Indonesia's military set to produce drugs for public use to lower prices. Will it cause more headaches?

CNA

2 days ago

JAKARTA: Indonesia's plan for the military to produce medicines for public use has sparked alarm among health experts, who question whether the armed forces possess the required expertise and safety protocols.
Although facilities run by the army, navy and air force already produce drugs for their soldiers, experts question if they can meet the standards of modern pharmaceutical production.
On Jul 22, Indonesian Defence Minister Sjafrie Sjamsoeddin signed an agreement with the country's Food and Drug Supervisory Agency (BPOM) authorising labs run by the army, navy and air force to start producing drugs and medical supplies for civilians.
Sjafrie said the military will increase the production capacity of its medical research centres before beginning to produce drugs for the public.
The Indonesian government, the minister added, is hoping to launch these military-produced medicines on Oct 5, the 79th anniversary of the country's armed forces.
The drugs, he said, will be half the price of those produced by regular pharmaceutical companies and will be available at the 80,000 state-backed Red and White village cooperatives, a programme recently launched by President Prabowo Subianto.
'We will mass produce medicines and ship them to villages at prices which are 50 per cent cheaper than those in the market so people can afford them,' Sjafrie told reporters on Jul 22.
"We are thinking of ways to lower the price even more so we could provide free medicines."
According to its website, the military has produced 44 types of drugs for internal use, including several paracetamols, pain killers and antibiotics. Officials have not disclosed what medicines or the quantities that would be produced for public use.
Experts highlighted the lack of information on the standards and protocols at the military's production facilities.
'Producing medicines requires expertise, precision, sterile labs and strict protocols. How can an institution whose core competence is not in the pharmaceutical sector be allowed to produce medicines for the general public?' Windhu Purnomo, a public health expert from Airlangga University, told CNA.
'What is at stake is the safety, efficacy and quality of the medications produced.'
The opaque nature of the military adds to transparency and accountability concerns, observers said.
'If their manufacturing process is faulty, does the health ministry or the BPOM have power over the military? Will those responsible be held accountable? Because the military is not subject to civilian rules and regulations,' said Hermawan Saputra, chairman of the Indonesian Health Expert Association.
The pharmaceutical push comes amid a broader political shift under Prabowo, a former defence minister and a retired army general, who has expanded the military's role in civic affairs since he took office last year.
Under Prabowo, uniformed men have been appointed to strategic civilian positions inside various ministries, agencies and state-owned enterprises.
The military has also been awarded lucrative contracts by the government that range from road construction to cash crop cultivation in various parts of the country.
It has even secured catering contracts to supply food to millions of school children and pregnant women under the president's signature free meal initiative.
WHAT MEDICINES WILL THE MILITARY PRODUCE?
Indonesia has several medical research centres operated by different branches of the armed forces. These centres were built in the 1950s to develop medical procedures, equipment and medicines to treat combat injuries and fight diseases endemic to soldiers' operational areas.
The military has not disclosed much information about these research centres, including what types of medication and supplies they produce, how much they produce and where the supplies are distributed.
Producing vast quantities of medicines for civilians of different ages and with different health conditions is not the same as manufacturing a limited amount of drugs for a group of young and fit soldiers, experts said.
'The protocols and standards are much stricter for mass produced medicines,' said Hermawan of the health expert association.
'Some chemicals need to be handled, stored and processed in very specific ways. There are strict guidelines to prevent contamination and mix-ups.'
Failure to follow these pharmaceutical manufacturing practices can have deadly consequences, he added.
In 2022, more than 200 children in various parts of the country died of an acute kidney injury after consuming toxic cough syrup. The poisoning also left several survivors with permanent disabilities including blindness and hearing loss.
Last year, an Indonesian court found that lax oversight by the pharmaceutical company Afi Farma and its supplier, Samudra Chemical, caused the syrup to be tainted with ethylene glycol at a concentration that was 1,000 times higher than what is considered safe for consumption.
Ethylene glycol is a commonly used chemical in products such as brake fluid and antifreeze.
Four officials from Afi Farma and Samudra Chemical were each sentenced to two years in prison and the two companies were ordered to pay millions of dollars in fines and compensation to the victims' families.
Samudra Chemical was a new player in the pharmaceutical industry while Afi Farma has been producing medicines since 1985.
