FMLN and social movement win battle against the pharmaceutical industry


On February 17th, the Salvadoran Legislature approved the FMLN’s proposed Medications Law to overhaul the pharmaceutical industry. Due to the current lack of regulation, El Salvador has the highest medicine costs in the world, with brand-name drugs selling for 52.2 times the average international price and generic drugs selling for, on average, 28 times the international price. One major factor contributing to the astronomical price of drugs in El Salvador is the close relationship between the businesses that manufacture pharmaceuticals and those that sell them, and their even-closer political connections to the Salvadoran right-wing. The owners of El Salvador’s biggest pharmaceutical companies are familiar names indeed: Alfredo Cristiani, owner of Droguería Santa Lucía (and current president of the right-wing ARENA party), the Saca family, owner of the Vijosa labs (former president, Tony Saca, and his cousin Herbert Saca, now lead the new right-wing party GANA), and the Lacayo family, owner of the “Economic Pharmacy” chain (Miguel Lacayo is a former ARENA Minister of the Economy).  These businesses currently wield a complete monopoly of the Salvadoran pharmaceutical industry -- even the Ministry of Health must buy all medication for public clinics and hospitals from one of these private, domestic companies! Given the powerful political players who own the pharmaceutical industry, which rakes in $500 million per year in El Salvador, it has been a long struggle to regulate the industry in any way. The newly-approved Ley de Medicamentos will do several things to curb the cost and ensure the quality of drugs in El Salvador:

  1. Creates a national oversight board, made up of a Director (to be named by the President) and seven representatives of the Ministries of Health, Economy, Treasury, Defense of the Consumer, Social Security, the National University and private universities, to be charged with quality certification and price control. This is an important change, as it is currently the businesses themselves that certify quality and set the prices.
  2. Sets a price limit on brand-name drugs of no more than 3-5 times the international price. Generic drugs will cost 30-40% of brand-name drugs, whereas they currently average 50% of the cost.
  3. Prohibits gifts from pharmaceutical companies to doctors, paramedics or private pharmacists.
  4. Allows any person, business or state institution to import drugs directly. This will allow the Ministry of Health, as well as private hospitals and clinics, to negotiate their own prices for imported drugs.

Though the right-wing ARENA party opposed the law in the Health Committee, and later attempted to change it during the full session, they ultimately gave their support to the Medications Law, despite the major blow it will deal to the personal finances of several party leaders. In the weeks leading up to a critical election on March 11 (follow the news on CISPES’s 2012 Elections Blog), in which ARENA is trying to re-gain enough seats in the Legislative Assembly to independently block FMLN proposals, it would have been too costly to their public image to oppose a law that so clearly prioritizes the needs of the Salvadoran population over the oligarchy. In the end, the law was approved with 80 out of 84 votes and signed into law by President Funes, representing an important step in ensuring access to quality health care for all Salvadorans.

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