In a unanimous decision, the Administrative Appeals Court annulled a decree limiting the number of pharmacies that chains can have and other aspects of their sales activity. 

The decision is relevant not only for this sector but for economic activity and investment in general in Uruguay.

According to the Administrative Appeals Court, in Uruguay “the principles and rules of free competition” are applied in full to “everything related to market regulation.”

Market freedom can only be limited if two requirements are met: it must be done by law (not by decree) and for reasons of general interest. The Court found that the annulled decree imposed “severe restrictions” that violated the “fundamental” right to “freedom of industry and commerce” and the principle of “legal reserve.”

Specifically on the pharmacy market, the ruling held that the Executive Branch had “exceeded” its powers and that “the regulations regarding health police enforcement entrusted to the [Ministry of Public Health] by current regulations… cover a set of political-sanitary technical aspects related to public health, but do not authorize the establishment of restrictions or limitations on the economic and commercial policies of market agents via the regulatory route.”