Indonesia turns to Bio Farma to ramp up vaccines output as health spending soars

SINGAPORE--Indonesia has long been active in providing vaccines to other developing countries, but now finds itself in a bind and turning to its state-owned and century-old pharmaceutical company, Bio Farma, to solve the nation's own growing need for vaccines.

Jokowi Widodo

At the start of 2014, the country launched an ambitious plan for universal health insurance coverage, laying out $4.2 billion for an initial phase, leading to increased demand for generic drugs, vaccines and services. The new government of President Jokowi Widodo that came to power last year has also expanded the offerings, looking to leverage spending to cover potential massive demand in the archipelago of more than 17,000 islands and 250 million people.

About 35 million more Indonesians are expected to join the National Health Insurance program this year, officials have said.

The company, established in 1890, had been relying for the past 35 years on health-care development aid from the European Union, since 2003 largely funneled through the Global Fund. That fund alone has supplied a total of $650 million to Indonesia, according to a EurActiv report.

In recent years, Indonesia also has been receiving funds from Gavi, an international organization that began with a focus on vaccines for HIV/AIDS. Indonesia's agreement with Gavi expires next year.

As a government agency relying a lot on those types of funds, Bio Farma had exported 60 percent of the vaccines it made, leaving 40 percent to meet domestic consumption. Now it faces the need to at least reverse those percentages.

In an interview, Rahman Rustan, corporate secretary among company executives who work largely independent of the government, said Bio Farma's usual practice was to fulfill Indonesia's needs and then meet its fund obligations to distribute to other countries that lack vaccine-making facilities, so its excess capacity was committed.

Now, Rustan told EurActiv, Bio Farma will need to collaborate with other drug makers such as international giants GlaxoSmithKline ($GSK) and Sanofi ($SNY) to satisfy the needs of its own large population with many "dynamic" diseases. That requires preparation for the future, he said, and that in turn requires research.

Indonesia faces a need for many new vaccines still in development and requiring new technology, Rustan said. At present, the nation's biggest need is for preventatives against not only HIV/AIDS, but also malaria and tuberculosis.

- here's the story from EurActiv