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Prescription drug laws in Maine
 

 ARCHIVE ONLY: A compendium of information, analysis and opinion sources, covering activities from 1999 through 2005.     Reposted: 12/08

| Maine Programs | court actions | current laws

The state of Maine has an extensive history of involvement with prescription drug laws and policy. Recently these laws have attracted national attention. In 1975 Maine was one of the first two states to create a senior pharmaceutical assistance program. In 1999, Maine's SB 732 mandated the first statewide discount price program. In May 2000, the legislature enacted and the Governor signed a multi-part law that included both discounts and the nation's first state prescription drug price control mechanism. A separate pharmaceutical discount law was enacted in May 2001, and an entirely new law passed in June 2003. Several court cases also have sought to alter Maine's prescription drug policies. In April 2002, Maine enacted S 777 by Sen. Treat, which requires the Department of Human Services to apply for a new federal Medicaid waiver to expand the pharmaceutical benefits available to people covered by the current state subsidy program. Subject to funding, the department may expand subsidy eligibility up to 200% of FPL. (signed by governor as Public Law Chapter 650, 4/9/02) The waiver application was filed September 2002 and still is pending as of December 1, 2003.

This web page provides timely resources about these laws, with an emphasis on web links to primary sources. We have sought to include a range of analyses and opinions including legislative, business, consumers and media. As always, the National Conference of State Legislatures takes no position on policy content of these laws, and is not responsible for third-party opinions.

Maine Prescription Drug State Laws and Policies

  • 2005-2006: See Prescription Drug State Legislation for 2005.   No comparable laws were signed in 2006.
  • 2004 laws: See Prescription Drug State Legislation for 2004.
  • 2003 law: Maine Rx Plus, signed in June as Public Law 494 -- see below
  • 2002 Pharmacy Plus waiver:
  • 2001 Law: Maine's subsidy and discount programs were merged into the expanded and renamed Healthy Maine Prescriptions Program. The law, Chapter 293 [full text link], signed May 25, 2001, provides structural details. As of fall 2002, there were 115,000 residents enrolled in the subsidy and discount components of "Healthy Maine Prescriptions", with 36,000 receiving subsidies and the balance of 79,000 receiving the discount-only benefit. As a result of an adverse court ruling, the program was closed in January 2003; enrollment was transferred back to the Low Cost Drug subsidy program; it serves 37,000 as of December 2003.
  • 2000 law - Maine Rx & Drug Access- Public Law Chapter 786 of 1999 session, signed May 11, 2000. This law created the Maine Rx Program, providing a discounted price for any eligible resident who enrolls in the program. The program relies on state-based manufacturer rebates to achieve the lower price. It also provides authorization for the Commissioner of Human Services to establish maximum retail prices effective July 2003 "if prices paid under the Maine Rx program for the most common drugs are not reasonably comparable to the lowest prices paid in the state."1 This law is not a Medicaid program, and is legally separate from the 2001 statute that established Health Maine Prescriptions.
  • State Pharmaceutical Assistance Program (SPAP) coordination: Maine has run one or more senior pharmacy assistance programs since 1975.   For 2006, the state will offer wrap around benefits for Medicare eligibles, including coverage for premiums, one-half of the deductible and 80% of the coverage gap.  LB 1325 was signed by governor as Chapter 401 on 6/17/05.

