Pharmaceutical Research and Mfrs. of America v. Walsh

538 U.S. 644 (2003)


Facts: Congress enacted a cost-saving measure requiring drug companies to pay rebates to States participating in Medicaid.  Ten years later, the state of Maine enacted a measure to try to save its uninsured citizens more money.  Drug manufacturers challenged the constitutionality of the state program, saying that it is preempted by the federal Medicaid statute.  They also claimed that the state was unconstitutionally regulating out-of-state commerce, which only Congress is allowed to do under the Constitution.  The district court granted a preliminary injunction to the drug companies prior to considering any factual issues.  The state of Maine appealed to the Court of Appeals, which reversed.  Then the drug companies appealed to the U.S. Supreme Court.


Issue: (1) Is the Maine statute preempted by the federal statute?  (2) Is the Maine statute unconstitutional under the “dormant” or “negative” Commerce Clause?






Conclusion: The decision of the Court of Appeals is affirmed


Back to Casebook Notes