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BMJ 2002;324:1416 ( 15 June )
 

News extra

US government supports Maine law to curb drug prices

Deborah Josefson Nebraska

The Bush administration has given evidence to the US Supreme Court in support of Maine’s proposed prescription pricing controls law. If the law is upheld, 20 other states could follow suit.

In August 2000, Maine became the first US state to enact prescription drug price controls, but fierce debate about whether the law was constitutional stalled its implementation. The industry appealed to the Supreme Court, which asked the Bush administration last October for its views.

Called Maine Rx, the law will force pharmaceutical companies to lower their drug prices by using the purchasing power of the federally funded Medicaid programme, which runs to over $200m (£137m; €212m) for drugs in the state.

The state will negotiate discounts with drug manufacturers to provide discounts of up to 25% to an estimated 325 000 people on low and moderate incomes who lack private health insurance and are not covered by Medicaid.

Patients enrolled in the programme will pay reduced drug prices to their pharmacies, which are then reimbursed the discounted amount by the state, plus an administrative fee of $3 (£2; €3.20) for each prescription filled. The drug companies will then reimburse the state in the form of a rebate.

Companies refusing to comply face the prospect of their drugs being listed for prior authorisation before payment, and a shift to alternative drugs and generic equivalents. Under the terms of the law, the state can fine pharmaceutical companies up to $100 0000 each time they overcharge for prescription drugs or restrict their supply and distribution to Maine residents.

The Maine law authorises the state to keep drug prices low by fostering competition, including the ability to negotiate with drug providers in other countries, such as Canada, as well as with private and public entities. And it allows the state to set maximum prices for prescription drugs by July 2003.

The Pharmaceutical Researchers and Manufacturers of America, a drug industry lobby group, has contested the Maine law since its enactment on the grounds that it violates interstate commerce laws by threatening to dictate drug prices in other states. The group also contends that Maine Rx is inconsistent with the Medicaid statute because it uses Medicaid monies to subsidise patients who are ineligible for that federal benefit.

The US solicitor general, Theodore Olsen, contested both these claims in the government’s brief filed with the Supreme Court at the end of last month.

The Pharmaceutical Researchers and Manufacturers of America describes the legislation as a dangerous development that will stifle innovation, discourage new drug development, and restrict patients to the drugs that are on Maine’s list, limiting access to potentially lifesaving and life enhancing medication.
 
 

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