Could Maryland's health department legally require drug companies to pay rebates to keep their drugs covered under state-funded health programs?

Plain-English summary

Two members of the General Assembly's Committee on Administrative, Executive, and Legislative Review asked the Attorney General to review proposed emergency regulations that would let Maryland's Department of Health and Mental Hygiene limit which drugs were covered under two state-funded programs, Medical Assistance State-Only (MASO) and the Pharmacy Assistance Program, to drugs made by manufacturers that paid rebates to the State, modeled on a similar rebate scheme that federal law already required for Medicaid drugs. The legislators asked two things: whether the Department actually had the legal authority to do this, especially given that the General Assembly itself had failed to pass bills in 1991 and 1992 that would have granted that authority explicitly, and whether the rebate requirement was really an unconstitutional tax that only the legislature, not an executive agency, could impose.

The Attorney General answered yes to authority and no to the constitutional challenge. On authority, the opinion found a 1989 statute directing the Medical Assistance Program to "use its leverage as a high volume purchaser to promote cost effectiveness" gave the Department enough statutory basis for the rebate regulations, and concluded that the legislature's later failure to pass more specific rebate-authorization bills did not undercut that existing authority, since bills die in the legislative process for all sorts of reasons unrelated to disagreement with an agency's existing power. On the constitutional question, the opinion concluded the rebate was not a "tax" within the meaning of Article 14 of the Maryland Declaration of Rights, because it was money generated through an ordinary commercial relationship (effectively a discount tied to the State's drug purchases), not a compulsory exaction for general revenue, so no separate act of the legislature was constitutionally required to authorize it.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did Maryland's health department have legal authority to require pharmaceutical rebates without a specific rebate law passed by the legislature?
Yes. The opinion concluded that HG §15-103.1, a 1989 statute directing the Medical Assistance Program to use its purchasing leverage to promote cost effectiveness, together with the Department's general rulemaking authority under HG §2-104(b)(1), gave the Department sufficient statutory authority to adopt the proposed rebate regulations.

Did it matter that the General Assembly had tried and failed to pass bills specifically authorizing drug rebates in 1991 and 1992?
No. The opinion concluded that a legislature's failure to pass a bill confirming or expanding an agency's authority does not, by itself, undermine authority the agency already has under existing law, since bills can die for many reasons unrelated to disagreement with existing agency power, including in this case restrictive amendments added late in the process.

Was the pharmaceutical rebate requirement an unconstitutional tax that only the legislature could impose?
No. The opinion concluded the rebate was not a "tax" or "fee" under Article 14 of the Maryland Declaration of Rights, because it arose from an ordinary commercial relationship, in effect a price concession tied to the State's drug purchases, rather than a compulsory exaction collected to raise general revenue.

Why did the opinion compare the rebate to a bridge toll case from 1914?
The opinion relied on State Roads Commission v. Postal Telegraph Cable Co. to show that a State agency generating money through an ordinary commercial transaction, there, a fee for using a bridge, does not trigger Article 14's requirement of legislative consent, the same principle it applied to the drug rebate.

Background and statutory framework

Federal law already conditioned Medicaid coverage of most prescription drugs on manufacturers agreeing to pay quarterly rebates to the states under Section 1927 of the Social Security Act. Maryland's proposed emergency regulations extended a similar rebate condition, calculated the same way as the federal "basic rebate," to two purely state-funded programs not otherwise covered by the federal scheme: MASO and the Pharmacy Assistance Program, which together spent $19.5 million on prescription drugs in fiscal year 1991. The Department projected the new rebate requirement would save about $2.5 million for the remainder of that fiscal year.

On statutory authority, the opinion grounded its conclusion primarily in HG §15-103.1, enacted in 1989, which directs the Medical Assistance Program to use its purchasing leverage to promote cost effectiveness, reinforced by legislative history (including a 1988 memorandum from a state senator involved in drafting the provision, discussing the State's potential to obtain volume rebates from drug manufacturers) showing lawmakers had rebates specifically in mind when they passed the statute. The opinion addressed the legislators' concern about the failed 1991 and 1992 rebate-authorization bills by drawing on both Maryland and federal case law holding that a legislature's failure to enact a bill is an unreliable guide to the meaning of existing law, since bills can fail for reasons having nothing to do with whether the underlying authority already exists, a principle the opinion illustrated with a nearly identical federal case involving a Medicare and Medicaid drug reimbursement rule.

