Getting Tough On Danish Novo And Other Drug Firms

Danish Novo
and other foreign drug companies can quit Indonesia if they do not like new
rules requiring them to have local production facilities, Health Minister Siti
Fadilah Supari said on Monday.

    Rules
introduced earlier this month are designed to encourage foreign companies to
transfer technologies to Indonesia
and boost investment to create jobs, she said.

    “If they
want to get licences to sell their products they have to invest here also, not
just take advantage of the Indonesian market”, Ms Supari told Dow Jones
Newswires.

    “They can’t
just operate like a retailer here, with an office size that’s three metres by
three and make billions of rupiah. That is not fair”.

     The decree,
which has drawn protests from the US Chamber of Commerce, will affect 13
international pharmaceutical companies that currently sell their drugs in Indonesia but
do not have production facilities here.

     The
affected companies include Wyeth, Eli Lilly and Merck Sharp & Dohme Corp.
of the United States, Switzerland‘s Roche,
France‘s Servier,
Denmark‘s Novo Nordisk,
AstraZeneca of Britain and Astellas Pharma of Japan.

     Under the
new rules, foreign companies have a two-year grace period in which to set up
production facilities.

     Ms Supari
said she believes Indonesia‘s
big drugs market – worth around two billion dollars (S$3.04 billion) a year –
would persuade the companies that building production facilities is worthwhile.

     Those who
fail to do so would be banned from selling their products or distributing them
through companies that do have plants in Indonesia.

     “If they
want to go away, go ahead,’ she said. She added that India
and China
had already enacted such requirements.

     The
president and chief executive of the US Chamber of Commerce, Thomas J. Donohue,
last week sent a letter to President Susilo Bambang Yudhoyono, urging the
president to ‘consider revising the decree.’

     There are
29 international pharmaceutical companies marketing their products in Indonesia, with
total market share of 25 per cent.

     The
minister said the new rules will give ‘fair treatment’ to pharmaceutical
companies that have already invested in drug production facilities in Indonesia.

 

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