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Drug self-sufficiency goals: How can policymakers plan better for the long-term
The new public procurement policies that are currently in effect impose import substitution and will gradually squeeze international research-based companies out of the Indonesian market.
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Self-sufficiency goals: A lecturer of the Bandung Institute of Technology (ITB)'s School of Life Sciences and Technology program reportedly has conducted research on anti-HIV drugs using Indonesia's own biological resources. (Shutterstock/File)
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otwithstanding the overwhelming (85 percent) market share of its domestic players, Indonesia is on a quest to become self-sufficient in drug manufacturing.
While the COVID-19 pandemic did amplify the country’s excessive import dependence for active pharmaceutical ingredient (API) (up to 90 percent), the underlying structural causes for such a situation have gone largely unaddressed.
Over the past 20 years or more, advantageous policies have allowed Indonesian companies to import bulk drugs from China and India (cheaper by 30 percent on average, compared to domestic products) uninterruptedly and to take up the lion share at the expense of the local industrial competitiveness.
As a matter of fact, local players had no reason to buy into the production of API, or to set up fermentation units. Policies such as the Health Ministerial Decree No. 1010/2008 on drug registration and public procurement protectionism, allowed them to gain greater sales without investment.
In light of the above, assessing and analyzing both the structure and the performance of local firms should be the starting point of the country’s plan for self-sufficiency in drug manufacturing.
In my view, instead of the current blanket policy approach (TKDN), such a plan should take into account the specificities of the pharmaceutical industry, as well as the supply- and demand-side issues. Likewise, the supply-side analysis needs to cover all links in the industry chain, from research and development to the production and distribution of vaccines and medicines.
On the demand side, the plan for self-sufficiency in drug manufacturing would gain a lot by paying special consideration to the public primary healthcare system and its role in strengthening the access to affordable vaccines and medicines.
