Maine has completed drug discount agreements with 10 small pharmaceutical companies as part of the development of its Maine Rx rebate program.

Ciba Vision is among the manufacturers that have agreed to provide products at a discount for the program, designed to offer drugs at a discounted rate to the 325,000 residents without prescription drug coverage.

Maine sent letters to approximately 450 manufacturers in the first week of August and requested that they sign and return the rebate agreements by Nov. 1.

"The Maine Rx program would provide your company's products to an ever growing population and a population that would exceed the current Medicaid population, which is currently 170,000 people," the letter states.

The letter adds that the law "requires the Department [of Human Services] impose prior authorization requirements in the Medicaid program under this title, as permitted by law, for the dispensing of prescription drugs provided by those manufacturers and labelers who do not enter into rebate agreements."

The state is soliciting bids for a pharmaceutical benefit management company to administer the program. Five PBMs have expressed interest, the state reports.

Maine will begin enrolling uninsured residents into the program in November. Starting Jan. 1, participants would be entitled to discounts at the Medicaid program's rate, 15.1%. By October 2001, the program seeks rebates at the level of the Federal Supply Schedule, 24% (¹ Also see "Maine Rx Pricing Law Seeks FSS-Level Prices By October 2001" - Pink Sheet, 15 May, 2000.).

SmithKline Beecham has stopped shipping drug products directly to Maine in an effort to avoid being subject to the law, which requires discounts from all manufacturers doing business in the state.

State officials maintain that the company is still doing business in Maine, citing Medicaid and VA contracts.

SmithKline said the move was a business decision designed to forestall any unknown consequences from the law, which the company feels is vague. At the same time, SB maintains that shipping to out-of-state warehouses will ensure access to the company's products for Maine citizens without increased cost.

Bindley Western is the only wholesaler with a warehouse in Maine. Instead of shipping to Bindley's Portland facility, SmithKline is delivering products to the wholesaler's other facilities. The products are then shipped by Bindley into the state.

Two other manufacturers are understood to be avoiding shipping into the state by using similar procedures.

Bindley Western said the manufacturer actions should not affect staff levels at its Maine facility, but would increase the lead-time to deliver drugs to the state by a day. The company is examining whether the practice marginally increases costs.

SmithKline's pending merger with Glaxo Wellcome may make it easier for the company to take the lead in industry's commercial response to the Maine law. The government relations positions in the combined company will be filled by Glaxo Wellcome execs, so if the political or legal response to SmithKline's action is unacceptable there will be an easy opportunity to switch tactics.

The Pharmaceutical Research & Manufacturers of America is leading the industry's legal response to the law. The trade group announced Aug. 11 that it is filing suit against the state to prevent enforcement.

Other border states are moving forward with joint action on pharmaceutical pricing. The Northeast Legislative Association On Prescription Drug Prices elected its executive body at an Aug. 5 meeting in Providence, R.I. Vermont Senate President Pro Tem Sen. Peter Shumlin (D) will chair the body. Massachusetts Senate Ways & Means Committee Chairman Mark Montigny (D) was elected vice-chair.

The association, comprising legislators from the six New England states along with New York and Pennsylvania, has been discussing a regional drug discount program.

The states may hire a coordinator in the next few months who will examine what changes in state laws would be necessary to move forward with collective drug purchasing or price control mechanisms.

The association will reconvene in New Hampshire two weeks after the November elections.

Maine Signs Rx Rebate Deals With 10 Small Firms; SB Stops Shipping To State

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