Dear Friends and Clients,
We are pleased to share excellent news: we have secured a favourable judgment in an administrative litigation case against the National Council for the Setting and Revision of Medication Prices, achieving a significant victory against arbitrary pricing in the pharmaceutical industry.
This victory was made possible by the dedicated efforts of our legal team, led by José Meythaler, Karina Loza, Ricardo Enríquez and Sheyla Cuenca.. Their expertise and strategic approach played a crucial role in achieving this positive outcome.
Defending the Rights of the Pharmaceutical Industry Against Arbitrary Pricing Decisions
State institutions are obligated to comply with legal provisions and safeguard fundamental rights, such as due process. However, public administration may sometimes engage in arbitrary and abusive actions. In this case, we demonstrated the violation of our client’s rights by the National Council for the Setting and Revision of Prices for Medications for Human Use and Consumption.
Key Aspects of the Case
The National Council for Medication Pricing, through an administrative act, classified a medication as “strategic and new,” subjecting it to price regulation. Without conducting a proper administrative procedure in accordance with the law, and without notifying our client of all actions, the institution imposed a price cap that did not cover the medication's minimum production costs.
We filed an administrative lawsuit to bring the case before the court and to declare the violation of our client’s rights.
During the judicial process, the entity attempted to mislead the court with a flawed analysis of the applicable legal provisions. In response, we crafted a robust strategy, grounded in clear facts, to demonstrate to the Administrative Court the infringement of our client's rights and the arbitrary conduct of the Pricing Council, resulting in the dismissal of the defendant’s arguments.
Highlights of the Judgment
The court upheld the lawsuit and declared the nullity of the Pricing Council’s administrative resolution, which set a price cap insufficient to cover production costs. The court found that the action clearly violated our client’s rights, particularly those to due process, defence, and reasoned decision-making.
It was determined that in administrative procedures conducted by the Pricing Council, the regulated party has the right to an explanation of the reasons behind decisions that affect their interests or rights.
The court also affirmed that the Pricing Council must adhere strictly to the administrative procedure rules established in the Organic Administrative Code:
“12.8.- It is duly noted that the National Council for the Setting and Revision of Prices for Medications for Human Use and Consumption is not exempt from the Public Sector, which is governed by Article 42 of the Organic Administrative Code and Article 134 of the same law, whose rules apply to administrative procedures, special proceedings, etc.”
An Important Precedent for Public Institutions
This legal victory reinforces an important precedent: State institutions must strictly comply with administrative procedures and cannot abuse their power to the detriment of citizens’ rights.
Public entities are obligated to follow the law, provide reasoned decisions, and notify the regulated party of all actions within an administrative procedure to ensure the right to defence.
At MEYTHALER & ZAMBRANO ABOGADOS, we are committed to defending your rights and ensuring that every State action adheres to legal requirements. If your company is facing arbitrary decisions by State institutions, contact us. We are here to help you protect your rights and ensure fair treatment.
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