Maine Rx victory

If the problem of rising prescription drug prices cannot be solved by the pharmaceutical industry or by Congress, the only realistic option left to consumers in need is the states. That’s why a decision Wednesday by the 1st U.S. Circuit Court of Appeals was so important. While far from the final ruling on Maine’s bold plan to offer lower prescription drug prices to about 325,000 residents without drug insurance, it was crucial because it allowed Maine Rx to proceed, showing its strengths and weaknesses.

The Maine Rx program exists not only because the United States remains the only industrialized nation not to regulate drug prices but because individual elderly patients, according to a congressional study, paid on average 86 percent more for prescription drugs compared with the price charged to the federal government or to HMOs. The lack of buying power, of course, is the reason this disparity exists and its result has been chronicled for years: seniors being able to afford only half doses of medicine, one spouse going without medication so the other could afford drugs, the need for food weighed against the need for medicine. Maine’s plan requires drug companies to negotiate a price with the state or, after three years, face price controls.

No other state has such a plan, so it was no surprise it immediately ran into a lawsuit from PhRMA, the trade group for pharmaceutical companies. It argued that the plan violated the Commerce Clause because it affected trade in other states and that its prior authorization requirement – the state preapproves and lists drugs to encourage the use of equivalent lower-priced drugs – violated Medicaid rules. The court observed that Maine was not a buyer of drugs and did not attempt to regulate prices elsewhere and that the purpose of Medicaid was to enable states to offer medical services to people who otherwise couldn’t afford them.

It is important to remember that Maine Rx is expected to lower drug prices by only 20 or 25 percent – this isn’t a revolution, and many people still will be unable to afford their prescriptions. The well-deserved celebrations in the King administration might be more due to the court’s confirmation that state’s can do something about a serious and acute need for lower drug prices. This should encourage other states to develop ideas that could, in turn, save more money.

The pharmaceutical industry should be a part of these discussions, not an adversary. The ruling Wednesday may give it greater incentive to join in.