On the constitutional question, the opinion read Article 14 of the Maryland Declaration of Rights, which requires legislative consent for any "aid, charge, tax, burthen or fees," narrowly, relying on a 1914 Court of Appeals decision holding that a state agency's ordinary commercial fee-charging (there, tolls for a bridge acquired from a private owner) does not implicate Article 14. The opinion reasoned that the pharmaceutical rebate was likewise generated through a commercial relationship, effectively part of the price the State paid for drugs, rather than a compulsory exaction collected for general government revenue, the hallmark of a "tax" under both Maryland and U.S. Supreme Court case law. The opinion also found the General Assembly had supplied adequate legislative standards to guide the Department's exercise of this authority, satisfying separation-of-powers requirements given the practical difficulty of legislating detailed rules for a complex and changing health care market.

Citations and references

Statutes:

• 42 U.S.C. §1396s(a), (c), and (c)(1), federal Medicaid drug rebate requirements
• Section 1927(a), (a)(3), (c)(1), and (c)(2) of the Social Security Act, the federal Medicaid rebate program
• HG §2-104(b)(1), the Secretary's general rulemaking authority
• HG §15-103.1, directing the Medical Assistance Program to use purchasing leverage for cost effectiveness
• HG §15-103, mandating the Secretary to administer the Medical Assistance Program
• HG §15-105, reimbursement procedures
• HG §15-124, mandating a Pharmacy Assistance Program
• HG §15-101(c), defining "Program" for purposes of §15-103.1
• COMAR 10.09.03.05-1, the proposed MASO rebate regulation
• COMAR 10.45.02.05-1, the proposed Pharmacy Assistance Program rebate regulation
• Article 14 of the Maryland Declaration of Rights, requiring legislative consent for taxes and fees
• Article 8 of the Maryland Declaration of Rights, the separation of powers clause
• Senate Bill 493 (1991), a failed bill that would have specifically authorized drug rebates
• House Bill 194 (1992), a similar failed bill

Cases:

• Department of Transportation v. Armacost, 311 Md. 64, 74, 532 A.2d 1056 (1987), Maryland Court of Appeals
• Privette v. State, 320 Md. 738, 744, 580 A.2d 188 (1990), Maryland Court of Appeals
• Kaczorowski v. City of Baltimore, 309 Md. 505, 514, 525 A.2d 628 (1987), Maryland Court of Appeals
• Tucker v. Fireman's Fund Ins. Co., 308 Md. 69, 75, 517 A.2d 730 (1986), Maryland Court of Appeals
• Demory Brothers v. Board of Public Works, 20 Md. App. 467, 473, 316 A.2d 529 (1974), aff'd, 273 Md. 320, 329 A.2d 674 (1974), Maryland courts
• Bosley v. Dorsey, 191 Md. 229, 60 A.2d 691 (1948), Maryland Court of Appeals
• United States v. Wise, 370 U.S. 405, 411 (1962), U.S. Supreme Court
• American Trucking Ass'ns, Inc. v. Atchison, T. & S.F. Ry. Co., 387 U.S. 397, 418 (1967), U.S. Supreme Court
• American Medical Ass'n v. Mathews, 429 F. Supp. 1179, 1200 (N.D. Ill. 1977), federal district court
• State Roads Commission v. Postal Telegraph Cable Co., 123 Md. 73, 91 A. 147 (1914), Maryland Court of Appeals
• Welch v. Henry, 305 U.S. 134, 146 (1938), U.S. Supreme Court
• Meriwether v. Garrett, 102 U.S. 472, 513 (1880), U.S. Supreme Court
• Governor v. Exxon Corp., 279 Md. 410, 440, 370 A.2d 1102 (1977), aff'd, 437 U.S. 117 (1978), Maryland Court of Appeals and U.S. Supreme Court

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1992/Volume77_1992.pdf (this opinion appears at printed page 110 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Health - Medicaid - Statutory Construction -
Constitutional Law - Proposed Pharmaceutical Rebate
Regulations Are Lawful

                        August 13, 1992

The Honorable Paula C. Hollinger
The Honorable Kenneth H. Masters
Committee on Administrative, Executive,
and Legislative Review

   You have requested our opinion regarding the statutory authority

for, and constitutionality of, proposed emergency regulations of the
Department of Health and Mental Hygiene ("Department") that generally
restrict the coverage of drugs under two State-funded health care
programs to drugs manufactured by pharmaceutical companies that
provide certain rebates to the State.

