By Kim Coghill
WASHINGTON - A U.S. District Court judge in Portland, Maine, Thursday approved a preliminary injunction against implementation of a law that permits the state to negotiate lower prices on prescription drugs.
The Washington-based Pharmaceutical Research and Manufacturers of America (PhRMA) in August filed the injunction, claiming Maine's law interferes with the nationwide federal Medicaid program and violates the Commerce Clause of the Constitution, which prohibits states from regulating transactions outside their borders.
In his findings, U.S. District Court Judge D. Brock Hornby wrote, "I find the plaintiff's likelihood of success on the merits of most of its constitutional challenges to be overwhelming. That being so, the state's interest in forestalling the preliminary injunction is weak. The state has a strong interest in assisting its economically and medically needy citizens, but not through unconstitutional legislation."
The state will decide next week whether to appeal the ruling or let it stand until the court hears PhRMA's constitutional challenge of Maine's law. A court date has not been set.
Maine's intention is to implement the program, MaineRx, in January, but if the injunction remains in effect, it will prevent the state from putting in place two significant elements of the program.
The first is Medicaid prior authorization, which requires a physician to get state approval before prescribing a drug, and the other involves profiteering, which allows the attorney general to bring action against a prescription drug manufacturer that he believes is charging an unfit or undue price.
In signing the law in May, Gov. Angus King, an independent, gave the state authority to serve as a pharmaceutical benefit manager for the 325,000 residents who lack prescription drug coverage either because their health insurance plans don't include prescription medicines or because they lack health insurance altogether. Maine has about 1.2 million residents.
PhRMA said Maine's attempt to control the cost of drugs is clearly in violation of the law.
"This is an effort to compel pharmaceutical companies to accept mandated price-controlled rebates," said Jeff Trewhitt, PhRMA spokesman.
In fact, Maine will ask pharmaceutical companies to enter rebate agreements only for Medicaid patients, said David Winslow, spokesman for the Maine Department of Human Services. So far, he said, 50 companies have signed up, but the state would like to have at least 100 companies on board before implementing the program. If the injunction is lifted, any company that does not agree to a rebate potentially will require state authorization before its drugs can be prescribed.
Winslow conceded that according to the judge, prior authorization as a punitive function may not be legal.
And extending price controls outside Maine likely is in violation of the law. According to the judge, "The attorney general is hereby preliminarily enjoined from seeking to enforce the illegal profiteering portion of the statute against transactions that occur outside the state of Maine, even if the prescription drugs eventually end up and are ultimately purchased in Maine."
The state said MaineRx would give its residents a chance to purchase drugs at a more competitive and affordable price. But, if by Jan. 5, 2003, the state determines its efforts as a pharmaceutical benefit manager have failed to deliver prices comparable to the lowest prescription drug prices paid in the state, a fair pricing board will set the maximum prices for prescriptions drugs in Maine by July 1, 2003.