General information

Indonesia has five main islands and 13,677 small islands, with an area of 5,193,250 sq. km., 39% of which is land and 61% sea territory. Indonesia is the fourth most populous country in the world, 193 million, with an annual growth rate of 1.34% (1990-93).

The average economic growth rate was 6.8% per annum, while the inflation rate was 8.7% per year during the 1980s. Per capita income has increased from US $70 in 1967 to approximately US $650 by 1993.

Health status

In 1993, mortality rates per 1 000 lives births were given as follows: 58 for infant mortality, 81 among the under fives and 4.25 for maternal mortality. Life expectancy at birth was 62.7 years. Severe protein energy malnutrition was 11.8%.

Health care system

Using the primary health care approach, the National Health System was adopted in 1982. The system, consisting of four levels (central, provincial, district/sub-district, village), includes the referral system to secondary and tertiary levels of services as well as community outreach programmes.

For primary public health care, there were 6 954 health centres, 19 977 sub-health centres, and 6 024 mobile health centres in 1993. The referral system consists of 1026 hospitals (with a total of 114 174 beds) in the districts and major cities. Decentralized administration is encouraged. Health services are provided by 14 072 physicians (1993), 4 635 dentists (1993), 114 712 nurse/midwives (1993), 6 245 pharmacists (1992), and 39 908 assistant pharmacists (1992).

The National Drug Policy

The Indonesia National Drug Policy was established in 1983 with the objectives of ensuring availability of quality drugs, equitable distribution, efficacy, safety, as well as rational use of drugs.

Implementation of National Drug Policy

Drug evaluation

Drug registration and evaluation include pre-marketing drug evaluation, re-evaluation of 13 000 marketed drugs and evaluation and supervision of clinical trials. Adverse drug reaction monitoring is also carried out based on voluntary reporting.

Implementation of National Essential Drugs List (NEDL)

The fifth edition of NEDL consists of 320 active substances with three different lists of essential drugs according to the level of health facilities: 320 for hospitals, 167 for community health centres and 32 for village drug depots.

Drug supply management

To ensure the timely supply of low-cost but high-quality essential drugs, the Ministry of Health (MOH) appointed Government owned companies as the main suppliers of essential dugs. The prices of essential drugs are controlled by the Government. In addition, use of generic drugs in the public health facilities is mandatory. The Government regulated the production of drugs by 51 manufacturers and also the distribution of generic drugs.

In order to improve drug supply management for PHC in the public sector, a District Pharmaceutical Warehouse (GFK) was developed in every district to carry out functions of drug supply, from planning based on the needs of health services, drug management, monitoring of drug accessibility and availability in health centres, to quality maintenance of the stocks. There are around 300 GFKs throughout Indonesia. Being an executing unit of the District Health Office (DHO), GFK assists the DHO in coordinating the supply of drugs originating from different budget sources, to ensure a timely and regular distribution to health care services in the districts according to actual need.

Drug distribution and pharmacy services

The distribution network is made up of private sector outlets as well as public sector units. In 1992, drug distribution was carried out by 293 GFKs, 1 173 wholesalers, and 3 520 pharmacies/dispensaries.

Quality assurance

Implementation of Good Manufacturing Practices (GMP) was started in 1971 and revised in l988 on three basic elements of quality assurance: legal, regulatory and technical aspects.

The Indonesian Pharmacopoeia clearly describes the methodology for quality control testing, quality specification requirements and other quality regulation of finished products and raw materials.

Rational use of drugs including control on drug labelling and promotion

High priority is given to improving rational use of drugs. A Standard Treatment Guide for Health Centres and a National Drug Formulary for Over-the-Counter (OTC) Drugs have been developed. A National Drug Formulary for health professionals and materials for improving drug counselling are being developed.

Regulation requires that drug information on labels or promotional materials for drug advertising must conform with criteria of objectivity and completeness and should be unbiased. Drug products to be promoted must be registered and approved for marketing by the MOH.

A guideline on drug advertising was established in 1994, based on the WHO Ethical Criteria for Medicinal Drug Promotion and adapted to meet Indonesian needs. Advertisements on OTC drugs can only be made after obtaining approval from the MOH.

