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Injunction lifted against discount drug program
The U.S. Supreme Court has ruled that Maine can continue with its efforts to implement its "Maine Rx" program, which was designed primarily to provide discounted prescription drugs to Maine’s uninsured residents. The 6-3 decision, however, does not "finally determine the validity" of the program, the court says.
"The District Court did not conduct an evidentiary hearing and did not resolve any factual disputes raised by the affidavits filed by the parties," the court said in its decision. "Accordingly, no matter how we answer the question whether petitioner’s showing was sufficient to support the injunction, further proceedings in this case may lead to a contrary result."
Under the program, the state serves as a pharmaceutical benefits manager, negotiating discounts with drug manufacturers. These discounts come in the form of rebates paid by the drug manufacturers directly to the state. Maine residents enrolled in the program pay the reduced drug prices to their pharmacies, which then are reimbursed the discounted amount by the state, plus an administrative fee. If a manufacturer does not provide a rebate, that manufacturer’s products may be placed on the Medicaid program’s list of drugs that require preauthorization for payment.
The Maine Rx program was enacted in 2000 but never took effect because the Pharmaceutical Research and Manufacturers of America (PhRMA) in Washington, DC, filed a lawsuit asking the federal district court in Maine to enjoin the program’s implementation. PhRMA argued that the program was pre-empted by the federal Medicaid statute and violated the negative Commerce Clause. The federal court ruled in favor of PhRMA and issued the injunction. An appellate court in Boston reversed that decision in May 2001 but left the injunction in place. The Supreme Court then issued its ruling.
The fate of programs such as Maine’s may lie in the hands of the Department of Health and Human Services (HHS), which supervises state implementation of Medicaid. One justice in the majority, Stephen G. Breyer, said, "Institutionally speaking, that agency [HHS] is better able than a court to assemble relevant facts (e.g., regarding harm caused to present Medicaid patients) and to make relevant predictions (e.g., regarding furtherance of Medicaid-related goals)." A spokesman for HHS told media outlets that the Supreme Court decision validated the Bush administration’s position that states should seek federal approval before implementing such programs.