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Supreme Court Upholds Maine

  • May 27th, 2003

The Supreme Court has given its qualified approval to a Maine program that will extend drug discounts to uninsured state residents by pressuring manufacturers to grant the same price discounts they already give Medicaid recipients, according to articles in the New York Times.

In a 6-to-3 decision, the Court lifted an injunction that has kept the Maine Rx Program from taking effect since the state's legislature enacted it in 2000. The Court rejected the pharmaceutical industry's assertion that the Maine law was unconstitutional and violated the federal Medicaid law. The Court's action is likely to embolden other states to move ahead with similar programs. Legislatures in 18 states are considering bills that would create programs similar to Maine's.

Sen. Olympia Snowe (R-Maine) said, "This decision is a victory for consumers, who deserve access to more affordable prescription drugs."

Under Maine Rx, the state will require drug makers who want to sell their products in Maine to negotiate discounts similar to those they already give for drugs sold through the Medicaid program. Although the state cannot directly regulate prices, it plans to coerce the pharmaceutical manufacturers to grant the discounts by imposing a "preauthorization procedure" on the products of any manufacturers that fail to cooperate. Preauthorization is a cumbersome process where the state's Department of Human Services must approve drugs on a case-by-case basis.

The Bush administration had urged the Court to block Maine's program, but the justices said the program should be allowed to go into effect, thus allowing evidence to be gathered on its actual impact. A solid majority of the Court rejected the argument that the program is unconstitutional. The Court implied, however, that Maine's program could still be struck down on statutory or administrative grounds. The Wall Street Journal reported that there are "[n]umerous steps" and "further legal wrangling" remaining before the program can begin.

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Last Modified: 05/27/2003

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