   You asked that, during our review of the statutory authority of the

Department, we consider in particular whether the Department's authority
is affected by the failure of bills proposed in the 1991 and 1992 Sessions
that would have provided the Department with specific statutory authority
to require rebates in the two programs at issue. Further, regarding the
constitutionality of the regulations, you asked whether the "pharmacy
rebate program [is] an unconstitutional usurpation of the power to tax,
which is reserved to the General Assembly under Article 14 of the
Maryland Declaration of Rights, and therefore [violates] ... the doctrine of
separation of powers contained in Article 8 of the Maryland Declaration
of Rights."

  For the reasons stated below, we conclude as follows:

  1. The Department of Health and Mental Hygiene has statutory

authority to adopt the proposed regulations on pharmaceutical rebates.

 2. The proposed regulations do not violate Article 14 of the

Maryland Declaration of Rights and are not otherwise unconstitutional.

                                      I

                               Background

   The Maryland Medical Assistance Program comprises two parts.

One part, referred to as the federal/State program or "Medicaid," is funded
by both the federal and State governments and is subject to federal and
State statutes and regulations. The other part of the Maryland program is
referred to as Medical Assistance State-Only ("MASO"). The State
provides all funding for MASO and is its sole architect. See generally 75
Opinions of the Attorney General 241, 242 (1990). A third program, the
Pharmacy Assistance Program, is also funded entirely by the State and
subject only to State law. During fiscal year 1991, MASO and the
Pharmacy Assistance Program spent $19.5 million on prescription drugs.

   Currently, federal law conditions coverage of most prescription

drugs in the Medicaid Program on drug manufacturers' providing rebates
to the states. Section 1927(a) of the federal Social Security Act, with
limited exceptions, makes Medicaid coverage of drugs conditional on the
manufacturers' entering into rebate agreements with the federal
Department of Health and Human Services on behalf of the states. 42
U.S.C. §1396s(a). Under the agreement, manufacturers must provide
quarterly rebate payments to the States, calculated in accordance with
Section 1927(c) of the Social Security Act, 42 U.S.C. §1396s(c).1 Under
Section 1927(a)(3), rebate agreements are excused only when, among
other conditions, "the State has made a determination that the availability
of the drug is essential to the health of beneficiaries under the State plan
for medical assistance."

  The Department's proposed emergency regulations are modeled on

the federal rebate program for Medicaid.2 The Department's regulations
would authorize the Secretary to limit coverage of drugs in the Medical
Assistance State-Only and Pharmacy Assistance Programs to (i) drugs
produced by manufacturers that provide the same "basic rebate" provided
under Section 1927(c)(1) to the MASO and Pharmacy Assistance
Programs;3 and (ii) other drugs the availability of which has been
determined by the Secretary to be essential to the MASO and Pharmacy
Assistance Program recipients.

                                   II

                        Statutory Authority

  "[A]gency rules and regulations must be reasonable and consistent

with the letter and spirit of the law under which the agency works."
Department of Transportation v. Armacost, 311 Md. 64, 74, 532 A.2d
1056 (1987). In this instance, "the law under which the agency works"
gives the Department not only general rulemaking authority but also a
broadly worded warrant to save tax dollars through its indirect purchase
of drugs under the two programs.

  In proposing the MASO and Pharmacy Assistance regulations for

emergency status, the Department relies on statutory authority at, among
other provisions, §§2-104(b) and 15-103.1 of the Health-General Article
("HG" Article).4 HG §2-104(b)(1) provides the Secretary with authority
"to adopt rules and regulations to carry out the provisions of law that are
within the jurisdiction of the Secretary." HG §15-103.1, enacted in 1989
as part of a set of amendments generally relating to the Medical Assistance
Program, states simply: "The Program shall use its leverage as a high
volume purchaser to promote the cost effectiveness of Maryland's Health
Care System."

   In determining whether this authority extends to the Department's

proposed pharmaceutical rebate programs, we seek "to ascertain and
effectuate the legislative intention .... The language of the statute itself is
the primary source of this intent; and the words used are to be given 'their
ordinary and popularly understood meaning, absent a manifest contrary
legislative intention.'" Privette v. State, 320 Md. 738, 744, 580 A.2d 188
(1990) (citations omitted).

