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COVID wake up call for Indonesia to improve medical industry capacity

COVID wake up call for Indonesia to improve medical industry capacity

A worker of a pharmaceutical industry (FOTO ANTARA/Yudhi Mahatma)

President Joko Widodo, in a video that later went viral, visited a pharmacy in Bogor, West Java on July 23, 2021 to buy oseltamivir and other COVID-19 medicines only to be told they were not available.

He was told that the medicines were not available as the pharmacy had not received supplies of the anti-virus drugs for a long time.

In July this year, Indonesia saw a record jump in COVID-19 cases due to the spread of the Delta variant in Java and Bali in particular.

The country's daily COVID-19 cases hit a record of 56,757 on July 15, 2021, while the daily deaths touched 2,069 on July 27, 2021.

The grave situation forced the government to enforce strict people’s movement restrictions (PPKM), or semi lockdowns, as the Widodo administration avoided using the term ‘lockdown’ in handling the pandemic.

The drastic COVID-19 spike overwhelmed the nation. Hospitals became overloaded with COVID-19 patients and the demand for drugs and medical oxygen jumped significantly, forcing the country to import them in larger quantities and accept the helping hand offered by other countries.

More worryingly, Indonesia barely produced three percent of medicines and medical equipment, while the remaining 97 percent were imported, particularly raw materials, according to Health Minister Budi Gunadi Sadikin.

"For medicines, only three percent are produced domestically. We still import 97 percent (of them), since out of the 1,809 drug items in the e-catalog, only 56 drug items are produced domestically," the minister stated at a virtual press conference held to discuss efforts to bolster the use of domestically made medical equipment products.

Out of the 10 major medicinal raw materials, only two are produced domestically, specifically Clopidogrel and Paracetamol, while the rest are still imported, the minister informed. Similarly, most of the country's medical devices are imported, he added.

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He then expressed concern over the high percentage of imports in the procurement of medical equipment, medicines, and raw materials for medicines.

"We view it from the health resilience system. Hence, we want to ensure that all raw materials for medicines and medical devices can be produced domestically to reduce our dependence on other countries. Especially during a pandemic such as this, the system of our health resilience should be strong," he emphasized.

The ministry has prepared several measures to increase the absorption of domestic medical devices, including by ensuring regulations in favor of domestic products; immediately calculating the Domestic Component Level (TKDN) of medical equipment and making TKDN as the main requirement in the e-catalog; and conducting promotions, particularly to prioritize domestic purchases, Sadikin said.

In the long term, the ministry will build resource competencies to facilitate technology transfer and build a better research ecosystem, he affirmed.

In the short term, the ministry will alter 5,462 imported medical devices (79 types of medical devices) to similar medical devices that can be produced domestically.

"Of the (total) 40,243 items, some 5,462 items have already been manufactured domestically. Hence, the government's procurement is only allowed for the purchase of medical devices that have been produced domestically, at the amount of around Rp6.5 trillion," the minister remarked.

Last year, the transaction value of Indonesia's health sector reached Rp490 trillion. The majority of the spending was used to pay for health services provided by doctors and the use of health devices, Sadikin said on August 30, 2021.

It would be a shame if this business potential is not tapped through the creation of manufacturing capacity or by the domestic industry, especially in the health sector, he added.

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Within the last five years, since President Joko Widodo issued his instruction regarding domestic health device production, the Health Ministry has issued 9,400 circulation permits for domestic health products, Sadikin disclosed.

"I have personally witnessed that, during the pandemic, several primary health devices can be produced domestically. Many personal protection device factories are starting to produce (their products) locally," he added.

The demand for health devices should be seen as an opportunity for the health device industry to become more aggressive in building domestic production capacity, the minister said.

"Because it is through this that Indonesia's economy will move and Indonesia will be a bigger, stronger nation," Sadikin asserted.

The minister also said he would ensure that the Health Ministry implements an affirmative policy toward domestic health device producers.