Generic Drug Programme

Drug coverage in Indonesia is similar to PHC coverage. To improve drug accessibility, the MOH promotes the use of generics. The Generic Drug Programme was launched in mid-1991. The quality and price of generic drugs are strictly controlled by the MOH and public health facilities are obliged to use them. Table 1 shows increasing use of generic drugs from year to year.

Table 1. Increase in the use of generic drugs

Economic strategy for drugs: user charges

Indonesia has a system of user charges for public health services in both hospitals and health centres. The MOH sets a very low uniform fee for health centre services across the country (Rp. 300 or about US $0.12 per visit). This was designed to make the health centres affordable to the general population, so these services are heavily subsidized. For the hospitals, central Government hospitals follow fee schedule guidelines issued by the MOH. Even though provincial and district hospitals are expected to conform with these guidelines, the responsibility for setting fees rests on the provincial or district government.

Health and drug expenditures

Health expenditure

The Gross Domestic Product (GDP) of Indonesia is growing at about 6-7% per year but total health sector expenditure is currently increasing at more than 20% per year. During the early 1990s, private health expenditure increased by 27.6% per year while public expenditure increased only 2.1% annually from 1987-1990. Consequently, the proportion of total expenditure from the private sector increased from 68.8% in 1989 to 79.9% in 1993 and was projected to be 89.5% in 1996 (estimated at US $4.7 billion).

The range of per capita health expenditure varies widely across the income distribution but is relatively constant in terms of percentage of annual income. There is also a marked variation between regions of the country and between urban and rural areas. Total health spending for both public and private sectors is only 2% of GDP, which is about half of that spent in other countries of comparable average income.

The Government health budget system is fragmented. There are various types of budget at the central, provincial, and district levels. Despite a large increase in Government spending on health care, Indonesia's health expenditure for both public and private sources are US $12 per capita, much lower than other countries in the Region (World Development Report, 1993).

Drug expenditure

In 1994, the total cost of drugs for health services, including programmes in the public sector and health insurance, was 20% of US $938 million. This was the figure for total drug consumption. Likewise, the growth of the pharmaceutical market from 1992-1996 was around 20% annually (Table 2). This is more or less at the same level as the growth of health expenditure.

Table 2. Size in million US Dollars and growth of pharmaceutical market, 1992-1996

Drug expenditure constituted about 40% of the country's health expenditure, including public and private sector spending. This was about US $5 in 1990 and drug consumption is among the lowest in developing countries (Table 3).

Table 3. Annual drug expenditure per capita in selected countries, 1990

Source: World Bank (1995)

Drug financing

The total drug budget allocated for PHC services amounted to US $86 million in 1994.

Moreover, the Government provides certain drugs required for some of the health programmes. They include the programme to handle highly prevalent contagious diseases, such as acute respiratory tract infection, diarrhoea and tuberculosis; the programme to handle chronic diseases or conditions, such as goitre and anaemia; the family planning programme; and immunization programme.

It is estimated that 84% of drug financing is derived from private funding and the rest (16%) is from the Government budget. However, drugs procured with the Government budget cover more than 70% of the population through public sector health care units (health centres and other PHC units), which are established across the entire country.

In general, Government control on drug prices is enforced only for the provision of drugs in the public sector and Generic Drug Programme. Essential drugs for the public sector are subsidized through various budgets, mainly the central Government budget, the “Presidential Health Budget” (Table 4).

Table 4. Drug budget for the public sector (Billion Rupiahs)

The rationale for the high proportion of central Government budget used for drug procurement is to ensure more equitable access to drugs across the country.

Drugs for public sector PHC are mainly provided free to the community through Government subsidy. Subsidized essential drugs for PHC are distributed to 6 954 health centres and 19 977 auxiliary health centres throughout Indonesia to provide primary health services. The drugs provided for PHC and related referral services are based on the NEDL covering the needs forecast by the health centres at district level, using a dual planning approach, the consumption and the morbidity pattern, and integration of various budget sources.

Besides the free drugs provided through primary health services in the public sector, a Government health insurance has been developed, based on civil community participation, to provide drugs for civil servants and their families.