In a David vs. Goliath scenario, the state of Maine took on the huge drug lobby and won, thanks to a recent ruling by a federal judge that says the state may proceed with its program to curb rising prescription drug costs.

PhRMA officials say they will appeal the court's decision.

PhRMA sued the federal government in July 2001, alleging the Healthy Maine prescription drug program violates federal law. The lawsuit, which asked for an injunction against the program, came just one month after the group successfully overturned similar legislation in Vermont.

Can Maine succeed where Vermont failed?

Both Maine and Vermont received Medicaid rules-and-regulations waivers from the Center for Medicare and Medicaid Services, which oversees the federal health insurance programs for the United States Department of Health and Human Services. These waivers gave the states permission to negotiate price breaks on prescription medications for low-income residents. However, PhRMA alleges that these price breaks constitute regulation of out-of-state transactions between the manufacturers and distributors of pharmaceuticals, in violation of Medicaid law.

On June 8, 2001, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit agreed with PhRMA that Vermont lacked the authority to offer the same prescription rebates as those offered under Medicaid.

Maine is hoping that its prescription drug program is different enough from Vermont's to survive PhRMA's legal challenges. Maine has budgeted $20 million to help subsidize drug purchases of low-income seniors, while Vermont did not set aside similar funding for its program, according to Charles Dow, an assistant to Maine Attorney General Steven Rowe.