Indonesia's new and ambitious healthcare program has done little to infuse new money into the country's pharmaceutical industry, partly because of a long-term weakness in the nation's currency, the rupiah, according a review of company reports.
Because of the weakened currency, Indonesian drugmakers faced more expensive raw materials they must import from China, India and elsewhere. The industry relies on imports for 95% of those products, according to an analyst quoted by The Jakarta Post.
The public filings of the companies represent a mixed bag, with Indonesia's largest drugmaker, PT Kalbe Farma reporting a 6.9% growth in its net profit last year while PT Merck, the Indonesian unit of Merck KGaA, experienced a steep decline in the growth of its net profit last fiscal year, boosted by only 3.5% versus 62.7% the previous year.IPMG Chairman Luthfi Mardiansyah
Even with the exchange-rate problem, the industry's International Pharmaceutical Manufacturers Group (IPMG) suggested a slow response to the healthcare program launched last year also was responsible for drug companies reporting lower revenues than had been projected for last year.
IPMG Chairman Luthfi Mardiansyah told the newspaper the annual spending on drugs was low last year, amounting to just over $15 per person and medical treatment overall just over $83 per person.
In the program's defense, its rollout is being phased in and not expected to be fully operational for another four years.
- here's the Jakarta Post story