The New Law on Medicines and its implementation

Overview

A number of inefficiencies existed in El Salvador’s drug market. One important cause of this was limited competition among distributors, with entry of new participants discouraged by high capital and registration costs. Drug legislation restricted the importation of a drug or product to a single distributor, and sometimes it led to conflicts of interest among the regulatory agencies responsible to ensure the market worked to best serve the population. Lack of political will to put forth and enforce basic regulations enabled the industry to register drugs without basic documentation on their quality and efficacy. These shortcomings resulted in high out-of-pocket expenditure for drugs, limited access and consumer dissatisfaction. In 2012, the government enforced a new medicines Law that created an independent national regulatory agency to modernize and improve practices. The effect was significant, with average overall medicine price reductions of 20–25% and savings of approximately US$ 60 million a year in medicine expenses. The paper discusses the new law and its implementation aspects that regulated the medicine market, retail prices, access, quality, procurement, prescription and use of essential medicines.

Synthesis report

The El Salvador case study is part of a synthesis report that applied a causal framework to synthesize lessons from ten case studies of various health system reforms which aimed to improve the efficiency in health systems

Reforms for improving the efficiency of health systems: lessons from 10 country cases