Federal Circuit Court Says Maine Prescription Drug Assistance Program an Illegal Expansion of Medicaid

The U.S. Circuit Court of Appeals for the District of Columbia on Dec. 24 struck down a Maine program that provides prescription drug discounts to uninsured residents, the New York Times reports (Pear, New York Times, 12/25). The program, Healthy Maine Prescriptions, launched last June, uses a federal Medicaid waiver to provide discounts of as much as 25% on prescription drugs for about 108,000 uninsured Maine residents with incomes less than 300% of the federal poverty level who do not qualify for Medicaid. The Pharmaceutical Research and Manufacturers of America filed suit in federal court to block the program. U.S. District Court Judge Ricardo Urbina upheld the program in February. In the case, PhRMA attorney John Roberts argued that HHS never approved the state's contribution to Healthy Maine -- 2% of prescription drug costs, or about $500,000 per year -- in the Medicaid waiver. Maine agreed to pay the contribution last year after the D.C. circuit court overturned a Vermont program similar to Healthy Maine (Kaiser Daily Health Policy Report, 12/6). But HHS Secretary Tommy Thompson did not "specifically approve a revision to the program," and the appeals court's three-judge panel said Healthy Maine was therefore an "illegal expansion of Medicaid," the Portland Press Herald reports. Judge Harry Edwards wrote in the court's decision, "To the extent that the modified Maine program purports to be different from the flawed Vermont program, it has yet to be considered or approved by the federal government." PhRMA officials said they were "pleased" with the ruling, according to the Press Herald. PhRMA spokesperson Bruce Lott said, "As they did in the [Vermont] case a year ago, the court has ruled that this type of program violates Medicaid law." State officials, however, said they did not believe the decision means that the program must "shut down" and said they would "address the court's concerns by working with Thompson" and state legislators, the Press Herald reports (Huang, Portland Press Herald, 12/25). State Department of Human Services Commissioner Kevin Concannon said, "Obviously, it's a deep disappointment. It's sort of a Christmas present, unfortunately, for Pharma, Big Pharma" (Harkavy, AP/Bangor Daily News, 12/25).

NPR's "All Things Considered" on Dec. 25 reported on the court ruling against Healthy Maine Prescriptions. The segment includes comments from Concannon (Silberner, "All Things Considered," NPR, 12/25). The full segment is available in RealPlayer online.

Drug Companies Should Not Win, Editorial Says
The prescription drug industry "should not be allowed to savor victory in the Maine case," according to a Boston Globe editorial. Although the state likely could receive federal approval for the program's funding formula, the editorial says that is not "enough to guarantee immunity from another successful lawsuit." The Globe says that the state Legislature should establish a "guaranteed funding formula" for Healthy Maine, which could be matched with federal dollars. The editorial concludes, "If other states adopted similar plans with federal matching funds, the cost would be significant, but people just above the poverty line should be spared the burden of high drug prices anywhere in the country. Healthy Maine and programs like it have the potential to improve the lives of Americans with modest incomes if the states and the federal government provide the resources to keep the lawsuits at bay" (Boston Globe, 12/27).