State to delay drug price plan Relief for uninsured in April

Maine will delay implementation of its law aimed at lowering prescription drug prices for the uninsured until April, Department of Human Services Commissioner Kevin Concannon announced Friday.

Concannon backed away from an earlier assertion that some drug prices would be reduced Jan. 1, despite a continuing legal battle with a trade group representing the drug industry.

The delay would allow more time for the state to get pharmaceutical companies to add more drugs to a voluntary rebate program.

It would also create the possibility before the law is implemented of getting a court decision on the state’s appeal of an injunction against elements of the program issued in October by Federal District Court Judge Brock Hornby in Portland. That appeal won’t be heard by the 1st Circuit Court of Appeals in Boston until March.

Concannon said that regardless of whether a judicial decision is reached by April, the program will move forward. He said a key reason for waiting is that more companies seem ready to negotiate lower prices.

So far, 69 manufacturers have agreed to lower some prices. But the majority of those companies are small-niche players.

Some of the biggest players, many of which supported the legal challenge, still won’t even talk to the state, Concannon said. But in the last two weeks, several of the largest companies have said they’d be willing to lower prices for uninsured Mainers for their highest sales products, he said.

One multinational drug company, also involved in the lawsuit against the state, has agreed in principle to participate voluntarily, Concannon said. It’s a company with a few of the drugs most used in Maine, he added. The negotiation has given him hope that more companies will participate.

“It is a way for us to keep this moving forward and obtain a benefit even if it is not as full a benefit as the Maine Rx Program,” Concannon said.

Such selective rebates could still result in substantial savings, according to Concannon. He points out that the 100 most commonly prescribed drugs constitute about $100 million of the $200 million that Medicare spends on drugs in Maine annually.

Of the 100 drugs, many are simply different prescription strengths of one drug. A typical pharmacy startup operation stocks about 3,500 individual drugs, Concannon said.

The delay probably makes sense for Maine, with the legal issues to be heard in Boston in March, said Jeffrey Trewhitt, a spokesman for Pharmaceutical Research and Manufacturers Association in Washington, D.C. Even if the judgment went against Maine, PhRMA isn’t concerned about many features of Maine’s law such as voluntary negotiation.

“That’s fine,” Trewhitt said. “If what [Concannon] is talking about is voluntary participation in the program, we have no problem with that.”

Even though some companies have shown a willingness to negotiate with Maine just as they would with an HMO, Concannon said the force of law is still preferable.

The Legislature overwhelmingly approved “An act to establish fairer pricing for prescription drugs,” in its last session. The law would put the state in the role of negotiating rebates for the roughly 325,000 residents who lack prescription insurance in an attempt to bring prices paid by uninsured individuals in line with those paid by Medicaid. The uninsured now pay higher prices for their drugs than do those who are covered by state programs or private insurance.

PhRMA argues that the law violates federal interstate commerce laws by requiring companies to negotiate prices based on benchmarks from sales to other programs. It also contends that if Concannon made good on a threat to publish the names of companies that don’t negotiate, their reputations would be harmed.

Under the law, companies that don’t agree to negotiate could find their products on a list of drugs that require “pre-authorization” before being filled for Medicaid patients. When a patient provided a prescription for a product requiring pre-authorization, the pharmacist would have to call the state to get clearance to fill it.

In such circumstances, lower-cost drugs from other manufacturers might be suggested. Where no alternatives existed, patients would always get whatever medication was called for, state officials have said.

PhRMA argues that the pre-authorization retaliatory tool illegally ties a program with federal features to an unrelated state program.

PhRMA filed suit Wednesday against the U.S. Healthcare Financing Administration, or HCFA, for granting a waiver to Vermont to allow it to sell prescription drugs to the uninsured at Medicaid rates. PhRMA argues that’s illegal because it offers low-cost drugs to people who are not in the Medicaid program.

“This is not the right way to resolve the drug access problem for these patients,” Trewhitt said. “Moreover, it compromises the integrity of a well-established program, the Medicaid program, with its well-established procedures.”

Concannon sees it differently.

“It shows to me the extent that they’re determined to not have across-the-board discounts,” he said.