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Regulation and Compliance > State Regulation

Supreme Court Sides With Maine Drug Subsidy Program

By Staff Writer

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NU Online News Service, May 20, 2003, 5:52 p.m. EDT – The U.S. Supreme Court has issued a 6-3 ruling that lets Maine shut drug makers out of its Medicaid market if they fail to help it subsidize drug purchases by poor, uninsured state residents.

The Pharmaceutical Research and Manufacturers of America, Washington, originally filed the case, Pharmaceutical Research and Manufacturers of America vs. Walsh, et al., in a federal district court.

The drug manufacturers argued that federal Medicaid statutes forbid states from imposing significant restrictions on Medicaid recipients’ access to drugs “without serving any valid Medicaid interest.”

The drug manufacturers also argued that Maine was illegally trying to regulate the operations of out-of-state companies.

The manufacturers won a preliminary injunction that blocked Maine from making them provide rebates for uninsured state residents who buy their drugs.

The appeals court sided with Maine, and the Supreme Court has supported the appeals court.

Justice John Paul Stevens, in an opinion for the majority, emphasizes that the court has ruled only on the preliminary injunction, and that it might come to different conclusions in the future if more evidence comes in or the secretary of the U.S. Department of Health and Human Services rules against the Maine program.

But, for now, a majority of justices believe that the program regulates transactions conducted in Maine and does not illegally try to regulate out-of-state commerce, Stevens writes.

A majority of justices also believe that Maine has a right to impose restrictions with a “minimal impact” on Medicaid recipients to help uninsured residents, Stevens writes.

Stevens’ opinion and other opinions are available at //www.supremecourtus.gov/opinions/02pdf/01-188.pdf

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