Providing quality and affordable medicines for the successful implementation of universal health care (JKN) in Indonesia

19 Jun 2017

Access to affordable, good quality medicines is critical for the successful implementation of universal health care (JKN) in Indonesia and poses a major challenge to the government which is responsible for meeting the demand for medicines of the 180 million participants of JKN. In addition, JKN also has to deal with a diverse set of health challenges ranging from infectious diseases (e.g. dengue, malaria), to chronic diseases (e.g. diabetes, heart disease, cancer) to malnutrition and stunting among children. Health care delivery is also characterized by logistic, budgetary, informational and human resource constraints, and a shortage of quality medicines.

As part of the introduction of JKN, the Indonesian government, through the LKPP (National Public Procurement Agency), introduced a system of tendering for medicines based on the National Formulary. Several tendering exercises has resulted in a massive reduction in the price of medicines, with further price reductions anticipated in the future.

While price reductions of medicines have been very significant, and are clearly to be welcomed, this system has resulted in a set of concerns and challenges which need to be addressed.

First, providers of pharmaceutical products have expressed concern that the tendering process has been too aggressive and perhaps overly focused on price reductions, and that further price reductions will have unwanted repercussions on medicines supplied. This includes compromised quality, safety concerns, the potential for medical complications, and reduced efficacy of medicines which, in turn, may result in longer hospital stays and recovery times for patients. These undesirable ramifications will also have broader, longer-term implications in increased stress, pressure and costs on an already fragile health care delivery system and may, in turn, reduce public confidence and trust in the efficiency, value and sustainability of the JKN.

At a global level, balancing affordability and access with maintaining quality has been a challenge for many developing countries that are implementing universal health coverage. For example, some key essential medicines, such as the antibiotic penicillin or methotrexate for cancer, are disappearing from the market globally due, in part, to prices that have become so low that it seems no longer commercially viable for manufacturers to supply them. In this regard, five areas have been deemed crucial by an international commission to ensure access to medicines: (1) paying for a basket of essential medicines; (2) making essential medicines affordable; (3) assuring the quality and safety of medicines; 4) promoting quality use of medicines; (5) developing missing essential medicines.

There is therefore a general feeling that new approaches are needed for setting prices of medicines which takes into consideration factors which drive pricing strategies for new medicines as well as what the market requirements are to retain disappearing essential medicines of high quality at reasonable and affordable prices. Another key factor relates to what is necessary for pharmaceutical companies to maintain a viable commercial model.

Second, and as a means of overcoming some of the concerns mentioned previously, there is a need for better coordination among the many stakeholders involved in the JKN implementation process which include the Ministry of Health (KemKes), the National Public Procurement Agency (LKPP) and the Indonesian Agency for Drug and Food Control (BPOM). Dialogue, coordination and harmonization of actions between these agencies, in close consultation with national pharmaceutical manufacturers, who are the key suppliers of medicines for the JKN, would go a long way towards developing a rational strategy and policy for access to affordable, quality medicines and thus ensure the sustainability of JKN in the longer term.

Third, and going beyond better coordination among key government agencies, how can we ensure that quality standards for medicines are not compromised in the pursuit of low prices? How do we ensure that those who win the tender actually deliver the products and maintain future supplies to avoid ‘stock-outs’ of key medicines? In this regard, there is an urgent need for an effective monitoring and evaluation system which is coupled with the ability to impose punitive measures and punishment for offenders. Monitoring would include, for example, adherence to good manufacturing practices (GMP), batch to batch bioequivalence (a component of ‘therapeutic equivalence’ or efficacy of a medicine), as well as the safety standards set by the World Health Organization (WHO).

Finally, and at the heart of the matter, is the survival and sustainability of the national pharmaceutical industry itself. Poor coordination among key government agencies, and continued price reductions to commercially unsustainable levels, may compromise the ability of national manufacturers to maintain quality and supply of medicines and to generate much needed capital for re-investment in manufacturing facilities, quality control processes, distribution networks and R&D activities. Such a state of affairs, in turn, risks these national manufacturers becoming takeover targets for acquisition by foreign pharmaceutical companies.

In shaping the Indonesian government’s future policies and strategies for sustainable medicines provision for JKN, it is important to highlight to the government the key challenges of balancing affordability while maintaining quality of medicines, of the need for better coordination among key agencies, maintaining supply of medicines, and having an effective monitoring and evaluation system for access to medicines. Importantly, the government must be committed to ensuring the survival and growth of the national pharmaceutical industry. Open and frank dialogue and collaboration between the government, manufacturers, academia, civil society, consumer groups and other stakeholders is needed to deal with this critical issue.

Tikki Pangestu

Visiting Professor