Meanwhile, the Directorate General of Customs and Excise at the Ministry of Finance recorded the realization of fiscal incentives from medical equipment imports at Rp799 billion for the March 2020-July 2021 period.

"The value of fiscal incentives given had totaled Rp799 billion of the value of imported goods of Rp4 trillion," the Ministry of Finance noted in an official statement on August 19, 2021.

The types of medical equipment imported included PCR reagents, ventilators, personal protective equipment (PPE), medicines, In Vitro machines (lab tests), as well as surgical, non-surgical, and N95 masks.

The minister explained that customs incentives were offered for the PCR test kits from March 2020 until now as they are expected to fulfill testing needs at low prices.

However, the PCR test cost in Indonesia was considered so high that the aviation industry complained. The controversy over PCR costs forced President Widodo to order reduction in PCR test costs.

Other medical items related to the PCR swab testing kits that were also given customs incentives included PCR test reagents, swabs, Virus Transport Media (VTM), and In Vitro diagnostic equipment.

Since July 2021, the government has also provided tax exemption on imports of oxygen, oxygen concentrators, oxygen generators, oxygen cylinders, and oxygen regulators, which were in very high demand.

In the meantime, Indonesia is also 100-percent depending on imported vaccines to fight COVID-19, as indigenous vaccines are currently in the development process and are expected to be ready by the middle of next year.

The government has allocated a budget of Rp47 trillion for COVID-19 vaccine imports this year, while Rp58 trillion has also been allotted for the entire vaccination program implementation throughout the country, according to Deputy Finance Minister Suahasil Nazara.

Meanwhile, House of Representatives (DPR) Deputy Speaker Rachmat Gobel has urged the government to prioritize the development of the domestic health industry to enable Indonesia to become independent and sovereign in its health sector.

"Based on the current COVID-19 pandemic, we have seen that we are very dependent on imports for medicines, vaccines, and health equipment," he said in a statement released on August 17, 2021, when the country celebrated its 76th Independence Day.

To this end, it is time that the government begins to develop the indigenous medicine, vaccine, and health equipment industry, he added.

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"Provide incentives, conduct protection, and facilitate domestic medicine, vaccine, and health equipment industry," Gobel asserted.

Secondly, dependency on imported medicines, vaccines, and health equipment has resulted in expensive pricing and depleted the foreign exchange, in addition to causing scarcity of medical supplies when Indonesia needs them the most, he added.

This has been one of the factors behind the high death rate, he elaborated.

The third point is related to the Proud of Indonesian Product that should not just become an empty slogan, Gobel remarked.

The President has established regulations and policies regarding local content requirement (TKDN), he noted. However, they require field supervision, especially in state spending, state-owned enterprises spending, and government projects, he opined.

The fourth point is related to the importance of strengthening the domestic health industry so that Indonesia can transform from a consumer nation into a producer nation, he added.

"This will bring us pride and dignity. It will also make use of Indonesia's human resources as well improve their quality. Building an industry is not just about the workforce but also the capability to create a product," Gobel remarked.

In addition to these steps, he suggested that the government encourage more investment in the health industry.

A similar concern was also voiced by the People's Consultative Assembly (MPR RI) Speaker Bambang Soesatyo, who reminded the nation that it must address its dependency on imports of food and medicines as well as medical equipment.

"When it comes to freedom, it has to be admitted that the level of Indonesia's dependence on imported products remains high," he noted during a public dialog entitled 'Reflecting 76 years of Indonesia Independence: Are We Free?' that was held virtually on August 21, 2021.

The MPR speaker made the statement while referring to data released by Statistics Indonesia (BPS) that indicated Indonesia imported food worth up to Rp88.21 trillion during the first half of 2021.

The speaker further said the level of the nation's dependence on imported health products had reached 90 percent.

Problems in handling the COVID-19 pandemic should serve as a wake up call for Indonesia to strive for self-reliance in medicines and medical equipment products. And this time, the nation must ensure plans for such self-reliance do not remain on paper.

Related news: COVID-19 medical supplies directly diverted to health facilities: KPPU  

 

 

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