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The Republic of Costa Rica is located in Central America, bordered by the Pacific Ocean to the west, Nicaragua to the north, Panama to the south, and the Caribbean Sea to the east. With a population of 4.5 million, Costa Rica is one of the oldest and more stable democracies in the Western Hemisphere, boasting a literacy rate of over 97 percent and per capita gross domestic product of approximately $6,500. Costa Rica, with no army and an economy that is highly dependent upon the tourist industry, resists drug trafficking with its resultant crime and disruption to other economic activity. Although the United States has long supported the Costa Rican government's anti-drug efforts, new approaches favoring a treatment-based approach have begun to gain support as Costa Rica's more traditional efforts to combat illegal narcotics have proven unsuccessful.

Historically known as a producer of bananas and coffee, Costa Rica's economy has evolved in recent years so that tourism and manufacturing are now its major industries. Its high levels of educational attainment have made Costa Rica a major producer of pharmaceuticals. Costa Rica has plants for pharmaceutical manufacturers such as Procter & Gamble Co., Abbott Laboratories, and Baxter International.

Perhaps as a consequence of the presence of these manufacturers, Costa Rica has some of the shortest times needed to approve a drug and some of the lowest fees for doing so, with an average length of 45 days for drug registration to take place and a cost of $500. These times and fees are substantially lower than those in Australia (17 months/$125,000), the European Union (14–30 months/$200,000), or the United States (14–18 months/$300,000). Such policies have made the approval of new drugs easy and efficient for pharmaceutical manufacturers, although some have suggested that the speedy registration process allows certain drugs to be misused. Prescriptions for pharmaceuticals in Costa Rica are permitted to only mention the international non-proprietary name (INN) and cannot mention a brand name. Substitution of generics for the INN drug is allowed but not mandatory.

Costa Rica created its first drug laws in 1923, and by 1927 had established a national board to monitor narcotics. Beginning in 1927, the sale, import, and export of opium was controlled, and similar strictures were placed on heroin and marijuana in 1928. Costa Rica approved the Single Convention on Narcotics Drugs in 1972, and as a result created a special police force to combat drug use. Beginning in 1974 penalties were increased for those producing or selling marijuana, coca, or poppies while punishment for users began to be discouraged in favor of treatment. Current criminal penalties for importing, exporting, trafficking, or selling illegal narcotics are severe, with prison sentences of up to 20 years being given to those convicted of such actions. Costa Rican domestic drug policies focus primarily upon treatment and prevention, with special emphasis paid to discouraging drug use among school-age youth. To that end, Costa Rica has organized a Drug Abuse Resistance Education (D.A.R.E.) program, which is modeled after its counterpart in the United States.

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