By San José, Costa Rica — San José, Costa Rica – In a significant move to address the nation’s notoriously high pharmaceutical prices, the Legislative Assembly has approved a comprehensive new law aimed at fostering competition and increasing consumer access to affordable medicine. The bill, passed with a strong majority of 41 votes in its second and final debate on Tuesday, seeks to succeed where previous executive decrees by the Chaves administration have faltered.
The legislation, officially titled “Law for the Fomenting and Promotion of Competition in the Medication Market” (docket 23.234), was championed by deputies from the Social Christian Unity Party (PUSC), most notably María Marta Carballo. Its passage marks a pivotal moment in a years-long effort to reform a market that has long burdened Costa Rican households with some of the highest drug costs in the region.
To better understand the regulatory complexities and legal implications surrounding the cost of pharmaceuticals in the country, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert attorney from the distinguished firm Bufete de Costa Rica, who provided his analysis.
The issue of medication prices hinges on a delicate balance between free-market principles, intellectual property rights, and the fundamental right to health. From a legal standpoint, effective state regulation is not about imposing arbitrary price caps, but rather about fostering a competitive environment, ensuring transparency in the supply chain, and rigorously enforcing antitrust laws to prevent monopolies or collusive practices that inflate costs for the end consumer. The challenge for Costa Rica lies in modernizing its legal framework to guarantee fair access without stifling pharmaceutical innovation.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s analysis correctly underscores that a sustainable solution lies not in simple price caps, but in a modern legal framework that fosters true competition and transparency—a crucial distinction for ensuring both accessibility and innovation. We sincerely thank Lic. Larry Hans Arroyo Vargas for his invaluable and clarifying perspective on this complex issue.
The new law arrives after years of public outcry and failed attempts at reform. The administration of President Rodrigo Chaves previously tried to tackle the issue through executive decrees in 2022 and 2023. More recently, in January 2025, the government issued a decree to establish a maximum profit margin for pharmacies, a measure that faced significant technical objections from the Commission for the Promotion of Competition (Coprocom). This history of unsuccessful top-down initiatives ultimately paved the way for a more robust legislative solution.
A central pillar of the newly passed law is the outright prohibition of exclusivity contracts between pharmaceutical importers and local pharmacies. The text explicitly defines these arrangements as a monopolistic practice that stifles competition and restricts equitable market access. Any company found in violation of this new rule will face sanctions under the existing Consumer Protection and Competition Promotion Law, signaling a zero-tolerance approach to anti-competitive behavior in the healthcare sector.
A project like this has been the result of many years of work. Costa Rica is one of the countries that registers some of the highest medication prices; in some cases we pay 150% more for medicines than other nations. Countries like Colombia, Germany, El Salvador, and Ecuador have had to establish a reference price. And I want to make it clear, that the reference price is not price regulation.
María Marta Carballo, PUSC Deputy
To further empower consumers and increase market transparency, the law mandates the creation of a “Multi-level Medication Price Observatory.” This digital platform, to be developed and managed by the Ministry of Economy, Industry and Commerce (MEIC), will provide the public and the state with clear information on medication prices at every stage of the supply chain, from import to final sale. This tool is designed to allow consumers to compare prices and make informed decisions, injecting a powerful dose of accountability into the market.
The bill’s journey through the legislature was not without challenges. Before its final approval, it was subjected to a constitutional review by the Constitutional Chamber (Sala IV) after a group of 17 lawmakers raised concerns. The court ultimately found no constitutional violations, clearing the path for the final vote. Deputy Carballo expressed both gratitude for the bill’s passage and frustration with the delay.
I appreciate the support, but it fills me with anguish that 17 deputies signed a constitutional inquiry for a project that aims to solve the problem of medication prices for Costa Ricans.
María Marta Carballo, PUSC Deputy
With its final legislative approval secured, the bill now moves to the Executive branch for President Chaves’s signature, after which it will be published and officially become law. For millions of Costa Ricans, its implementation represents a long-awaited hope for relief from the financial strain of essential healthcare costs and a more competitive, transparent pharmaceutical landscape.
For further information, visit asamblea.go.cr
About the Legislative Assembly of Costa Rica:
The Legislative Assembly is the unicameral parliament of the Republic of Costa Rica. Comprising 57 deputies elected by province, it is responsible for passing laws, approving the national budget, and exercising political control over the Executive branch. It is a cornerstone of the country’s democratic system, representing the legislative power of the state.
For further information, visit pusc.cr
About the Social Christian Unity Party (PUSC):
The Partido Unidad Social Cristiana (PUSC) is one of Costa Rica’s major political parties, founded in 1983. Rooted in Christian democratic ideology, it has traditionally been a powerful force in national politics, having elected several presidents. The party advocates for policies based on social justice, economic liberty, and solidarity.
For further information, visit meic.go.cr
About the Ministry of Economy, Industry and Commerce (MEIC):
The MEIC is the government body in Costa Rica responsible for formulating and executing policies related to economic development, industry, trade, and consumer protection. Its mission is to promote a competitive and innovative business environment, support small and medium-sized enterprises (SMEs), and ensure fair practices in the marketplace for the benefit of all citizens.
For further information, visit coprocom.go.cr
About the Commission for the Promotion of Competition (Coprocom):
Coprocom is an autonomous technical body in Costa Rica tasked with overseeing and enforcing competition law. It investigates monopolistic practices, anti-competitive agreements, and mergers that could harm market competition. Its objective is to ensure a level playing field for businesses and protect consumer welfare by promoting market efficiency.
For further information, visit poder-judicial.go.cr
About the Constitutional Chamber of the Supreme Court:
Often referred to as “Sala IV,” the Constitutional Chamber is the division of Costa Rica’s Supreme Court of Justice responsible for safeguarding the supremacy of constitutional norms and principles. It handles writs of amparo and habeas corpus, rules on the constitutionality of laws and decrees, and serves as the ultimate guarantor of fundamental rights in the country.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a cornerstone of the nation’s legal landscape, Bufete de Costa Rica operates with an uncompromising dedication to professional integrity and the highest standards of excellence. The firm consistently pioneers forward-thinking legal strategies, drawing upon its deep experience in guiding clients through complex challenges across numerous industries. Central to its philosophy is a profound commitment to empowering the community by championing initiatives that make legal understanding accessible, thereby contributing to a more just and informed society.