LATEST & COURT NEWS:

MAINE RX:

Federal Judge Upholds Maine PBM Law Adopts Recommendation of Magistrate Judge and Holds for State on Every Count
On April 13, 2005 U.S. Federal District Court Judge D. Brock Hornby, after oral argument on April 5, 2005, and de novo review of the record, issued his decision in the case Pharmaceutical Care Management Association (PCMA) v. G. Steven Rowe, State of Maine.
>>Download the Magistrate's decision directly

Maine Rx wins round in court on Jan. 28, 2005
A favorable federal court ruling for Maine's discount-drug program was handed down January 28 by the U.S. District Court judge in Rhode Island, who dismissed a lawsuit by PhRMA regarding use of prior authorization.  This is the case that already has been ruled on by the U.S. Supreme Court. -Article in Portland Press-Herald, 1/29/05

The U.S. Supreme Court on May 19, 2003 ruled that Maine can put the Maine Rx program into effect, in a decision the media described as having "dealt at least a temporary setback to the drug industry." The Maine Rx law was enacted in May 2000, but has been on hold while the legal issues were examined repeatedly in court.
Hawaii is the only other state with a comparable law, HB 2834 of 2002.

For historical context, in 2003, about 18 states filed bills with features similar to Maine Rx, although only two of those states, Hawaii and Illinois, enacted a law in 2003. (See map).

Colorado - HB 1162 - died at end of regular session
Florida - SB 2098 - died at end of regular session
Georgia - SB 112 - died at end of regular session
Illinois - HB 209 - signed by governor, 6/16/03
Indiana - HB 1688 - did not pass by end of session
Massachusetts - S 494 -did not pass
Michigan - SB 75 -did not pass
Minnesota - HF 281, SF 535, HF 799 - did not pass
Mississippi - HB 828 - died in committee
Missouri - HB 37 - died in committee
New Jersey - A 3406 did not pass by end of regular session
New York - A 5491 -did not pass
Ohio - S 14 - -did not pass
Rhode Island - HB 5607 - did not pass
Tennessee - HB. 200, HB. 205, SB 1072, SB 1073 - did not pass
Texas - HB 1545; HB 1933; SB 797 - died at end of regular session
Vermont - H. 178, S. 148 - did not pass by end of session.*
West Virginia - H 2263 - did not pass


Maine Rx Plus Enacted:

Implementing Maine Rx+:
The following description is based on a conversation with a Maine state official in November 2003:

Phase I starts January (17th), 2004. People with incomes of up to 350% of poverty (or with high drug costs) will be able to buy any drug on the Medicaid preferred drug list for the Medicaid price. The state will pay its standard Medicaid dispensing fee for each prescription. The difference between the retail price and the Medicaid price will be covered by the pharmacist. (Maine's spokesperson explained that the pharmacists are willing to do this to retain the business of people who began buying drugs from them when Healthy Maine was in place.)

In March, 2004,Maine will begin negotiating with manufacturers to try to get rebates on Maine Rx+ drugs. Any drug on which there is a rebate will be classified as "super-preferred" and the list of super-preferred drugs and the amount of discount will be made available to consumers and physicians. If the rebate negotiations are successful, the state will not use prior authorization as a management tool and will begin Phase II sometime late in 2004 using the rebates negotiated as a way of giving additional discounts. If the negotiations are not successful, the state will resume discussions with CMS about its options for encouraging manufacturer rebates.


In separate actions Maine (2003), Montana (2003), New Mexico (2002 & 2003), Ohio (2002), South Dakota (2003) and Vermont (2000, 2002) also enacted recent laws for discount programs, but these use different legal structures that probably are not affected by the Maine court challenge. At least a dozen additional states are considering other types of discount bills in 2003. Maine Rx news analyses:

Maine Rx Plus Enacted:

Earlier court history:

      • U.S. Supreme Court heard arguments in Maine Rx case on Jan. 22, 2003
      In a closely watched case, the U.S. Supreme Court is considering the validity of the Maine Rx law- This law authorized a discounted price for any eligible resident who enrolls in the program. The program relies on state-based manufacturer rebates to achieve the lower price. Maine Rx is not a Medicaid program, and is legally separate from the 2001 statute that established Health Maine Prescriptions. More:

