The state would pool the purchasing power of participants in a new prescription-drug program. The idea is to obtain substantial discounts from suppliers similar to those provided to other large purchasers.The law imposes financial penalties on drug firms found to be overcharging for drugs or restricting supply. And if a drug fir doesn't comply with the program by offering rock-bottom prices, the state can require "prior authorization" before doctors prescribe its drugs to recipients of Medicaid government health-care assistance.

If negotiations with manufacturers fail to reduce prices significantly, the state could impose price controls in three years. Group Claims Constitutional Conflict In its suit, filed Thursday evening in U.S. District Court in Bangor, the industry group maintains that the Maine statute unconstitutionally interferes with the federal Medicaid program. The drug group also argues that the Maine law would unconstitutionally regulate transactions outside the state's borders. The group maintains that Maine is trying to force drug makers to produce discounts by threatening to block access by Medicaid beneficiaries to the products of noncooperating manufacturers.

"We fully understand the goal of state legislators to ensure affordable prescription medicines for their citizens, but this law is not the right solution," Marjorie Powell, the assistant general counsel of the drug industry group, said in a prepared statement Friday. Gov. Angus King said he expects that the state will prevail in the lawsuit, allowing Maine to begin signing up participants this fall. He said in a written statement that he was disappointed the drug industry group had adopted an adversarial approach instead of working with the state as a partner.

"All parties would have been better served if the industry group had decided to sit down and talk with us about their concerns on the implementation of this law rather than challenging its legality," Mr. King said. Maine Is at the Forefront Maine's effort has been among the most aggressive in New England, where legislators have been meeting for months to bring down prescription-drug prices.

-- (The Wall street Journal)