States Mull Options for Lower Prescription Drug Prices after Maine’s Price Control Law Is Blocked

In the wake of a federal judge's decision to block Maine's prescription drug law, other states "are trying to figure out how they can draft legislation to reduce drug prices without illegally punishing companies that refuse to participate," the Dallas Morning News reports. Last week, U.S. District Judge D. Brock Hornby ruled that Maine cannot "punish" drugmakers that will not agree to lower prices for the state's 325,000 uninsured residents. Moreover, the state cannot impose penalties on drugmakers that it contends charge "unconscionable prices" or earn "unjust of unreasonable profits." Furthermore, Maine cannot exclude a company's drugs from its Medicaid program if drug company officials "refuse to negotiate," Hornby ruled. However, Hornby did not rule on a provision of the law that would allow Maine to set drug prices if drugmakers failed to lower their prices by June 2003. Maine's law "had been hailed as a model by consumer groups and had drawn interested sponsors in more than 20 states," but state lawmakers now are investigating other methods, the Morning News reports. Marjorie Powell, assistant general counsel for the Pharmaceutical Research and Manufacturers of America, "cautioned state Legislatures to avoid Maine's mistakes," the Morning News reports. She said, "State legislators should think very carefully before they invest the legislators' time or raise the expectations of their constituents. We will oppose these bills wherever they occur, and if one should pass a state legislature and get signed by a governor, we will challenge it." So far, 22 states have programs that either pay the full cost of or subsidize low-income seniors' medication prices. Other states have pooled seniors, state workers, prisoners and Medicaid recipients to negotiate lower prices, and states like Iowa and Washington have created discount clubs that secure lower prices for seniors who pay an annual club fee. In Pennsylvania, state Rep. Don Walko (D) said he plans to "shift his efforts" to expanding the state's existing pharmacy assistance program for low-income seniors and bargaining with drugmakers for lower prices, rather than duplicate Maine's law. Although Vermont lawmakers have not reviewed the ruling yet, state Senate President Pro Tem Peter Shumlin (D) said that Vermont's "tactics could change," the Morning News reports. He said, "No one ever though this was going to be easy. The Maine bill is only one of many options we've been looking at." After the ruling, Maine's lawmakers are "huddling to figure out their next step," as 50 drug companies have agreed to give rebates to state residents without prescription insurance. Although another 10 companies "are finalizing deals," state officials said the program needs at least 100 participants, the Morning News reports. In addition, state officials are contemplating an appeal (Ornstein, Dallas Morning News, 11/3).