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High Court to Review Maine Drug Law on Interstate Commerce Grounds
Daily Policy Digest

Health Issues / Drug Price Issues

Wednesday, July 17, 2002
Critics say that Maine's prescription drug law will discourage pharmaceutical companies from investing in drug research and development. Moreover, they say it is unfair and punitive toward drug manufacturers. The Supreme Court will hear arguments challenging it on grounds it violates the Interstate Commerce Clause of the Constitution.

  • In May 2000, the state said that any resident without drug insurance could buy drugs at a 10 percent to 30 percent discount, by applying for a Maine Rx card and presenting it at a pharmacy.
  • Only 2 percent of the cost would be funded by the state -- while drug manufacturers would be forced to pick up the other 98 percent.
  • The manufacturer would pay that rebate to the state -- which would pass it along to the pharmacist.
  • To force manufacturers to comply, those who refused to pay the rebate would see their medications taken off the Medicaid preferred drug list -- and doctors would be forced to call a state bureaucrat to get permission to write the prescription.
The procedure would cause such a hassle for doctors that, in practice, the drugs would seldom be prescribed. Critics say the whole tangled process reeks because it singles out one industry to solve a problem the public should be solving.

In contrast, 26 states are using public dollars to subsidize elderly residents who need help with prescription drugs. If the Maine Rx is upheld, some of them might decide to shift the financial burden to the drug industry.

Source: Betsy McCaughey, "States Target Drug Pricing, But May Wing R&D Instead," Investor's Business Daily, July 17, 2002.

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