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Maine can negotiate lower prescription prices for uninsured residents

In October 2000, an injunction stopped the implementation until a constitutional challenge from the pharmaceutical industry was heard.

After a year of legal wrestling, the state of Maine can now negotiate price breaks on prescription medications for its uninsured residents. An impetus for the original measure was press reports that uninsured and poor elderly residents had to cut pills in half or who went without food to buy medicine.

On May 15, 2001, the Maine Rx Program was allowed to go forward by a three-judge 1st Circuit Court of Appeals panel in Portland. In October 2000, an injunction stopped the implementation until a constitutional challenge from the pharmaceutical industry was heard.

The panel drew a distinction between rebate agreements the state planned to negotiate with manufacturers and the charge from a national pharmaceutical lobby that the agreements constituted regulation of out-of-state transactions between the manufacturers and distributors of pharmaceuticals.

About 325,000 people stand to benefit from the program, which allows the state to negotiate with drug companies for lower prices — as much as 25 percent lower — and to put price controls in place by 2004 if the talks don't lead to price reductions.

Arguments from the Pharmaceutical Research and Manufacturers of America, known as PhRMA, maintained that the state's ability to negotiate conflicted with the federal Medicaid law and unconstitutionally regulates transactions outside the state's borders.

In January, the Maine Rx Program received federal approval. Under it, people with incomes up to three times the federal poverty level qualify for the price reductions.

The price of prescription medications was a national issue during 2000, with a focus on providing discounts to Medicare recipients. Maine kicked off the debate in May 2000, when Gov. Angus King signed the law supporting the Maine Rx Program. PhRMA, based in Washington, D.C., sued in August 2000, on behalf of more than three-quarters of the companies that make brand-name drugs in the United States.

Prescription price breaks were supposed to begin in January 2001, but were held up by the injunction. Mainers can now seek rebates from drug manufacturers and labelers that participate in publicly supported prescription programs, such as Medicaid.

Maine legislators also considered legalizing the importation of pharmaceuticals from Canada, where similar products sell for a fraction of their American prices.

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