Judge Rejects Bush's Drug Discount Plan Again

January 30, 2003
For the second time, a federal judge rejected the Bush Administration's plan to launch a Medicare drug discount card program, ruling that the government lacked the statutory authority to proceed.

U.S. District Judge Paul Friedman issued a permanent injunction barring the U.S. Department of Health and Human Services from proceeding with the program, saying it went beyond the authority given the government when the Medicare program was created in 1965.

The legal challenge to the plan came from the National Association of Chain Drug Stores and the National Community Pharmacists Association, a Washington trade association that represents 35,000 retail drug stores, most of them operated by large drug and grocery chains.

"We applaud the government's good intentions but this isn't the way to do it," said S. Lawrence Kocot, the group's general counsel. "This is not so much about discounts as it is the future of Medicare."

The White House called it "a loss for millions of seniors who would have realized significant discounts on their prescription drugs." Medicare administrator Tom Scully said the administration would continue trying to implement the program and would seek Congressional authorization or perhaps appeal the judge's ruling.

Scully's department announced earlier this month (story) that it was accepting applications from companies wanting to participate in the program.