Supremes Mull Maine Discount Prescription Program

But the criticism did not point to a specific outcome, as several justices suggested that the case should be returned to lower courts for further action ' not only by judges but by the executive branch. Justice Sandra Day O'Connor noted that the Bush Administration has approved other state prescription drug plans, though Phillips said that 'they are in litigation as we stand here.'

Justice Stephen Breyer suggested that the case be sent down to lower courts so Maine can submit its program to the Secretary of Health and Human Services for review. State officials did not submit the program for approval in advance.

'Why are you bothering us?' Scalia asked rhetorically at one point. 'The secretary can stop it. Why do we have to get involved?' Phillips said seeking the secretary's opinion would be acceptable ' an easy concession, perhaps, since the Bush Administration has already opined that the Maine program violates Medicaid law. Neither Phillips nor other lawyers and justices spent much time on the other argument against the Maine plan ' that it violates the commerce clause because, with no drugs manufactured in Maine, the state is in effect regulating out-of-state transactions.

Deputy Solicitor General Edwin Kneedler said the Maine program was flawed because state changes affecting Medicaid 'must serve some Medicaid purpose.' By going well beyond Medicaid recipients in a way that burdens the Medicaid program, Kneedler indicated, the Maine program fails that requirement.

Assistant Maine Attorney General Andrew Hagler asserted that the state was not required to submit the program to the Secretary for approval. Chief Justice William Rehnquist also appeared to view the drug program as a 'free-standing' statute not directly tied to Medicaid.

The possibility that the court might sidestep the issues in the case and send the case away in one form or another left advocates for state innovations frustrated. More than half the states are considering legislation similar to Maine's, and many are holding up action pending the outcome of the case.

'All the other states are looking for guidance from the court,' said Bernie Horn, policy director of the Center for Policy Alternatives in D.C., who attended the hearing. 'Based on the arguments today, I don't know what to tell them.'

The Supreme Court appears torn over what to do with Maine's discount prescription drug program, which has been challenged by the pharmaceutical industry and the Bush Administration as a violation of the federal Medicaid law.

At issue in Pharmaceutical Research and Manufacturers of America v. Concannon, 01-188, is a Maine program enacted in 2000 that encourages pharmaceutical companies to discount their drugs for all Maine consumers through a rebate program. Physicians serving Maine Medicaid recipients who need drugs made by companies that do not cooperate would have to go through a preauthorization process with the state.

The justices heard Carter Phillips of Sidley Austin Brown & Wood, representing the pharmacy group, attack Maine for turning Medicaid recipients into 'pawns' and 'hostages' for a program that is aimed at benefiting non-Medicaid recipients, including the 'Stephen Kings of the world.' He was referring to the best-selling author of horror books, who lives in Maine. Justice Antonin Scalia also described the program as a 'shakedown' of drug companies.

But the criticism did not point to a specific outcome, as several justices suggested that the case should be returned to lower courts for further action ' not only by judges but by the executive branch. Justice Sandra Day O'Connor noted that the Bush Administration has approved other state prescription drug plans, though Phillips said that 'they are in litigation as we stand here.'

Justice Stephen Breyer suggested that the case be sent down to lower courts so Maine can submit its program to the Secretary of Health and Human Services for review. State officials did not submit the program for approval in advance.

'Why are you bothering us?' Scalia asked rhetorically at one point. 'The secretary can stop it. Why do we have to get involved?' Phillips said seeking the secretary's opinion would be acceptable ' an easy concession, perhaps, since the Bush Administration has already opined that the Maine program violates Medicaid law. Neither Phillips nor other lawyers and justices spent much time on the other argument against the Maine plan ' that it violates the commerce clause because, with no drugs manufactured in Maine, the state is in effect regulating out-of-state transactions.

Deputy Solicitor General Edwin Kneedler said the Maine program was flawed because state changes affecting Medicaid 'must serve some Medicaid purpose.' By going well beyond Medicaid recipients in a way that burdens the Medicaid program, Kneedler indicated, the Maine program fails that requirement.

Assistant Maine Attorney General Andrew Hagler asserted that the state was not required to submit the program to the Secretary for approval. Chief Justice William Rehnquist also appeared to view the drug program as a 'free-standing' statute not directly tied to Medicaid.

The possibility that the court might sidestep the issues in the case and send the case away in one form or another left advocates for state innovations frustrated. More than half the states are considering legislation similar to Maine's, and many are holding up action pending the outcome of the case.

'All the other states are looking for guidance from the court,' said Bernie Horn, policy director of the Center for Policy Alternatives in D.C., who attended the hearing. 'Based on the arguments today, I don't know what to tell them.'