Healthy Skepticism Library item: 14675

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Grogan K.
Pharma must invest in Indonesia or push off, says health chief
PharmaTimes 2008 Nov 24
http://www.pharmatimes.com/WorldNews/article.aspx?id=14814

Full text:

Indonesia may represent the type of emerging market drugmakers are looking to get stronger footholds in but if they do not invest in setting up proper facilities in the country, they can take a running jump.

This would appear to be the message from Indonesian Health Minister Siti Fadilah Supari who told Dow Jones Newswires that if pharmaceutical firms want licences to sell their products, “they have to invest here also, not just take advantage of the Indonesian market.” She added that “they can’t just operate like a retailer here, with an office size that’s three metres by three and make billions of rupiah. That is not fair”.

A decree was introduced in Indonesia earlier this month which is designed to encourage foreign companies to transfer technologies to the country which will boost investment and create jobs. Dow Jones noted that the move affects 13 pharmaceutical firm that currently sell their drugs in Indonesia but do not have production facilities there – these include Wyeth, Eli Lilly, Merck & Co, Roche, Servier, Novo Nordisk, AstraZeneca and Astellas.

Under the new rules, foreign companies have a two-year period of grace in which to set up production facilities. The move prompted a letter from the chief executive of the US Chamber of Commerce, Thomas Donohue, to President Susilo Bambang Yudhoyono, urging him to “consider revising the decree”.

However Ms Supari does not seem inclined to countenance a revision. She believes the Indonesian pharma market, which is worth around $2 billion a year, will persuade the companies that building facilities is worthwhile. Those that do not would be banned from selling their products or distributing them through companies that do have plants in Indonesia.

“If they want to go away, go ahead,” she told Dow Jones, adding that India and China have already taken similar steps. It was reported that there are 29 international pharmaceutical companies marketing their products in Indonesia, with a market share of 25% and the minister said the new rules will give “fair treatment” to pharmaceutical companies that have already invested in facilities.