The U.S. Supreme Court on Monday decided to lift an injunction that had kept Maine from implementing a drug discount program designed to provide affordable medications for its 320,000 uninsured residents.
Other states are likely to consider similar programs to control prescription costs as Medicaid spending on drugs rises and states face huge budget deficits.
The Maine Rx program uses a Medicaid mechanism to lower drug prices for all Maine citizens by empowering the state to act as a pharmacy benefits manager to negotiate rebates from drugmakers on prescription medications. If a pharmaceutical company refuses to negotiate with the state, the Maine Department of Health and Human Services can impose prior authorization requirements for drugs dispensed by that company anywhere in the state.
The law was enacted by the Maine Legislature in 2000, but never went into effect because the Pharmaceutical Research and Manufacturers of America filed suit almost immediately, arguing that the statute interferes with the Medicaid program.
Justice John Paul Stevens, speaking for the majority in his opinion, said the legal record did not provide enough evidence to show that Medicaid patients would be harmed.
"Maine's interest in protecting the health if its uninsured residents provides a plainly permissible justification for a prior authorization requirement that is assumed to have only minimal impact on Medicaid recipients' access to prescription drugs," Stevens said. "At this stage of the proceeding, the severity of any impediment that Maine's program may impose on a Medicaid patients' access to the drug of her choice is a matter of conjecture."
Stevens did acknowledge that prior authorization could have an effect on drugmakers and physicians.
"The impact on manufacturers is not relevant because any transfer of business to less expensive products will produce savings for the Medicaid program," Stevens said. "The impact on doctors may be significant if it produces an administrative burden that affects the quality of treatment of their patients, but no such effect has been proved."
The court action essentially throws the matter back to the state and the administration via the Department of Health and Human Services.
"Institutionally speaking, that agency 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)," said Justice Stephen Breyer in a separate opinion. "And the law grants significant weight to any legal conclusion by the Secretary as to whether a program such as Maine's is consistent with Medicaid's objectives."