Court Docket: Case No. 01-188; Status
Title: Pharmaceutical Research and Manufacturers of America, Petitioner v. Kevin Concannon, Commissioner, Maine Department of Human Services, et al.
Lower Court: United States Court of Appeals for the First Circuit July 31, 2001 (00-2446)
(partial history)
Sep 19 2002 Brief amicus curiae of Pacific Legal Foundation filed.
Sep 20 2002 Brief of petitioner Pharmaceutical Research & Manufacturers of America filed.
Sep 20 2002 Brief amici curiae of International Patient Advocacy Association, et al.; Chamber of Commerce of the United States of America; Washington Legal Foundation, et al.; Long Term Care Pharmacy Alliance; Legal Services Orgs. Representing Medicaid Beneficiaries; amicus curiae of United States filed.
Sep 25 2002 Order extending time to file respondent's brief on the merits to and including November 6, 2002.
Nov 6 2002 Brief of respondents Kevin Concannon (Maine), et al. filed.
Nov 6 2002 Brief amici curiae of National Conference of State Legislatures, et al. filed.
Nov 6 2002 Brief amici curiae of AARP, et al. filed.
Nov 6 2002 Brief amici curiae of Massachusetts, et al. filed.
Nov 6 2002 Brief amici curiae of Maine Council of Senior Citizens, et al. Filed
Jan 22 2003 ARGUED.
May 19 2003 - Judgment of the Appeals Court affirmed

 

HEALTHY MAINE program providing reduced drug costs is struck down
    • 1975 law (amended) 36 M.R.S. § 6161 - 6166 - Elderly low-cost drug program - This law established Maine's senior pharmaceutical assistance program. It has been amended several times to expand the eligibility definition and adjust the benefit. The year 2000 eligibility is set at an annual income of $15,244 for an individual and $20,461 for a married couple..

    Descriptions

    : Maine Department of Human Services - Prescription Drug Assistance Handbook - this 15 page factual manual includes explanations of the various public and private programs in operation as of August 2003. The bullets below are links to sub-headings or agency web sites.

     
     
     
     
     
    • Retail Drug Pricing Survey conducted by The Bureau of Elder and Adult Services, updated in October 2003. The information was collected to assist Maine's older people and adults with disabilities in making decisions about their medication purchases.

    Earlier court and implementation activities

      [PhRMA v. Commissioner, Maine Department of Human Services, 1st Cir., 00-2446]
      [Pharmaceutical Research and Manufacturers of America v. Concannon, U.S. Supreme Court, 01-188]

      Manufacturer Pull-outs

      Northern New England Tri-State Coalition:

       

       

