How Rupiah Plunge Affects Indonesia's Pharmaceutical Industry

TEMPO.CO, Jakarta - Indonesia is expecting a 10 to 20 percent surge in domestic medicine prices, triggered by the weakening rupiah exchange rate, according to the country's Health Minister Budi Gunadi Sadikin. Rupiah reached Rp18,201 per US dollar in the beginning of June.

Minister Budi claimed the medicine price hike remains within a reasonable range, while discouraging companies from taking profits above this limit. "A 10 to 20 percent hike makes sense. But above that, don't take profit," he said after a closed-door meeting with House Commission IX in Jakarta on Thursday, June 11. 

According to Budi, rupiah depreciation rate is not a constant in calculating domestic medicine price surges. If, for example, the US dollar strengthens by 30 percent, the prices of medicine will not automatically rise by that same amount. This is because various components in drug production costs are rupiah-based, such as employee salaries, electricity, and fuel.

"So it's not possible to fully translate changes in foreign exchange into price hikes," he said.

He further explained that the increase in drug prices will not affect subsidized medicine under the country's national health insurance program, BPJS. This was also affirmed by the Director General of Pharmacy and Medical Devices, Lucia Rizka Andalucia, who is in charge of calculating changes in drug prices.

Rizka assured that 20 percent remains the highest ceiling for the medicine price hike, allowing BPJS to cover the additional costs. "Some increased by 5 percent, others by 10 percent. But not more than 20 percent. It's still safe for BPJS," she said.

The domino effect of the rupiah depreciation on medicine prices has caused concern for the Indonesian Empowered Consumer Forum (FKBI). FKBI chair Tulus Abadi said the soaring medicine and vitamin prices are inevitable, as 85-90 percent of raw materials for drugs in Indonesia are imported.

Tulus expected the price hike to result in a further reduced medicine consumption ratio in Indonesia, which is already low. "The collapse of the rupiah exchange rate will further reduce the medicine consumption ratio for the Indonesian people, since drugs will become more expensive," he said in a written statement on Saturday, June 6, 2026.

Another impact of the soaring drug prices is the swelling BPJS budget, as healthcare facilities seek larger claims. This will exacerbate the pressure on BPJS' financial state.

The weakening rupiah, in turn, threatens the lower- and middle-sized pharmaceutical industries. Once they fail to purchase the raw materials required for medicine productions, activities will cease. "The threat of bankruptcy and layoffs are unavoidable," said Tulus.

Anastasya Lavenia Yudi contributed to the writing of this article.

Read: Indonesians Urged to Sell Dollars to Rescue Rupiah

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