The impact of Indonesian generic medicine pricing policy on medicine prices

Abstract

Introduction: The government of Indonesia has established a commitment to the provision of affordable medicines. The retail price of unbranded generic cannot exceed the maximum retail price set by the Ministry of Health. The generic medicine pricing policy that has been implemented by the Indonesian government must be evaluated. Objectives: To evaluate the impact of the generic medicine pricing policy on the price of selected medicines and to measure the differences between the prices paid by patients for unbranded generic medicines and the maximum retail price. Method: The study design was a cross-sectional survey and policy evaluation. Medicine prices were measured in 2010 at nine public hospitals, 64 private pharmacies, and nine non-governmental organisation hospitals in four provinces in Indonesia. The price of the lowest price generic (LPG) and innovator brand (IB) medicines in 2010 was compared to the price of the medicines before policy implementation. The results from a 2004 survey conducted by the Indonesian National Health Research Institute and Health Action International were used as the baseline data for the comparison. The price of unbranded generic medicine paid by patients was compared to the price in the generic medicine pricing policy 2010 edition. Results: The results indicated that the price of LPG and IB medicines was lower in 2010 than in 2004. The decline was approximately 40% to 2200%. Wide variations were observed in the excess of the unbranded generic medicine price paid by patients compared with the maximum retail price from the Ministry of Health, exceeding the maximum price by approximately 2% to 600%. Conclusion: Generic medicine pricing policies have succeeded in lowering the price of unbranded generic medicines. The price of IB medicines has declined but remains high compared to the international reference price. The prices paid by patients for unbranded generic medicines are more expensive than the maximum prices in the policy.