      News Stories

        Industry, professional and advocacy opinions


          Links to

          NCSL: State Pharmaceutical Assistance Programs

          NCSL: Prescription Drug Discount, Bulk Purchasing and Price-Related Legislation
          :                     (web links are posted by newspapers, and are subject to change without notice)           The Governors of Maine, New Hampshire and Vermont met in spring 2000 (separate from legislative leaders), and formed a Tri-State Coalition "to see if some concerted action among the states could ... help their citizens save money on prescription costs". They "concluded that it would be worthwhile to see if aggregating the pharmaceutical purchasing of several populations". The group issued a Request for Proposals to the PBM (Pharmaceutical Benefit Management) industry in late October, with eight companies responding by their January 2001 deadline. On May 25, 2001 the Coalition announced that First Health Services Corp. of Virginia would administer the program. The goal is to have the program in operation in 2002, although Maine has an existing separate contract that may affect its role in a multi-state arrangement.
          See Tri-State Coalition details online, including a link to the full text of the RFP (100 pages).
          News stories:           : In August and September, 2000 three pharmaceutical manufacturers, SmithKline Beecham, Bristol-Myers Squibb Co. and Astra-Zeneca Pharmaceuticals PLC announced they no longer would ship products to Maine, although their drugs can still be delivered into the state. According to an Associated Press report, Bristol-Myers spokesman Pat Donohue said Maine's law discourages investment in new medicines. ''We look at the law as having a detrimental impact,'' Donohue said. Astra-Zeneca spokeswoman Rachel Bloom called the company's drug shipping policy ''a business decision.'' Human Services Commissioner Kevin Concannon said he did not believe the move would have any impact on patient prices.
          • Maine Rx Implementation Delayed:
          • Legal Challenges
          • On May 16, 2001, the United States Court of Appeals for the 1st Circuit issued an opinion described as "allowing the state to begin putting the law in place." The ruling stated in part, on Medicaid, "we perceive no conflict between the Maine act and Medicaid's structure and purpose." The text of the U.S. Court of Appeals opinion (00-2446) is linked online [31 pages]. An earlier federal court injunction issued October 26 delayed implementation. On May 30, 2001 the Pharmaceutical Research and Manufacturers of America (PhRMA) asked the full 1st Circuit appeals court to reconsider that decision. On June 14, the federal court "rejected" such reconsideration. On July 31, 2001 PhRMA sought an appeal to the U.S. Supreme Court. (See details above). However, a "stay" of the court order means that the First Circuit ruling has no effect until the Supreme Court completes its role.
          • States Poised to Lower Prescription Drug Prices As First Circuit Court Of Appeals Rules Against PhRMA - statement by Center for Policy Alternatives, May 17, 2001
          • Industry request rejected by federal court - news story, Lewiston Sun-Journal, June 15, 2001
          • In the earliest step, on October 26, 2000 the federal District Court ruled in PhRMA's favor on the preliminary injunction, preventing the state from moving ahead with its planned implementation of the mandatory manufacturer participation in the Maine Rx program. In his ruling, the judge stated, "I find the plaintiff's [PhRMA's] likelihood of success on the merits of most of its constitutional challenges to be overwhelming." In addition, the Court stated that the plan to use prior authorization in Medicaid to "leverage drug manufacturer rebates for the benefit of uninsured citizens" would conflict with the Medicaid program's purpose- to provide medical services to Medicaid enrollees.
          On August 12, 2000, Maine's new law, Chapter 786, became effective under the state constitution. Department of Human Services Commissioner Kevin W. Concannon announced December 15 that the state will delay the start of the Maine Rx Program beyond the original start date of January 1, 2001. The Commissioner also announced plans to focus efforts on signing selective rebate agreements with the pharmaceutical manufacturers, which manufacture the 100 most frequently, prescribed drugs in the state. As of the end of December, 2000, 69 drug companies, described as mostly generic and smaller manufacturers, had agreed to negotiate discount prices; another 280 companies had not responded. In mid-March, state officials put the program "on hold". Although Maine received a court opinion favorable to the state law on May 16, 2001, the state has halted implementation. : In August 2000 the Pharmaceutical Research and Manufacturers of America (PhRMA) filed suit in federal district court to block implementation of that law. On October 19 the federal judge heard arguments on the case. Justice D. Brock Hornby issued a preliminary injunction on October 26 that prevents parts of the law from taking effect until a constitutional challenge is fully heard. In particular the ruling prevents "penalizing manufacturers by placing their drugs on prior listing status for refusing to negotiate..." and prevents enforcing the "illegal profiteering portion of the statute."
          (Details below under "News" and "Opinions"). The case was appealed to the U.S. Court of Appeals for the 1st Circuit, which heard oral arguments on March 5, 2001. During oral argument, PhRMA's attorney said the statute amounts to "an extraterritorial regulation of a transaction that is not taking place in Maine", and Judge Hugh Bownes said that the price rebate required from participants in the program "sounds like a tax that Maine is imposing on the wholesale distributors." "The state is trying to negotiate the best deal it can" stated Assistant Attorney General Andrew Hagler.

