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Supreme Court debates state move to cut drug costs
By Bill Mears
WASHINGTON (CNN) -- In a case pitting powerful pharmaceutical companies against the states, the Supreme Court Wednesday heard arguments on a controversial plan to lower prescription drug prices. At issue is a controversial pilot program in the state of Maine designed to help uninsured people get access to medicine. A broader issue is the ongoing debate over federalism and the power of the national government to pre-empt state health care laws. Maine lawmakers in 2000 tried to find a way to use the state's control over Medicaid funds to bring down spiraling prescription drug costs, thereby benefiting every state resident. The program, named Maine Rx, forced drug manufacturers to negotiate discounts or face a loss of access to thousands of Medicaid patients. The state would then use the savings to help the estimated 300,000 people in Maine lacking prescription drug coverage. Medicaid is the federal program to provide health care for the poor. Maine officials say they have a right to use their buying power under Medicaid to force down costs. They cite a similar program in neighboring Canada, to which many Americans say they must travel to afford medicine, which can be found at lower prices there. Drug companies sued the state, claiming Maine's law violated the constitutional ban against state control of interstate commerce by out-of-state drug manufacturers and distributors. They claim Medicaid patients would suffer, because companies unable to sustain the lower, state-mandated prices would then be forced to stop doing business there, depriving life-saving drugs from patients who need them. In arguments Wednesday, attorney Carter Phillips told justices, "What Maine is doing is using Medicaid patients to fund a totally unrelated program, asking the federal government to subsidize a program it has no business subsidizing." He said Medicaid patients were being treated as "pawns" by the state. Phillips said any Maine resident could apply, even those who already had drug coverage through their employer, or those who could easily afford it. "The idea you should try to lower the health care costs to the benefit of the Stephen Kings of the world is ludicrous," he said, referring to the prolific author who is a Maine resident. But Maine officials dismissed that argument. "No one would want to use the Maine Rx plan if they already had private insurance, where they only had to pay a nominal co-payment," said Andrew Hagler, Maine's assistant attorney general. Some justices were skeptical, with Antonin Scalia referring to Maine's program as "a shakedown" of the drug companies. Twenty-eight states support Maine, and several have similar proposals waiting to pass their respective legislatures, pending the outcome of this case. Maine's law is the latest in efforts to impose some form of drug price controls. The U.S. Congress has tried over the years to allow prescription coverage for the separate Medicare program, serving older Americans. But Republicans and Democrats have repeatedly clashed over the scope and price tag of such a plan. The Bush administration in the case at hand argued for the drug companies, but has said it would support any law focused only on reducing drug costs for low-income patients. The case is Pharmaceutical Research & Manufacturers v. Concannon (Maine Dept. of Human Services), No. 01-0188.
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