Alfida Rizky Febrianna, Jakarta – The Indonesian Medical Association (IDI) recently blamed the high drug prices on the country's high reliance on imported pharmaceutical raw materials.

Prices of medicine in Indonesia can be five times more expensive than those in other countries. According to IDI, the reason why medicines are so expensive is because Indonesia imports 90 percent of its pharmaceutical raw materials.

"Because we highly import pharmaceutical raw materials, our production capacity greatly depends on other countries.... And there are import duties, which eventually affect the final price of the medicine," IDI's board chairman Mohammad Adib Khumaidi said.

Adib said raw materials could make up between 20 and 25 percent of the total costs to make a medicine. Packaging costs can reach up to 10 percent, while the remainder of a medicine's price is influenced by distribution, marketing costs, and the producer's profit margin.

IDI is also calling for the government to get rid of the obstacles in the medicine trade. For instance, the customs office can improve its services to prevent inefficiency in imports. The government can also cut the bureaucratic red tape related to taxes and the trade infrastructure.

"These are all things that will affect the price which the consumers have to pay.... This calls for government intervention, among others, through the non-tariff policy to regulate the prices. So we can lower the prices of medicine," Adib said.

Source: https://jakartaglobe.id/business/idi-blames-soaring-medicine-prices-on-raw-material-impor