Although the full implications are unclear, hospitals in Maine that treat large indigent populations may benefit from a Supreme Court ruling issued last week that could put needed drugs into the hands of Medicaid beneficiaries and uninsured people.
In a highly anticipated decision, the U.S. Supreme Court ruled 6-3 that a controversial Maine law designed to rein in drug prices for poor state residents could proceed despite pharmaceutical industry objections.
Under the "MaineRx" program, signed into state law in May 2000, Maine would act as a pharmacy benefit manager for residents without prescription drug coverage and negotiate price rebates from drugmakers. The law, which never went into effect, authorized state-imposed price controls and prior authorization requirements by a drug utilization review committee if drugmakers refused to offer discounts, which was a major target of attack by the Pharmaceutical Research and Manufacturers of America.
In its suit to block the law, PhRMA argued that MaineRx would interfere with the Constitution's commerce clause and that it represented an illegal deviation from federal Medicaid law. The decision rejected those arguments and could clear the way for other states to pass laws to contain drug costs. Already this year some 18 states have considered bills similar to MaineRx, according to the National Conference of State Legislatures.
Although more legal hurdles are likely, providers hope MaineRx will increase access to drugs for uninsured patients and thus reduce emergency room visits and other uncompensated care.
"The more patients have access to affordable prescription drugs, the better the outcomes," said Ted Slafsky, director of the Public Hospital Pharmacy Coalition, a division of the National Association of Public Hospitals and Health Systems.
The ruling won praise from lawmakers, who are under pressure to rein in healthcare costs and expand coverage. Sen. Debbie Stabenow (D-Mich.), head of the Senate Democratic Health Care Task Force and a vocal critic of the drug industry, called the ruling "a victory for the uninsured residents of Maine and the uninsured residents of all states where similar legislation is being drafted."
A spokesman for Rep. Tom Allen (D-Maine) acknowledged that further legal challenges from the pharmaceutical industry are likely, "but up to this point the program hasn't even been in effect, so (the Supreme Court ruling) is huge."
Hospital officials in Maine said they were optimistic the MaineRx program will improve access to drugs, but details of how the program is implemented and financed remain to be answered.
"We're just delighted that the Supreme Court unlocked this," said Miles Theeman, executive vice president and chief operating officer of Affiliated Healthcare Systems, a division of five-hospital Eastern Maine Healthcare, Bangor, that helps patients obtain lower-priced prescription drugs from Canadian pharmacies.
"We put our program into place as a stopgap waiting for something like MaineRx to come along," Theeman said.
State regulators could not give a timeline for implementing MaineRx last week. "We had been playing defense for the last three years while PhRMA's legal offensive team was pushing us down the field," said Newell Augur, director of legislative and public affairs for the Maine Department of Human Services.
The law is subject to further challenges. In their ruling, justices instructed the U.S. District Court, Augusta, Maine, to lift an injunction in effect since October 2000 while leaving it up to the lower court to determine, after reviewing evidence, whether Maine's law provides more benefit or harm to Medicaid beneficiaries.
Also, HHS Secretary Tommy Thompson could decide to reject MaineRx as a valid use of Medicaid dollars, said Marjorie Powell, PhRMA's senior associate general counsel. At deadline HHS officials had not returned calls seeking comment on Thompson's plans for MaineRx.
The state can expect continued drug industry opposition at every turn.
"We continue to believe that the core issue in this case is whether the state or doctors are going to be making decisions about what prescription drugs Medicaid patients can have," Powell said. The ruling, she said, also "raises concerns about whether and to what extent the Medicaid program is going to be consistent across all the states."