Legal Victory in Medicine Price Regulation

Vanesa Aguirre Guzmán
Dec 1, 2023
2 min read

Updated: Nov 27

Overview of the Case

We represented a pharmaceutical company in a legal challenge against a price-regulation decision issued by the National Council for the Setting and Review of Medicine Prices. The company argued that the administrative procedure violated the Organic Administrative Code (COA) and infringed acquired economic rights.

Key Legal Issue

The authority issued a price-regulation act without complying with mandatory procedural requirements, including:

Proper legal motivation
Notification obligations
Competence of the issuing authority
Respect for due process and defense rights

The irregularities rendered the act legally void.

Our Legal Strategy

Our team structured an argument grounded in:

The nature and limits of administrative procedures under the COA
The protection of acquired economic rights
The mandatory duties of the regulatory authority
Comparative criteria and relevant international practice in price regulation

This legal foundation enabled the Tribunal to fully analyze the procedural violations committed by the administration.

Decision of the Tribunal

The Administrative Tribunal declared the administrative act null due to clear violations of the COA and due process.The judges emphasized that:

The authority must review its own acts when they may suffer from non-curable nullity.The government’s response was issued by an incompetent authority, was improperly motivated, and was contrary to the principles of justice that must guide public administration.

The Tribunal concluded that the regulatory authority’s decision was issued in violation of the law, and therefore had no legal validity.

Why This Matters

This ruling creates a valuable precedent for future medicine price-regulation cases in Ecuador. It confirms that:

Price-setting authorities must strictly comply with the COA.
Violations of due process will invalidate regulatory decisions.
Pharmaceutical companies have solid grounds to challenge irregular or arbitrary price-setting actions.

This case strengthens the legal framework protecting companies from unlawful pricing interventions.