Drug Companies Believe HHS Could Impose Limits on Maine Rx

Even though the Supreme Court on May 19 lifted an injunction preventing Maine from implementing its proposed prescription drug discount program called Maine Rx, justices "made clear that the state has other hurdles to overcome," potentially including objections from HHS, Bloomberg/Indianapolis Star reports (Hallam, Bloomberg/Indianapolis Star, 5/21). Under Maine Rx, enacted in 2000, the state would negotiate with pharmaceutical companies for rebates on prescription drugs equal to or larger than those set by federal law for Medicaid. The state would pass the rebate to pharmacies, which would offer a discount to state residents without prescription drug coverage, regardless of income. Should a drug company not grant a discount on a particular drug, then Maine would require doctors to obtain prior authorization before prescribing those medicines to Medicaid beneficiaries (Kaiser Daily Health Policy Report, 5/20). In a 6-3 decision in PhRMA v. Walsh, the Supreme Court lifted an injunction that prevented the state from implementing Maine Rx, but the court did not endorse the program, the Portland Press Herald reports. Justices in the majority said that the Pharmaceutical Research and Manufacturers of America, which filed suit to prevent the program from being implemented, did not prove why the plan should be blocked. The case will now be sent back to federal district court for reconsideration. The court or HHS Secretary Tommy Thompson "could still terminate the program as its details are reviewed," the Press Herald reports (Jansen, Portland Press Herald, 5/20). Drug companies seeking to block the program might find a "friendly ear" in the Bush administration, which in a legal brief filed in the U.S. Court of Appeals argued that Maine Rx's prior authorization requirement might harm Medicaid beneficiaries, Bloomberg/Indianapolis Star reports. "If the administration's amicus brief is any indication of where Thompson may stand on the issue, the odds appear better than 50-50 that he will rule against Maine Rx or at least whittle down the size of the [non]-Medicaid population covered," J.P. Morgan Securities analysts said in a note to clients. "Anything [HHS officials] approve is likely to be scaled down," Norm Fidel, a health care investments manager for Alliance Capital Management, said. Newell Augur, a spokesperson for the Maine Department of Human Services, said the state has not decided whether it will seek federal approval for Maine Rx. He added that even if HHS approves the program, it would not protect Maine Rx from further legal challenges by the drug industry (Bloomberg/Indianapolis Star, 5/21).

Timeline for Implementation
Maine officials said they would like Maine Rx to begin sometime this year but acknowledged that many unanswered questions, including program funding, make it difficult to determine exactly when the program will start, the Portland Press Herald reports (Carrier, Portland Press Herald, 5/20). When Maine Rx was created in 2000, state lawmakers authorized a $4.6 million loan from a state tobacco trust fund to fund the program, and in fiscal year 2001, lawmakers authorized at least $650,000 for hiring, promotion and other expenses. However, with Maine Rx stalled in legal proceedings, lawmakers "chipped away at the money until there was nothing left," the Portland Press Herald reports. A spokesperson for Gov. John Baldacci (D) and legislative leaders from both parties said they support Maine Rx and will find money for the program. Officials said yesterday that it is impossible to know where the money will come from for Maine Rx and how much the program will cost, the Press Herald reports (Carrier, Portland Press Herald, 5/21). In addition, state officials must recalculate how many Maine residents would be eligible for Maine Rx; in 2000, officials said about 325,000 people would be eligible, the Portland Press Herald reports. Peter Walsh, the acting commissioner at the state Department of Human Services, said that the launch of Maine Rx would be incremental (Carrier, Portland Press Herald, 5/20).

Editorials
The following are summaries of newspaper editorials responding to the Supreme Court's ruling on Maine Rx:

• Bangor Daily News: "It is premature to celebrate a complete victory for Maine Rx" until the state can persuade Thompson to approve the program, which "will require coordination and a comprehensive argument from the [Congressional] delegation and [state officials in] Augusta," the editorial says (Bangor Daily News, 5/20).
  
• Cincinnati Enquirer: "States are acting [on prescription drug costs] because Congress hasn't," and the Supreme Court decision is "a victory for the states and their residents -- particularly the poor, elderly and uninsured -- against soaring drug costs," the paper states (Cincinnati Enquirer, 5/21).
  
• Des Moines Register: As the federal government "has failed miserably in using [its] buying power to exact meaningful savings on prescription drugs," Iowa and other states should follow Maine's lead and "do something meaningful to lower the cost of prescription drugs," the editorial maintains (Des Moines Register, 5/21).
  
• Long Island Newsday: The Bush administration should let Maine implement Maine Rx because health plans, Medicaid and veterans health programs all negotiate deals on drug prices for their members, but the uninsured "have no one cutting deals on their behalf" and "need the break," the paper says (Long Island Newsday, 5/21).
  
• Portland Press Herald: While the Supreme Court decision is a "significant victory" for Maine, Maine Rx is still open to lawsuits, and the Baldacci administration "should be aggressive in pursuing full implementation of the program and should spend what is required to defend the law against further legal challenges," according to the Portland Press Herald (Portland Press Herald, 5/20).
  
• USA Today: The Supreme Court decision gives a boost to states that are "struggling to help hard-pressed patients pay for costly prescription drugs," the editorial says, adding that states now must convince the Bush administration, which "has a sad history of opposing efforts to get lower prices for drugs," to "stand back and allow innovative new efforts that fight rising drug prices" (USA Today, 5/20).
  
• Wall Street Journal: The Supreme Court decision gives Maine a "tentative green light" to implement "price controls and rationing a la Canada and Europe," the editorial says. If the state does so, it would force consumers "in the other 49 states to foot the bill," as well as decrease the funds drug companies can use for research and development (Wall Street Journal, 5/21).