According to court documents, Samudra was originally selling chemicals to soap manufacturers and had only begun supplying to pharmaceutical companies for a year before the incident occurred.
The risk of such poisoning incidents recurring is high if medicines are produced by inexperienced players, experts said.
Such episodes, Hermawan said, not only erode the public's trust in the country's health system but also tarnish Indonesia's image internationally.
'Health organisations might think twice about sending free vaccine or drug materials to Indonesia because there is a high chance these materials will not be processed properly,' he said.
Taruna Ikrar, chief of the drug supervisory agency BPOM, said his office will ensure that the drugs produced by the military are safe. The Indonesian Armed Forces, he added, is in the process of acquiring the permits and certifications needed to produce and distribute medicines.
'We will make sure the military meets all the requirements, from manufacturing to laboratory standards. We are making recommendations so the military can obtain these certificates,' he said.
Indonesian officials have said the military's involvement is needed to keep drug prices low.
Existing pharmaceutical players care more about maximising profit than serving people's needs, officials have said, but such an argument misses the mark, experts countered.
'The main problem is 85 per cent of our pharmaceutical ingredients are imported, especially from China and India, and they sometimes involve very long chains of suppliers and intermediaries,' Dicky Budiman, a public health expert from Jakarta's Yarsi University told CNA.
This is a factor causing the prices of some drugs in Indonesia to be up to five times that of other countries.
'What the (Indonesian) government should be doing is to build an upstream pharmaceutical industry,' Dicky said.
It should provide incentives in the form of tax breaks, subsidies and funding so local pharmaceutical companies, as well as universities and research bodies can develop and produce their own chemical and biological ingredients.
'The government can also force (pharmaceutical) companies to increase their local content through regulations or by prioritising medications with high local content to supply state-run hospitals, health insurance schemes or other government programmes,' he said.
Another way to keep medicines affordable is to simplify the distribution chain.
The same drug can be sold at starkly different prices at different pharmacies due to various reasons, noted Windhu of Airlangga University.
One pharmacy might sell some products cheaply because they are procured directly from the manufacturer. But other products may cost more because the pharmacy may have had to go through layers of distributors and intermediaries.
'Sometimes, a pharmacy will just inflate the price because they are the only ones in town and the nearest competitors are kilometres away,' Windhu added.
Each year, the government caps the price of certain generic drugs but experts said this is rarely enforced.
Putting a ceiling on how much medicines should cost will force the industry to simplify its distribution chain, Windhu said, as well as curb monopolistic and unethical practices.
'It is no secret that pharmaceutical companies like to provide junkets, lavish events, gifts and even kickbacks to get doctors to prescribe their products, and these costs are ultimately borne by the consumers,' he said.
'It's time the government gets serious about putting a ceiling on how much drugs should be sold, so companies will think twice about these types of practices.'
WHEN IS THE MILITARY NEEDED?
Despite the outcry, experts acknowledged that the military has valuable assets that can be mobilised to strengthen Indonesia's pharmaceutical industry.
With its vast logistical network, disciplined personnel and reach into the most remote corners of the archipelago, the Indonesian Armed Forces could help overcome one of the health sector's most persistent challenges: distribution.
'The military is well equipped to handle distribution to all areas, even the most remote ones. That's different from the private sector which just doesn't have that kind of infrastructure,' Windhu said.
The COVID-19 pandemic offered a clear example of how military's logistical abilities and manpower can complement national health efforts.
During the pandemic, the military helped transport vaccines, set up field hospitals, and distribute aid to remote regions that proved critical to the overall emergency response.
'The military can be quite useful in times of emergency. However, under normal circumstances, the military should focus on playing a supporting role, filling the gaps which the civilian sector cannot fulfill like (distributing medicines to) remote areas,' Khairul Fahmi, a military expert of the think tank Institute for Security and Strategic Studies told CNA.
'By focusing only on filling the gaps, the military's involvement can strengthen Indonesia's medical sector and not disrupt or be in direct competition with existing pharmaceutical businesses. More importantly, Indonesia can maintain civilian supremacy in the sector.'
Health expert Windhu agreed.
'In an emergency where we need to produce huge quantities of medicines in a short amount of time, getting the military involved in pharmaceutical production is justified,' Windhu said.