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Problems Facing Indonesia's Pharma Sector

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Problems Facing Indonesia's Pharma Sector
Environmentally, Indonesia is particularly prone to natural disasters, as the recent earthquakes, tsunamis and volcanic eruptions have illustrated. Politically, a dominant feature of President Yudhoyono’s presidency has been to curb the corruption that has so frequently plagued Indonesia.
Economically, Indonesia’s economy is projected to become the sixth largest in the Asia Pacific region by 2017, but if the rupiah continues to devaluate against the dollar it could affect the Indonesian pharmaceutical market in US dollar terms, notes a new report from Espicom.
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Legally, Indonesia remained on the US Trade Represenative’s Special 301 Priority Watch List in 2011, due to the prevalence of counterfeit pharmaceuticals. Demographically, the population will be the third largest in the Asia Pacific region by 2017.
Drugmakers hiked prices by up to 10%
The Indonesian Pharmaceutical Manufacturers Association (GP Farmasi) announced that 20 of its members had increased the price of certain drugs by up to 10.0%, at the start of the 2011. Members of GP Farmasi have raised their drug prices in response to rising inflation, a decision by regional authorities to increase the minimum wage and an import tax imposed on raw materials for drug manufacturing.
In February 2011, the Ministry of Health announced that it would review the prices of generic drugs, in light of the fact that the increase in tax on raw materials has prompted pharmaceutical companies to raise the prices of branded drugs. Many pharmaceutical companies have stated that, in their view, the prices of generic drugs are unreasonably low, the report notes.
Due to the sheer size of the population, Indonesia cannot simply be dismissed. The Indonesian pharmaceutical market is projected to expand at a high single-digit compound annual growth rate (CAGR) in US dollar terms during the

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