Drug prices in Indonesia are alarmingly higher than neighboring Malaysia, with costs soaring three to five times, sometimes reaching up to 500% more. This steep price discrepancy has prompted urgent government intervention.
Health Minister Budi Gunadi Sadikin recently announced directives from President Joko Widodo to make medical equipment and medications more affordable. Speaking after a high-level meeting on health industry tax relaxation at the Presidential Palace on Tuesday (2/7/2024), Budi detailed the President’s instructions aimed at equalizing drug prices with those in Malaysia.
“The difference in drug prices in Indonesia is 3 to 5 times compared to Malaysia, sometimes even 300% to 500%,” Budi revealed to the press.
President Jokowi has emphasized the need for Indonesia to develop a robust domestic pharmaceutical and medical equipment industry. This strategy is seen as essential for ensuring the country’s resilience, particularly in the face of future pandemics.
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Budi attributed the high prices to inefficiencies in the trade process, stressing the need for transparent and open trade governance to prevent unwarranted price spikes. “We must streamline the trade process for medical goods to avoid unnecessary cost inflations,” he stated.
Addressing these issues requires a coordinated effort across various ministries. Budi highlighted that synchronizing regulations is critical. He pointed out inconsistencies such as a 0% import duty on ultrasound machines while components like screens and electronics are taxed at 15%.
Moreover, Budi advocated for the government to shift from importing medical equipment to building domestic production facilities. For instance, with the government’s demand for 514 cath lab units across districts and cities, he suggested this could be an opportunity to establish local manufacturing. “We should capitalize on the need for cath labs by setting up production facilities domestically,” Budi concluded.
The urgency of this initiative is underscored by the government’s broader health strategy, aiming to make healthcare more accessible and affordable for all Indonesians.
