13 December 2004

Prescription Drugs | Federal Judge Expected To Rule in Maine Rx Plus Case Soon

U.S. District Judge William Smith is likely to rule soon in a "potentially precedent-setting case" that could limit the ability of states to use "hardball tactics" in price negotiations with pharmaceutical companies, the Boston Globe reports. The case involves a Maine program developed to provide discounted medications to state residents without prescription drug coverage (Rowland, Boston Globe, 12/11).

Maine Rx Plus calls for providing discounts of 10% to 25% for brand-name prescription drugs and as much as 60% for generic medications to about 275,000 state residents who do not have prescription drug coverage and have annual incomes less than 350% of the federal poverty level. Retail pharmacies would provide the discounts under the first phase of the program. In a second phase of the program, Maine would seek discounts from pharmaceutical companies and would place on prior authorization lists products for which companies refuse to provide discounts. Providers would have to receive state approval to prescribe products on those lists to Medicaid beneficiaries.

 Pharmaceutical Research and Manufacturers of America filed a lawsuit over allegations that the program would result in a revision to Medicaid and, as a result, requires HHS approval. PhRMA in 2000 filed a lawsuit against an earlier version of the program, Maine Rx, under which the state would have negotiated with pharmaceutical companies for rebates and pass the discounts to state residents without prescription drug coverage, regardless of income (Kaiser Daily Health Policy Report, 4/14).

 Implications
 According to the Globe, the "broader principles at stake" in the case represent a "key issue in today's climate," as many states "have been inspired by Maine's lead and have proposed a variety of plans to extend low Medicaid prices to non-Medicaid populations." Cliff Binder, senior policy associate at the National Association of State Medicaid Directors, said, "The case is going to be very important for other states that are interested in driving down health care costs and making drugs more affordable to people who are on the margin" (Boston Globe, 12/11)

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