The Prices People Have to Pay for Medicines in Indonesia
(2005; 62 pages)

The National Institute of Health Research and Development of the Ministry of Health has carried out a field study to measure the prices and availability of medicines using the WHO/HAI price measurement methodology. Data on the prices and availability of 42 medicines were collected in the public, private for-profit and other sectors in six provinces.

The study took place in one municipality and one district in each selected province. The cost of treatment was calculated for 12 treatments and compared to the daily wage of the lowest paid unskilled government worker. The price analysis was limited to 33 medicines, while the other 9 medicines are to be analysed separately as a component of TRIPs study.

The results show that in Indonesia, the prices of medicines are high and with small variation between public and private sector and between regions. In general, the prices of the innovator brand products were much higher than international reference prices; on average they were more than 20 times higher. They were also about 2-7 times higher than the most sold generic equivalents and, in some cases, more than 10-15 times higher. The lowest price generic equivalents were also expensive. In public procurement for primary healthcare prices of generics were found to be on average 74% higher than the international procurement prices. The patient prices in public hospital pharmacies and in private for-profit sector (private retail pharmacies and private hospitals) are almost identical.

Affordability analysis showed that treatment of diabetes with innovator brand glibenclamide from a private pharmacy would require 8.4 days’ wages to pay for a month’s supply. In contrast, treating diabetes with generic glibenclamide is less than tenfold as expensive, requiring 0.6 days’ wages in both public and private pharmacies. A week’s treatment for pneumonia would require 1.5 days salary to pay for innovator brand amoxicillin, 0.4 days for a generic.

The principal conclusions of the study are as follows: Prices are high compared to international reference prices in public and private pharmacies and there are large differences between innovator brand and generic equivalent products. The prices of generic medicines vary and the cheapest generic equivalent is not always the most sold. The availability of medicines in public sector, especially in public procurement, is far from optimal. This could be due to a restricted list being used in public sector and not corresponding well with the list of medicines surveyed. The price difference between what patients pay in public and private sectors are small. Generics are widely available in all sectors and the prices are much lower than innovator brand products making treatment more affordable for most people but we do not know whether they are being promoted and sold as often as they should. The prices vary little across regions in Indonesia and suggests that distribution and transportation cost have little influence on final price. Indonesian public health sector is inefficient in procurement as prices obtained are on average almost two times the international procurement prices.

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