Before this week, El Salvador had some of the highest prices for medicine in the world. This was the result of a pharmaceutical market where there was no competition, and where drug distributors, such as the one owned by former president and ARENA party chief Alfredo Cristiani, kept prices artificially high.
Under the General Medicine Law, approved at the Legislative Assembly in February, prices for at least 6,200 medicines will be reduced by a minimum of 30%, and up to 60% for those most often prescribed, reports Prensa Latina.
El Salvador is currently considered one of the countries with the most expensive medication worldwide.
Low income groups and left wing political party Farabundo Marti National Liberation Front support the legislation, but domestic pharmaceutical groups claim the law is a violation of the right to economic freedom for drug companies.
According to activist organisation the Committee in Solidarity with the People of El Salvador, transnational companies such as Pfizer and the local pharmacies that carry its products have threatened to abandon the Salvadoran market, citing the law.
Approval of the policy was also a severe blow to former Nationalist Reblican Alliance party President Alfedo Cristiani, who owns domestic pharmaceutical company Droguería Santa Lucía.
But in a recent press statement, the Citizen's Alliance Against Healthcare Privatization said; "All of these threats from Cristiani and company are nothing more than maneuverings to generate a false climate of worry in the population, now that the brand-name products face alternatives in the market."
The law will create an independent entity known as the General Directorate of Medications, which will be authorised to supervise activities in the supply chain, such as imports, prescriptions and distribution.We will follow this law as it is implemented to see whether prices do, in fact, come down and to see if chronic shortages of some drugs are made worse.