PhRMA Sues Federal Government Over Maine Rx Drug Program

The Pharmaceutical Research and Manufacturers of America has filed a lawsuit against the Centers for Medicare and Medicaid Services (formerly HCFA) alleging that a Maine program to provide discounts on prescription drugs to an estimated 225,000 low- and moderate-income residents violates federal Medicaid laws and should not have been approved, the Wall Street Journal reports. Under Healthy Maine, which was launched June 1, drug makers are "required" to grant "Medicaid-style rebates on medicines bought by state residents" with incomes up to 300% of the federal poverty level, many of whom would not qualify for traditional Medicaid assistance. According to the PhRMA suit, which was filed in the U.S. District Court for the District of Columbia and seeks an injunction against the program, Healthy Maine violates Medicaid laws "requir[ing] that state and federal governments pay for any benefits given under the Medicaid program," since it requires drug makers to fund the cost of rebates (Wall Street Journal, 7/3). Last month, a federal appeals court ruled that HHS improperly approved Vermont's Pharmacy Discount Program, which is "nearly identical" to Healthy Maine. In that case, also brought by PhRMA, the U.S. Court of Appeals for the D.C. Circuit ruled that Vermont "lacked the authority to offer the same prescription rebates and discounts offered under federal Medicaid insurance," because Congress "imposed those rebate requirements to reduce the cost of Medicaid." Therefore, the court said, HHS should not have approved the program because it would not result in any overall Medicaid savings. Maine officials had expressed concern that a challenge to Healthy Maine was likely following the industry's victory in the Vermont case. However, a ruling against Maine in this case would not impact the Maine Rx program, under which the state will negotiate discounts with drug makers and impose price controls if such discussions are ineffective. In May, an appeals court rejected a PhRMA challenge to the Maine Rx program (American Health Line, 6/11).