Pharmaceutical Research and
Mfrs. of America v. Walsh
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