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Indonesia's currency bind leads to imported-medicine shortage

Source
Wall Street Journal - February 4, 1998

By Jay Solomon and Kate Linebaugh

Jakarta – The world's fourth-most-populous country is running out of medicines.

As with all imports here that must be paid for in dollars, Western drugs and pharmaceutical raw materials have become so expensive in local-currency terms that many types of medicines are simply disappearing from the market, health professionals say. Unless remedial action is taken soon, says Wisnu Katim, director general of Indonesia's Drug and Food Control Authority, the nation will run out of many medicines by as early as April.

"Lives are being put at risk because many people can't afford the 300% to 400% increase in [health] costs," says Steven Batts, an executive with pharmaceutical company PT Prima Adiahusada.

Dialysis problem

Already, on the island of Bali, four people have died after discontinuing kidney dialysis because of the escalating costs, Indonesian newspapers reported. Though Indonesia's currency, the rupiah, has plunged 76% against the dollar since July, the cost of kidney dialysis has soared nearly 400% because of the treatment's heavy dependence on imported equipment, supplies and fluids.

"You can start digging graves for [many more] dialysis patients in the next several weeks," says one Western doctor practicing here.

The crux of the problem is that Indonesia, despite its immense natural wealth, has done little to develop an indigenous pharmaceutical industry. Instead, the country has paid out some $900 million a year for medical imports, including heavy payments for foreign-drug patents and raw materials for Indonesia's drug factories. In all, 80% of every Indonesian-made medicine is imported.

"The real problem is government policy," says Azrul Azwar, president of the World Medical Association and a member of Indonesia's parliament. "We have never taken seriously suggestions that we need to produce raw materials [for medicines] domestically. With the rupiah lower now, we're suffering."

Search for a vaccine

A young father named Made is heartbroken after searching for days for some hepatitis-B vaccine for his one-month-old daughter. The pharmacist at one of Jakarta's best medical clinics told him it had run out weeks ago. "If you find any," the pharmacist said, "let me know." Finally, Made asked a friend in Singapore to fly in with the injection on ice.

Jakarta pharmacists and hospitals report shortages of some of the most common drugs, such as amoxycillin and paracetamol, used to cure everything from the common cold to respiratory infections. Even medical staples such as disposable syringes and X-ray developing solutions are scarce, they say. Indonesians are buying much larger quantities of locally made generic drugs these days, they add. But drug-industry executives worry that local manufacturers can't survive the skyrocketing costs.

Industry analysts say as many as half of Indonesia's 240 pharmaceutical producers have ceased operations in recent months, and that the remainder have cut back output by as much as 70%.

Eha, a Jakarta secretary at a tea company, spent hours this week shuttling among pharmacies looking for the common, broadbased antibiotic amoxycillin as well as some blood-pressure medicine. She's lucky, she says, because at least she can afford to buy the drugs. With stocks of the cheaper generic medicines shrinking, she says, people such as her driver are being forced to buy on the black market or are resorting to traditional, herbal-based medicines.

"When you're sick, you have to do something," Eha says. "Traditional medicines are a last resort."

Possible solution

The government is reviewing proposals to bring down drug costs by organizing purchasing cartels to import raw materials for drug factories in bulk. Last month, the Ministry of Health approved a plan by Prima Adiahusada to coordinate bulk buying. By prioritizing life-saving drugs, cutting out frills, and doing bulk purchasing, a Prima Adiahusada executive estimates retail drug prices can be brought down by about 40%. He warns, however, that these steps must be taken immediately.

"We have two months before the country runs out of drugs – no medicines, no needles, no health care," this executive says.

The government itself is considering importing emergency medical supplies. But with President Suharto having pledged to the International Monetary Fund to stick to an austere budget, a buying spree is difficult. Many in Indonesia's health-care industry, however, say there may be no other choice. "At the moment, the real problem is that the government isn't providing enough medicine," says Does Sampoerno, a professor at the University of Indonesia's school of public health. "Without any drugs you are letting people die, and isn't that the same as killing?"

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