States Poised to Lower Prescription Drug Prices as First Circuit Court of Appeals Rules Against PhRMA

A Federal Appeals Court decision has jolted the pharmaceutical industry and reignited efforts to lower prescription drug prices at the state level. Overturning a district court injunction, on May 16, 2001, the U.S. First Circuit Court of Appeals put back in operation the Maine Rx Program, allowing the state to negotiate lower drug prices for Maine’s uninsured residents and clearing the way for other states to follow suit.

During the 2001 state legislative sessions, 27 states introduced legislation modeled after Maine’s landmark Rx Program, but these efforts were essentially brought to a standstill because of the federal injunction.

"Now that the Appeals Court wiped away the stigma of unconstitutionality, we expect the Maine approach to really move across the country," said Enzo Pastore, CPA’s Health Initiatives Director, who works with state leaders on innovative solutions to lower prescription drug costs. "71 million Americans are without access to prescription drugs. It’s simply unconscionable to let this continue. States have the interest, enthusiasm and now the power to lower prices and put medicine in the hands of those who need it most."

The Court of Appeals said that the Maine law does not violate the Constitution and is consistent with the Congressional purpose for Medicaid. Calling the Maine Rx Program a novel approach to the serious problem of affordability of drugs, the Court added that to stop experimentation by the states "in things social and economic is a grave responsibility… It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory…."

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