Indonesian pharma hit by currency

Most local pharmaceutical companies in Indonesia are still facingdifficulties due to the rupiah's continued slump against the US dollar, according to Darya-Vaha Laboratoria president Philip Townsend, who added that "the sharp depreciation of the rupiah had caused a sharp increase in operating costs."

However, he went on to point out, "most drug producers could not raise prices to offset the high costs. We are forced to maintain the drug prices because, if we raised them, then people would not be able to afford them." Around 95% of raw materials for drugs are imported. Darya-Varia, 75%-owned by Holland Pacific, expects to achieve a 15% increase in sales this year from the 431 billion rupiah ($380.1 million) recorded in 2000.

Earlier this year, the Indonesian government allowed local drugmakers to raise the prices of generic drugs by an average 19.8% (Marketletter May 28) although, following the abolition of a subsidy, the industry had called for a 40%-48% hike. At that time, the Indonesian Consumer Foundation warned that the price rises would put an unfair burden on the poor.