Drug labeling implemented in stops and starts

Hera Diani, The Jakarta Post, Jakarta

Members of the public are still digging deep into their pockets to pay for drugs, said to be most costly in the region, with the health minister and pharmaceutical industry disagreeing over when to implement price labeling.

In a bid to prevent price gouging and make health care more affordable, Health Minister Siti Fadillah Supari issued a decree on Feb. 7 requiring drug producers to label each product with the highest retail price set by the minister.

Although the decree took effect Monday, the chairman of the Indonesian Pharmaceutical Association, Anthony Sunarjo, said Tuesday the organization had asked the health minister to give its members until the end of the year to fully implement the decree’s requirements.

“We have discussed it and agreed to implement it gradually. It’s because the whole process requires extraordinary adjustment, like changing the new products, returning the drugs to the factories and so on,” he told The Jakarta Post on Tuesday.

On July 1, the association sent out a release to its members, confirming the gradual schedule of implementation and issuing a new price list for branded generic drugs.

The association said that drug distributors would inform retailers of the drug prices by Sept. 1, and that pharmacy retailers would not change prices until Oct. 1.

Retail prices set by the association, however, are higher than those mandated by the Health Ministry.

The decree stipulated that the new retail price listed on the price label would be the drugstore net price (HNA) plus the 10 percent Value Added Tax and a 25 percent margin for the drugstore.

The pharmaceutical industry factors in other variables to the price.

“We formulate the price ourselves because the health minister never discussed the price with us,” said Anthony.

The head of the Food and Drug Monitoring Agency, Husniah Rubiana Th-Akib, said the retail price set by Health Ministry was already a compromise and the pharmaceutical industry could not set its own price.

“The Health Ministry team worked on the price list for a year. But the pharmaceutical industry thinks the prices are too low, whereas we have factored in every cost, such as production and packaging, and we have also added the profit margin. The health minister then took the average price,” she told the Post.

Husniah, who was included in the team, said that if the industry persisted in setting its own price, sanctions could range from warnings to withdrawal of licenses.

“The industry cannot postpone the implementation. We’ve already said that they can still sell old stock until it runs out. But they should have started providing products with the new prices as of Monday,” she said, urging consumers to request drugs with the labeling.

“Why object (to the decree)? What have they done so far? Maybe the industry has been enjoying a very high profit all along …”

Anthony denied the common view the pharmaceutical firms reaped huge profits.

“You can just refer to the financial reports of companies who have gone public,” he said.