WASHINGTON (AP) - The Supreme Court on Monday gave a green light to a novel state program to force drug manufacturers to lower prices on prescription drugs, but warned that the program may not survive further court challenges.
The 6-3 ruling was a defeat for drug makers who claimed that Maine's program, called Maine Rx, violates federal law.
The program, which has never taken effect, would use the state's buying power under the federal Medicaid law to cut drug prices by 25 percent for the working poor, retirees and others who do not receive health coverage or drug benefits through their jobs.
The Supreme Court's ruling does not give Maine what it really wanted, an unqualified endorsement of the drug plan. Instead, the high court said that drug makers did not adequately show why the plan should be prevented from taking effect. It has been on hold pending the court fight.
"By no means will our answer to that question finally determine the validity of Maine's Rx program," Justice John Paul Stevens wrote for the court.
Only Justices David Souter and Ruth Bader Ginsburg fully agreed with Stevens' analysis of the potential benefits of the Maine program, but an additional three justices agreed that the program should have a chance to take effect.
Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor and Anthony Kennedy dissented on that point. They would have left in place a lower court order blocking the program.
Maine Rx, enacted in 2000, would let the state negotiate for lower prices on behalf of more than 300,000 residents who pay for prescription drugs. If prices didn't drop in three years, the state could impose price controls.
Spending on prescription drugs has increased by 15 percent or more annually in recent years, and more than two dozen states had urged the Supreme Court to uphold Maine's effort to hold down the escalation.
Supporters of the Maine program contend it is a response to years of inaction in Congress, which has repeatedly tried and failed to add prescription drug coverage to the federal Medicare program for the elderly.
Sen. Olympia Snowe, a Republican from Maine, said she hoped the ruling would push Congress to finally resolve the prescription drug impasse.
"This decision is a victory for consumers who deserve access to more affordable prescription drugs," Snowe said.
Labor and retiree groups support the Maine approach. Twenty-eight states supported Maine's position. A dozen states had said they were poised to adopt similar laws if the Supreme Court ruled in Maine's favor.
Ray Simpson, 76, of Saco, Maine, said the Supreme Court ruling was a relief. He said he retired in December and learned the hard way the costs of paying out-of-pocket for prescriptions.
"It was unbelievable when I had to pay my first prescription," Simpson said. His prescription for Lipitor went from $20 for a 90-day supply to $98 for a 30-day supply. "You have to pay through the nose."
Simpson's wife, Carleen, was just diagnosed with breast cancer and learned she must pay $210 a month for a new prescription. Carleen Simpson plans to get the prescription filled in Canada, he said.
The Bush administration and business groups and conservative legal organizations sided with the drug industry.
Some justices had suggested in January, when the case was argued, that the dispute be resolved by a lower court or by the federal Department of Health and Human Services, which oversees Medicaid. Medicaid, a joint program of the federal government and the states, funds health care for the poor and disabled.
The Supreme Court left the door open for either step.
State officials have said the program simply does for one state what other countries have done for all their citizens - force the drug companies to bargain. Prescription drug prices are often much lower in Canada, in part because of government price caps.
The case is Pharmaceutical Research and Manufacturers of America v. Concannon, 01-188.
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