OCTOBER TERM, 2002
certiorari to the united states court of appeals for the first circuit
No. 01-188. Argued January 22, 2003—Decided May 19, 2003
A State participating in Medicaid must have a medical assistance plan approved by the Secretary of Health and Human Services (HHS). In response to increasing Medicaid expenditures for prescription drugs, Congress enacted a cost-saving measure in 1990 that requires drug companies to pay rebates to States on their Medicaid purchases. States have since enacted supplemental rebate programs to achieve additional cost savings on Medicaid purchases and purchases for other needy citizens. The purpose of the "Maine Rx" Program is to reduce prescription drug prices for state residents. Under the program, Maine will attempt to negotiate rebates with drug manufacturers. If a company does not enter into a rebate agreement, its Medicaid sales will be subjected to a "prior authorization" procedure that requires state agency approval to qualify a doctor's prescription for reimbursement. Petitioner, an association of nonresident drug manufacturers, challenged the program before its commencement date, claiming that it is pre-empted by the Medicaid Act and violates the negative Commerce Clause. Without resolving any factual issues, the District Court entered a preliminary injunction preventing the statute's implementation, concluding, inter alia, that any obstacle, no matter how modest, to the federal program's administration is sufficient to establish pre-emption. The First Circuit reversed.
Held: The judgment is affirmed.
249 F. 3d 66, affirmed.
Justice Stevens delivered the opinion of the Court with respect to Parts I, II, III, and VI, concluding that petitioner has not carried its burden of showing a probability of success on the merits of its Commerce Clause claims. Its arguments—that the rebate requirement constitutes impermissible extraterritorial regulation and that it discriminates against interstate commerce in order to subsidize in-state retail sales—are unpersuasive. Unlike the price control statute invalidated in Baldwin v. G. A. F. Seelig, Inc., 294 U. S. 511, and the price affirma-Page: Index 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: October 4, 2007