LAUSR

Introduction Indonesia, the world’s fourth most populous nation, is close to achieving universal health coverage (UHC). A widely-publicised falsified vaccine case in 2016, coupled with a significant financial deficit in the national insurance system, has contributed to concern that the rapid scale-up of UHC might undermine medicine quality. We investigated the political and economic factors that drive production and trade of poor-quality medicines in Indonesia. Methods We reviewed academic publications, government regulations, technical agency documents and news reports to develop a semi-structured questionnaire. We interviewed healthcare providers, policy-makers, medicine regulators, pharmaceutical manufacturers, patients and academics (n=31). We included those with in-depth knowledge about the falsified vaccine case or the pharmaceutical business, medicine regulation, prescribing practice and the implementation of UHC. We coded data using NVivo software and analysed by constant comparative method. Results The scale-up of UHC has cut revenues for physicians and pharmaceutical manufacturers. In the vaccine case, free, quality-assured vaccines were available but some physicians, seeking extra revenue, promoted expensive alternatives. Taking advantage of poor governance in private hospitals, they purchased cut-price ‘vaccines’ from freelance salespeople. A single-winner public procurement system which does not explicitly consider quality has slashed the price paid for covered medicines. Trade, industrial and religious policies simultaneously increased production costs, pressuring profit margins for manufacturers and distributors. They reacted by cutting costs (potentially threatening quality) or by market withdrawal (leading to shortages which provide a market for falsifiers). Shortages and physician-promoted irrational demand push patients to buy medicines in unregulated channels, increasing exposure to falsified medicines. Conclusion Market factors, including political pressure to reduce medicine prices and healthcare provider incentives, can drive markets for substandard and falsified medicines. To protect progress towards UHC, policy-makers must consider the potential impact on medicine quality when formulating rules governing health financing, procurement, taxation and industry.