Maine Rx plan upheld by appeals court

The First US Court of Appeals has lifted the preliminary injunctionplaced on the state of Maine's prescription drug program, ruling that the plan is constitutional and does not violate free trade practices. The injunction had been sought by the Pharmaceutical Research and Manufacturers of America to prevent implementation of the plan, which was proposed by the state's Act to Establish Fairer Prescription Drug Prices, on the grounds that it interfered with interstate commerce (Marketletter March 12).

The Maine Rx program is unique. Its enabling legislation empowers the state authorities to set price controls for prescription drugs provided under the plan if they decide that the manufacturer's price is not reasonable compared with the lowest price for the drug available in the state. It also requires makers to provide rebates to the state similar to those which they agree with federal government purchasers, and failure to do so could lead to their products being unavailable to Maine residents covered by federal health programs.

Welcoming the court decision, Maine Governor Angus King said it validates the state's "aggressive approach to lowering prescription drug prices for our citizens," and observers said it will provide a fillip for similar initiatives in the other 26 US states which are proposing legislation to enable them to require rebates from drug manufacturers. The move "will be quite a bombshell for state legislatures all over the country," Bernie Horn, policy director of the Center for Policy Alternatives, is quoted by Reuters as saying, adding that "there will be a wave of new activity across the country to try to apply Maine's methods for the uninsured everywhere."