Maine bill becomes law

July 1, 2000

Pharmaceutical Representative

Independent Maine governor Angus King signed into law a bill that would allow the state of Maine to collectively bargain for pharmaceutical prices. The bill that passed is different from a bill previously rejected by King in that it does not use Canadian prices as a yardstick. The new bill requires pharmaceutical companies to voluntarily bring prices down to levels the federal government pays, which is currently discounted up to 15.1% from retail prices. The state will implement a mandatory pricing reduction to mirror the government's discount. These mandatory discounts could be put into place as early as July 1, 2003.

Independent Maine governor Angus King signed into law a bill that would allow the state of Maine to collectively bargain for pharmaceutical prices. The bill that passed is different from a bill previously rejected by King in that it does not use Canadian prices as a yardstick. The new bill requires pharmaceutical companies to voluntarily bring prices down to levels the federal government pays, which is currently discounted up to 15.1% from retail prices. The state will implement a mandatory pricing reduction to mirror the government's discount. These mandatory discounts could be put into place as early as July 1, 2003.

The law would also require doctors to pre-authorize medicines from companies that don't voluntarily lower prices.

The pharmaceutical industry said the new law is illegal and plans to oppose it in the courts. "The only way that you are supposed to prior authorize medicines under Medicaid is for a legitimate medical reason," said Jeff Trewhitt, spokesperson for the Pharmaceutical Research and Manufacturers of America. "And this retaliation that's being called for is for reasons of cost, - not even reasons of cost within the Medicaid program [but] within an outside program, which is why the legality of that is being looked at." Trewhitt also said the bill may violate interstate commerce laws.

The legislature of the state of Vermont was considering a similar bill, but adjourned for the session without passing price control measures. PR

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