          The Healthy Maine program, which allowed seniors to purchase prescriptions through a Medicaid waiver, was halted by a U.S. Court of Appeals ruling on December 24, 2002. The program used a waiver approved January 18, 2001, to pass the discount prices obtained by the state Medicaid program on to seniors with incomes up to 300% of federal poverty. The ruling affects most of the 110,000 people already enrolled in Maine; it also may delay or affect 2002 laws enacted in Hawaii, New Mexico and Vermont (and considered in several others).

          Status of state laws

          : The ruling does not directly invalidate state laws- it focuses on the limitations of the federal Department of Health and Human Services to approve a program that does not guarantee any specified state financial contribution. In fact, Maine's law, passed five months after the waiver approval, provides a 2% state contribution. The court ruling states that this financial modification "has yet to be considered or approved by the Secretary" - enough reason to strike down the 2001 waiver. The court did not rule on "whether the 2% subsidy is sufficient to trigger the rebate obligations under the Act", so future state applications or laws may be modified to conform to the ruling. Maine's Commissioner Kevin Concannon concluded, "We believe that with the help of Secretary Thompson we can fix the problem the court has identified and restart the program in the near future." Separately, the ruling has no impact on "Pharmacy Plus" waivers, where state and federal financial contributions are clearly defined.
          Recent information:
          • Court decision: PhRMA v. Thompson (II) (U.S. Cir. DC, 02-5110), 12/24/02 [4 pages]
          • "Savings drop in drug program for elderly." -Media update notes adverse impact on all 112,000 enrollees as of January 9, 2003. Portland Press-Herald.
          • U.S. Senator Negotiates w/ HHS - news article, Portland Press Herald, 2/11/03
          • PhRMA Litigation fact sheet, 12/5/02
          • Maine Dept. of Human Services statement, 12/26/02
          • In an earlier step, on February 25 the U.S. District Court for the District of Columbia upheld the Healthy Maine Prescriptions program that provides drug discounts to people who are otherwise ineligible for Medicaid. The program includes eligibility up to 300 percent of federal poverty guidelines. ($26,580 for individuals and $35,820 for couples in 2002. A family of four is eligible under the income guidelines if it makes less than $54,300 a year). At least four additional states, Hawaii, Maryland, New Hampshire and Vermont, have sought approval for a similar state coverage expansion. The 31-page court decision provides another updated legal analysis on what actions may be allowed by HHS and state laws. - On January 19, 2001, HHS Secretary Shalala granted a waiver to give about 225,000 Maine residents who lack drug coverage the right to buy prescriptions at Medicaid prices. The Medicaid waiver would allow those without insurance but with incomes up to 300 percent of the federal poverty level to purchase drugs at a discount of about 25 percent. According to state spokespersons, guidelines will cover about 70 percent of those who would have seen similar price reductions under the new Maine Rx Program. In a legally separate action, a ruling by the federal Court of Appeals in D.C. on June 8, 2001 struck down HCFA's approval of the waiver granted to Vermont. The decision does not directly impact Maine.
          • 2001 Medicaid Waiver
          • Maine Waiver Request cover letter, Jan. 5, 2001
          • Text of Maine Waiver Request, Jan. 5, 2001 [link updated 8/02]
           "Gov. John Baldacci submitted a redesigned and renamed Maine Rx program to the Legislature now that the U.S. Supreme Court has given the state a green light to launch the discount-prescription plan for uninsured Mainers. The retooled program, which Baldacci has dubbed Maine Rx Plus, would provide discounts to fewer people than the original plan, and at a lower cost to the state. The latest plan is "the next step in our continuing effort to provide meaningful relief for the thousands of people who cannot afford prescription drugs," Baldacci said at a State House news conference on May 30."          In June 2003, the Maine legislature enacted a new law and program, renamed Maine Rx +, that has different eligibility requirements and a different pricing and rebate arrangement.
          [See Maine LD 1634/ SP 560, signed by governor June 24, 2003]
          Common Questions on Maine Rx+ - as published 6/19/03
          Maine Rx Plus Launches January 17, 2004 - news release from Governor, 1/13/04

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