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Advice You - Jumpstart for Jakarta
Pie Cutters and Pie Bakers There are two types of political leaders: pie cutters and pie bakers. Pie cutters attain and maintain power by slicing the economic pie to placate opponents and reward friends. Pie bakers focus on making the economic pie larger so that the whole According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product country moves forward. Indonesia’s President Yudhoyono, a combination of General, intellectual and bureaucrat, has been a little of both during his first 11 months in office. But with the economic crisis caused by a weakening rupiah, a stock market swoon, and budget busting petro ; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug. Examples of combination products may in subsidies, he needs to quickly plant himself in the pie baking category. The Oven is Ready Many would categorize Indonesia as a relatively poor country but I beg to differ. I have toured Indonesia from tip to tip and it is a country with many assets and great promise. Rich lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together. in natural resources, a talented and young population, strategically positioned to benefit from Asian growth, a size three times the that of Texas and the world’s fourth largest population. As a relatively young democracy and developing economy it lacks an important ingredient for here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe economic growth: capital and a fiscal system to allocate it wisely. Let’s focus on just one important Indonesia asset that could dramatically jumpstart its economy and stock market while unleashing resources for badly needed education health and infrastructure. This asset is o d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations. Combination pro il and natural gas. There has been much in the press about the staggering burden of the fuel subsidies: $7 billion in 2004 and about $14 billion expected by 2005. A bargain must be struck quickly: sharply reduce the fuel subsidies and in turn, increase spending on education an ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc d health projects such as urgent polio immunization programs. Light the Fire But perhaps a more important issue than the fuel subsidies is that Indonesian energy production is far below its potential. The way that oil production has been handled over the past few years is easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi worse than a blunder and is close to a crime. Indonesia has 10 billion barrels of proven and potential oil reserves and 180 trillion cubic feet of proven and potential reserves. Nevertheless, Indonesia, Asia’s only member of OPEC, became a net importer of oil in 2004. Signs tha nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically t the Ignition is Broken This production shortfall is primarily due to insufficient investment and delays in awarding exploration and production contracts. Let’s look at one example, Exxon Mobil’s Cepu block project. Exxon Mobil has operated in Indonesia for a century and inve and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ sted $17 billion in the country, agreed to explore the dormant Cepu area years ago and by using advanced technology, found proven oil reserves of 600 million barrels and 1.7 trillion cubic feet of gas. Prepared to invest $3 billion to develop the project, it has been waiting for tw ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi o years to move forward as Indonesia’s state-owned energy company Pertamania has been haggling over issues such as the government’s insistence on a $400 million up front signing bonus. That’s right, it wants $400 million from Exxon Mobil before it risks $3 billion of shareholder ca ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it. Following aspects would a pital to develop the Cepu block. Meanwhile, Indonesia’s oil production levels have fallen to less than 900,000 barrels a day! At peak production, Cepu would provide the GOI about $2 million per day in revenues, add 180,000 barrels a day in daily production and eliminate gas shorta dd to the challenges in developing combination products: Which markets to tap where the combination products can do fairly well? Which combination prod ges in East Java. There are other projects that could be moved forward and in total could lead to baking an economic pie that could help lift all of the Indonesian people. Moving ahead with these projects would jumpstart the economy and bolster the confidence of foreign investors a cts are meaningful and rational? Which therapeutic categories to select? Which Combinations can address unmet needs of the patients? Do combin nd capital markets. This is certainly a better option than sharply raising interest rates that choke economic growth and makes badly needed capital even more expensive. The Fire is About to be Set Our intelligence indicates that due to financial pressures on the Indonesian tions increase the patient compliance? What would be the developing cost? How to tackle the risks encountered during combination product developmen Government, a 30- year production sharing agreement will be signed this week. This will be a big step forward in solving Indonesia’s energy shortfall and reassure international investors of the government’s commitment to market reform. I believe the markets will respond favorably t t? As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel o this news and we suggest the closed-end Indonesian Fund (IF) as the best vehicle to invest in Indonesia. It is managed by Credit Suisse Asset Management and has come down from a March 2005 price of $6.99 and a premium of 8% to net asset value a current price of $5.76 and a discou ping new procedures for reviewing their safety, efficacy and quality. Professional from academic institutions, pharmaceutical industries, health care indust nt of 2% to net asset value. The Indonesia stock market was up 47% in 2004 and is now trading at about 11 times earnings which is in line with the MSCI Emerging Markets Index. Stoking the Fire for Bigger Pies and Future Abundance Indonesia has taken the brave step of openi y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products ng its financial services sector to majority investment by international investors; let’s also open up other areas such as infrastructure and power. The most important reform to make Indonesia more attractive to international capital is to set up a transparent and clear approval pr . As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de ocess to cut out red tape and corruption. Then reinvigorate a previously announced plan to privatize some of Indonesia’s 145 largest state-owned companies to increase their profitability and raise more government revenue. Finally, why not follow ten other countries by putting in pl elopment. They need to be wiser in analyzing the market trends and the regulatory requirements. Companies that provide selfless information through particip ace a flat tax to rein in bureaucracy, stymie corruption and stimulate growth and productivity. Cutting fuel subsidies, addressing pressing social needs, increasing oil production and privatizing state-owned companies will put Indonesia back on the track of prosperity and progress tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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