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States Poised to Lower Prescription Drug Prices As First Circuit Court Of Appeals Rules Against PhRMA

Washington, D.C. — 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, the U.S. First Circuit Court of Appeals on Wednesday 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 has wiped away the stigma of unconstitutionality we expect the Maine approach to move like wildfire across the country,” said Bernie Horn, Policy Director of the Center for Policy Alternative, who has worked with state leaders on innovative solutions to lower prescription drug costs. “There’s 71 million Americans 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.”

“This is a setback for the prescription drug companies’ practice of charging the highest prices for prescription drugs to the Maine residents least able to pay,” said Chellie Pingree, former Maine Senate Majority Leader from North Haven who led legislative support for the law establishing the program.

On Wednesday the Court of Appeals said that the Maine law does not constitute interference with interstate commerce 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ﾅ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ﾅ”

For more information about state action on fair prescription drug pricing, contact Kristina Wilfore at the Center for Policy Alternatives at (202) 956-5141. State-of-the-states information can be downloaded at www.stateaction.org. The Center for Policy Alternatives is the nation’s leading nonpartisan progressive public policy and leadership development center serving state legislators, state policy organizations and state grassroots leaders.

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