Costa Rica has enacted a new Law for the Promotion and Fostering of Competition in the Pharmaceutical Market, introducing structural changes to sanitary registration, commercialization, distribution, and price formation in the private sector.
The new framework goes beyond reinforcing competition: it reshapes market entry conditions, restricts certain commercial practices, and establishes new transparency and oversight mechanisms.
Below is a summary of its main pillars and their potential impact on laboratories, drug wholesalers, and pharmacies.
1. Sanitary registration by recognition: streamlined market access
The law allows expedited recognition of sanitary registrations granted by regulatory authorities included in the reference list of the World Health Organization (WHO) and other qualified regional authorities.
This may imply:
- Reduced entry barriers for medicines previously approved in high-surveillance markets.
- Greater competitive dynamics in certain therapeutic categories.
- Shorter processing timelines, subject to technical review by the Ministry of Health.
2. Parallel imports: adjustments to distribution models
The law authorizes parallel imports of patented medicines and single-source products, provided that technical identity requirements and valid sanitary registration conditions are met.
This requires a reassessment of:
- Regional contractual clauses.
- Price segmentation strategies.
- Risks of misalignment with reference markets.
3. Prohibition of exclusivity agreements
Exclusivity agreements between drug wholesalers or importers and pharmacies are expressly prohibited and classified as monopolistic practices.
As a result, companies will need to:
- Review and, where necessary, amend existing agreements.
- Redesign commercial incentive schemes.
- Ensure compliance with Law No. 7472 on Competition Promotion and Effective Consumer Protection.
Non-compliance could lead to investigations and potential sanctions for anticompetitive practices.
4. Multilevel drug price observatory: new reporting obligation
A public information system will be created and administered by the Ministry of Economy, Industry and Commerce (MEIC), which will include:
- Entry prices and pricing throughout the value chain.
- Geographic information by province, canton, and district.
- Comparisons by active ingredient and brand name.
- Sales volumes and pricing trends.
Pharmacies and drug wholesalers will be required to report this information monthly under sworn declaration.
5. National drug pricing commission: entry price methodology
The law establishes a National Drug Pricing Commission, with public and private representation, tasked with defining the methodology to determine the mandatory market entry price.
Among the criteria to be considered are:
- International reference prices.
- Demand elasticity.
- Degree of innovation.
- Frequency of use.
- Availability of therapeutic substitutes.
The entry price will no longer be fully discretionary but will instead be subject to objective regulatory parameters, which may affect:
- Regional pricing strategies.
- Launch sequencing across Central America.
- Investment recovery models for innovative products.
Potential effects of the law
For the market in general:
- Greater transparency in price formation.
- Increased competitive pressure.
- Possible reduction of entry barriers.
- Greater availability of information for consumers and prescribers.
For strategically prepared companies:
- Expansion opportunities through recognition pathways.
- More equitable access to commercialization channels.
- Greater clarity regarding competition rules.
Initial Recommendations
In light of this new regulatory framework, companies should consider:
- Conducting an audit of distribution and exclusivity agreements.
- Reviewing regional pricing strategies.
- Identifying products eligible for recognition-based registration.
- Implementing compliance systems for the Price Observatory.
- Assessing the regulatory impact on their innovation pipeline.
