PhRMA Asserts itself in Court Action

Published October 1, 2001

The Pharmaceutical Research and Manufacturers of America (PhRMA) said it will ask the U.S. Supreme Court to overturn a federal appellate court ruling upholding Maine Rx, further delaying implementation of the state’s prescription drug discount program, according to the Bangor Daily News.

As previously reported in Health Care News (see “Drug Wars in Maine,” April 2001), Maine Rx, scheduled to go into effect on January 1, 2001, is a first-of-its-kind program permitting the state to act as a pharmaceutical benefits manager for the 325,000 Maine residents who lack prescription drug insurance coverage.

Under the Maine Rx program, the state would negotiate with pharmaceutical companies to obtain prescription drug rebates equal to or greater than those set by federal law for the Medicaid program. The state would then pass the rebate on to pharmacies, which would give the discount to Maine Rx participants.

In August 2000, PhRMA filed a lawsuit against the state, alleging the law was unconstitutional because it regulated out-of-state commerce and conflicted with federal Medicaid law. A federal judge granted a preliminary injunction barring the state from implementing the law, but the 1st U.S. Circuit Court of Appeals lifted that injunction in May.

In June, the appellate court rejected a PhRMA motion to reinstate the injunction. Maine Human Services Commissioner Kevin Concannon said PhRMA’s decision to appeal that ruling to the U.S. Supreme Court was disappointing, but he expressed confidence the state would eventually prevail in the case.

The Court is expected to hear PhRMA’s request in October. If it decides not to hear the case, the injunction will be lifted and the program implemented.

PhRMA Sues in Florida

PhRMA has also filed suit against the state of Florida, seeking to block a new law that requires pharmaceutical companies to provide discounts to have their drugs placed on the state’s Medicaid formulary.

The suit was filed on August 7 in federal court in Tallahassee. PhRMA argues the Florida law violates a federal statute requiring states to offer all prescription drugs to Medicaid beneficiaries “unless [according to the statute] there is a written finding that the drug offers no clinically meaningful benefit.”

The suit names Florida Medicaid head Bob Sharpe and state Agency for Health Care Administration Secretary Rhonda Medows as defendants. Jan Faiks, PhRMA assistant general counsel, told the South Florida Sun-Sentinel, “They are restricting patients’ access to drugs not for medical, clinical reasons but for money reasons.”

PhRMA says only 821 of the 1,827 brand-name medicines covered by Medicaid appear on Florida’s drug formulary. Under the Florida law, passed in May 2001, doctors may prescribe drugs not on the formulary, but they must call a phone bank of pharmacists for approval—a requirement, according to a Wall Street Journal report, “expected to prompt many physicians to prescribe drugs on the formulary.”

In a September press statement, Gov. Jeb Bush responded to the suit by saying “large profit margins for multibillion dollar pharmaceutical companies is not a priority for the state. I guess I’ll take it as a badge of honor that I’m being sued by the big drug manufacturers about what’s right.”

But “prescription medicines are an essential part of health care,” noted PhRMA in a press release announcing the lawsuit’s filing. “All citizens should have unrestricted access to the medicines they need.”

For more information . . .

The full text of the press release announcing the PhRMA Florida lawsuit is available on the association’s Web site at You will find links there to a backgrounder and the full text of the complaint.