Judge rules against Maine drug rebates

A Maine law that forces pharmaceutical companies to provide rebates on drugs sold to uninsured state residents is unconstitutional and is unlikely to withstand legal challenge, a federal judge ruled Thursday. Judge D. Brock Hornby of the U.S. District Court for the District of Maine issued a preliminary injunction preventing Maine from enforcing the law until there is a final ruling in litigation brought by the Pharmaceutical Research and Manufacturers of America against Maine.

Hornby said that the law violates two provisions of the U.S. Constitution, one prohibiting states from regulating trade in other states and a provision mandating the supremacy of federal over state laws when they conflict. He ruled that because most pharmaceutical companies sell their products to wholesale pharmacies located outside Maine, the state's efforts to mandate their pricing policies constitutes interference with interstate commerce. He also determined that "for the small proportion of transactions where manufacturers sell directly into Maine, the rebate program conflicts with the federal Medicaid program and is therefore preempted." ...