/ustas77777)

Medicine prices could soar up to 60 percent in Indonesia as pharmaceutical companies struggle with a significant surge in production and distribution costs due to the COVID-19 pandemic, an association has warned.

Indonesian Pharmaceutical Association (GP Farmasi) chairpman Tirto Kusnadi told The Jakarta Post on Wednesday that the price hike might be 40 percent for fast-moving medicines that were in high demand and quickly sold, and 60 percent for slow-moving medicines.

Tirto explained that the possible price hike was due to the soaring cost of raw materials and distribution that so far had tripled and quintupled from normal levels, respectively.

“Many airlines are grounded or are not allowed to fly, hence, [our] members fight over flights or vessels. [This leads to] airlines and shipping companies increasing their prices,” Tirto said during a virtual hearing with House of Representatives Commission VI, which oversees trade, industry and state-owned enterprises (SOEs), on Monday.

The association is of the view that the drastic increase in the cost of producing and distributing pharmaceutical goods will eventually affect consumer prices.

“The price of medicine in the market will rise because the price of raw materials that we import and the cost of transportation have soared,” Tirtosaid.

Furthermore, GP Farmasi executive director Dorodjatun Sanusi said rising demand and the depreciating rupiah against the US dollar had also added to the cost calculation.

Dorodjatun warned about potential problems if the pharmaceutical products’ prices remained at the current level.

“[We] may be able to produce and distribute, but [we] will not be able to buy any more materials,” Dorodjatun said as quoted by Tempo.

Dorodjatun noted that the country's attempt to build a more resilient industry by issuing Presidential Instruction No. 6/2016 on the acceleration of pharmaceutical industry development and healthcare tools and equipment had yet to result in significant change.