Medicines Act in El Salvador

On April 3, 2013 the regulation of the maximum sale prices of pharmaceutical products sold under prescripcion became effective. In theory, these changes are supposed to favor consumers, who will be able to obtain medicines at lower prices; however, unprecedented effects are developing.

In compliance with this, all pharmaceutical companies and their distributors had to review the inventories of medicines sold in the country to analyze if they were complying with the maximum sale prices established. To determine the maximum prices, the Government created mathematical formulas based on the prices of active drugs sold in the other Central American and South American countries.

Upon applying the formulas, some pharmaceutical companies realized that the resulting prices not even cover their market investment, even though they have been selling their products in El Salvador for a long time.

Since the Government was not able to change the maximum sales price of medicines, some companies decided to stop selling several of their star products in the local market and made their decision public through lists provided to the authorities and published in the major newspapers. Of course, this has especially surprised patients, who will no longer be able to find many prescribed medicines in the country. The alternative is to look for generics, which might not have the same effect as branded products.

In an effort to reduce anxieties and amend the unpredicted effect, the Government of El Salvador met with the most important foreign pharmaceutical companies to discuss and agree on a viable solution. The official proposal to the pharmaceutical companies is to bypass the intermediaries of the business chain and sell directly to  the pharmacies and drugstores, in the hopes of cutting an important overhead, to meet the maximum sale prices established by the Government.

At this time we are waiting for the  reaction of the companies, who have to consider important legal implications of terminating long standing distributors vis a vis leave the market wide open for more generic medicines. For sure, the story is not over yet!

By: Marcela Mancía
Partner
Intellectual Property Division

marcela-mancia

 

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