Pharmaceutical Research and Mfrs. of America v. Walsh, 538 U.S. 644, 2 (2003)

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Cite as: 538 U. S. 644 (2003)

Syllabus

tion statute struck down in Healy v. Beer Institute, 491 U. S. 324, Maine Rx does not regulate the price of any out-of-state transaction by its express terms or its inevitable effect. Nor does Maine Rx impose a disparate burden on out-of-state competitors. A manufacturer cannot avoid its rebate obligation by opening production facilities in Maine and would receive no benefit from the rebates even if it did so; the payments to local pharmacists provide no special benefit to competitors of rebate-paying manufacturers. West Lynn Creamery, Inc. v. Healy, 512 U. S. 186, distinguished. Pp. 668-670.

Justice Stevens, joined by Justice Souter, Justice Ginsburg, and Justice Breyer, concluded in Parts IV and VII:

(a) The answer to the question before the Court—whether petition-er's showing was sufficient to support the District Court's injunction— will not determine the validity of Maine's Rx Program since further proceedings may lead to another result. Moreover, the Secretary may view Maine Rx as an amendment to its Medicaid Plan that requires his approval before becoming effective. As the case comes to this Court, the question is whether there is a probability that Maine's program was pre-empted by the federal statute's mere existence. Therefore, there is a presumption that the state statute is valid, and the question asked is whether petitioner has shouldered the burden of overcoming that presumption. Pp. 660-662.

(b) At this stage of the litigation, petitioner has not carried its burden of showing a probability of success on the merits of its claims. P. 670.

Justice Stevens, joined by Justice Souter and Justice Ginsburg, concluded in Part V that petitioner's showing is insufficient to support a finding that the Medicaid Act pre-empts Maine's Rx Program insofar as it threatens to coerce manufacturers into reducing their prices on non-Medicaid sales. Petitioner claims that the potential interference with Medicaid benefits without serving any Medicaid purpose is prohibited by the federal statute. However, petitioner must show that Maine Rx serves no such goal. In fact, Maine Rx may serve the Medicaid-related purposes of providing benefits to needy persons and curtailing the State's Medicaid costs. While these purposes would not provide a sufficient basis for upholding the program if it severely curtailed Medicaid recipients' prescription drug access, the District Court erred in assuming that even a modest impediment to such access would invalidate the program. The Medicaid Act gives States substantial discretion to choose the proper mix of amount, scope, and duration limitations on coverage as long as care and services are provided in the recipients' best interests. Alexander v. Choate, 469 U. S. 287, 303. That a State's decision to curtail Medicaid benefits may have been motivated by a state

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