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Thursday, January 20, 2011

Patents and pharmaceutical investment

Patent protection and pharmaceutical issues in developing countries are never as one dimensional as the headlines suggest. Access to cheaper medicines is often framed as a battle against patent protection. But Indonesia is looking at another angle. As much as any other developing country, a large part of the 250 million people in the archipelago need access to low cost medicines. Encouraging generics works at that end of the market; 2010 data shows that the Puskesmas community health centres dispensed generics in 96% of cases. In government hospitals the rate was 57%.

But the health ministry has now recognised the need to balance this with access to patented products. Import costs are part of the price inputs so the government is studying how to encourage more investment in local production facilities for international pharma companies to reduce the costs of patented medicines. The sector is only partially deregulated and Health Minster Endang Rahayu Sedyaningsih has cited barriers such as the local partner requirement and weak overall IP protection. So in January 2010 she proposed full deregulation for foreign pharma manufacturing. The battle is on however as parliamentary legislators are worried about the impact on local manufacturers (who mainly produce generics in fact). But patents still found a way into the issue, as the proposal is limited to manufacturing patented drugs where no generic version is available, or it cannot be produced locally. What that means for pharma manufacturing isn't clear yet but the International Pharma Manufacturers Group in Indonesia is keenly supporting the proposal.

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