Courts step aside, Maine Rx takes root

Sunday, January 18, 2004

WASHINGTON POLITICS: Bart Jansen

A Maine program offering prescription-drug discounts to 275,000 lower-income residents began Saturday, putting the state again at the forefront of national policy while still illustrating the hurdles to putting drugs within easier reach for the ailing poor.

The latest version is called Maine Rx Plus. It's a hybrid of the pioneering program to lower the price of drugs that suffered lengthy challenges from manufacturers in federal courts - until the U.S. Supreme Court gave the state permission to try the experiment.

Basically it's for the uninsured because anyone with insurance already pays less through co-payments and deductibles. Maine Rx Plus offers people earning up to 3 1/2 times the federal poverty line a discount card to buy their prescriptions at prices negotiated by the largest customers, like the government does for Medicaid patients.

State officials estimated it could save customers 10 percent to 25 percent off name-brand drugs, and perhaps 60 percent off generic drugs. Industry observers have warned that savings from a similar federal proposal would lean toward the lower end of that scale.

Even so, Maine's program is months ahead of what the federal government hopes to accomplish in April or May. That's when a discount card will be offered to Medicare recipients for two years until a federal benefit to help pay for drugs is put in place. The federal program also offers $600 in assistance each of the next two years to the poorest recipients earning up to 1 1/2 times the federal poverty line.

Mainers on Medicare will still enjoy the $600 in aid. But advantages of the state discount card are that it's available now and to those who earn as much as $31,400 as individuals, $42,420 as couples and $64,400 as part of a family of four.

"With this program, Maine pharmacies have agreed to work with us to help about 275,000 Maine citizens attain needed drugs at steep discounts," Gov. John Baldacci said.

Two catches are that chain pharmacies aren't participating and the discounts still aren't as steep as those next door in Canada.

ABOUT 110 STORES statewide signed up to participate in the program, including those in Hannaford and Shaw's supermarkets. But two-thirds of the state's 300 pharmacies, including those operated by Rite Aid, CVS and Community Pharmacies, have refused.

Basically, Maine's government is using its market power to organize customers for discounts comparable to the largest insurers. But the pharmacy chains contend that their profit margins are too small to swallow more discount customers.

This last point is the one that highlights what is missing - at least for now - from Maine Rx Plus.

The reason that the industry group Pharmaceutical Research and Manufacturers of America challenged the 2000 Maine Rx program all the way to the Supreme Court is because it threatened to hinder access to the state's Medicaid patients unless drug makers negotiated lower prices for everyone.

Drug makers called it an illegitimate expansion of Medicaid. But state officials argued it wasn't a Medicaid law at all, just a tactic to bring drug makers to the negotiating table.

In a 6-3 ruling last May, the justices allowed the program to go forward. But they withheld judgment on whether it would succeed if federal officials found problems with it.

Rejection of another Maine program had already come down from the U.S. Circuit Court of Appeals for the District of Columbia. That court killed an experimental Medicaid discount program called Healthy Maine Prescriptions in December 2002 because provisions hadn't been formally approved by federal health officials.

State officials spent months tinkering with Maine Rx and unveiled the latest discount card as "Plus."

Trish Riley, director of the governor's Office of Health Policy and Finance, said when negotiations with drug makers begin in the spring, the state may not need the threat of hindering access to Medicaid patients. If 200,000 people sign up for Maine Rx Plus, she said the state will have a powerful constituency to win manufacturer discounts so that pharmacists don't shoulder the entire burden.

"We think we're going to have enough people here," Riley said.

About 73,000 residents who had Healthy Maine cards got automatic invitations to Maine Rx Plus. One thousand people swamped the state with calls the day after publicity began last week.

"It's been wild," Riley said.

Meanwhile, the mirage of steeper discounts shimmers across the border in Canada. Mainers already shuttle by the busload to the oasis where prices are cut in half, lately with the bonus of a favorable exchange rate.

BUT CONGRESS HAS shown no inclination to allow wider reimportation - to avoid long bus excursions. The Food and Drug Administration warns the drugs might not meet American standards for safety and effectiveness. Advocates for the drug industry contend that curbing their prices would hurt the search for newer, innovative drugs.

In addition, the law creating the Medicare benefit forbids the government from negotiating for lower prices.

House Speaker Dennis Hastert, R-Ill., suggested last month after meeting with U.S. Trade Representative Robert Zoellick and FDA Commissioner Mark McClellan that the disparity in pricing should be fixed - with Canada charging more.

"Americans shouldn't be forced to subsidize the health care for the rest of the world," Hastert said. "By getting fairer pricing in Canada, American consumers will also get fairer prices for their prescription drugs."

For anyone in a border state choosing between buying drugs or buying food and heating oil, lower prices in Canada retain a powerful allure.

The executive director of the National Legislative Association on Prescription Drugs described Maine Rx Plus as one of the best drug programs in the United States. But she added that consumers shopping for the lowest prices must still look to Canada.

"Reimportation is attractive because of the lower prices," said Riley of Maine. "We have a lot of doctors with dual licenses."

Staff Writer Bart Jansen can be reached at 202-488-1119 or at bjansen@pressherald.com.

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