   HG §15-103.1 supports the Department's proposed regulations. By

conditioning drug coverage on rebates to the MASO and Pharmacy
Assistance Programs, the emergency regulations at issue reflect the
Program's use of its leverage as a high-volume purchaser to reduce the
pharmaceutical costs to the two programs. According to the Department,
the regulations will achieve savings of approximately $2.5 million during
the remainder of this fiscal year. The regulations thus "promote the cost
effectiveness of" these State programs, two important components of
Maryland's health care system.5

  Moreover, the legislative history of the bill that included HG §15-

103.1 reflects concern about the high costs of drugs to the Program and
consideration of pharmaceutical rebates to control costs. For example, a
November 9, 1988 memorandum from Senator Barbara Hoffman, a
member of the Special Joint Legislative Committee on the Medical
Assistance Program involved in the development of the legislation,
recognizes that "[t]he state is probably the largest purchaser of
pharmaceuticals through our Medical Assistance Program and state
hospitals, etc., but we don't get a volume discount because our clients for
the most part go to various pharmacies as individuals." She goes on to
discuss the implications of the State's obtaining "a rebate on a quarterly
basis from the drug manufacturers based on our volume purchases . .."
Memorandum at 2. This legislative background buttresses a reading of the
provision that authorizes the Department's proposed regulations.

   We have considered whether legislative action occurring after the

enactment of HG §15-103.1 in 1989 undermines reliance on this statutory
authority. In both the 1991 and 1992 Sessions, bills were introduced in the
General Assembly that would have specifically authorized the Department
to require rebates from pharmaceutical manufacturers as a condition of
drug coverage in the MASO and Pharmacy Assistance Programs. In 1991,
Senate Bill 493 was introduced in the Senate and referred to the Senate
Finance Committee, where it never came to a vote.

   House Bill 194 of 1992, a similar bill, passed unanimously in the

House. It was then referred to the Senate Finance Committee. An
amended version, which altered the rebate methodology and added other
amendments limiting the Department's authority to impose drug
preauthorization requirements, passed the Senate. According to a July 9,
1992 memorandum from Jolie H. Matthews, Esquire, Committee Counsel
to the Members of the AELR Committee: "House Bill 194 failed in the
last few days of the 1992 Session because the House refused to concur in
a set of amendments added to the bill by the Senate and the Senate never
appointed a Conference Committee."

   In our view, the General Assembly's failure to pass these bills does

not affect the existing statutory authority for the emergency regulations on
which the Department relies. Bills fail to pass for a host of reasons, some
of which do not necessarily reflect disagreement with the substance of the
legislation. A bill to confirm agency authority might be thought
unnecessary, for example.6 In the case of House Bill 194 of 1992, the bill
appears to have died because restrictive amendments were added.

  In general, reliable conclusions as to the prior legislative intent for

enacted legislation cannot readily be drawn from the subsequent failure of
the General Assembly to enact proposed legislation.7 As the United States
Supreme Court said in United States v. Wise, 370 U.S. 405, 411 (1962):

         [S]tatutes are construed by the courts with reference to
         the circumstances existing at the time of the passage.
         The interpretation placed upon an existing statute by a
         subsequent group of Congressmen who are promoting
         legislation and who are unsuccessful has no persuasive
         significance here .... Logically, several equally tenable
         inferences could be drawn from the failure of the
         Congress to adopt an amendment in the light of the
         interpretation placed upon the existing law by some of
         its members, including the inference that the existing
         legislation already incorporated the offered change.

(Citations omitted).

   Moreover, the Department's role in promoting the proposed

legislation is largely irrelevant, as well. "The advocacy of legislation by an
administrative agency - and even the assertion of the need for it to
accomplish a desired result - is an unsure and unreliable, and not a highly
desirable, guide to statutory construction. The possibility of its use to
prove more than it means may, but should not, deter administrative
agencies from seeking helpful clarification of authority or a fresh and
specific congressional mandate." American Trucking Ass'ns, Inc. v.
Atchison, T. & S.F. Ry. Co., 387 U.S. 397, 418 (1967).

  In a case with a number of parallels to the facts at hand, the

Pharmaceutical Manufacturers Association and other plaintiffs challenged
regulations of the then-U.S. Department of Health, Education and Welfare
to limit payment for prescription drugs for Medicare and Medicaid. In
response to plaintiffs' arguments that Congress had rejected bills that
would have given specific authority to the Secretary of HEW to establish
the regulatory program, a federal district court stated:

      [U]nsuccessful attempts at legislation are not the best
      of guides to legislative intent .... Legislators may
      merely wish to make clear what form a program should
      take rather than leave its details to an administrator's
      discretion. Similarly, the fact that Congress has failed
      to adopt HEW recommendations for specific
      limitations on drug reimbursement does not establish
      that such a proposal is excluded from a general
      provision on the subject.

American Medical Ass'n v. Mathews, 429 F. Supp. 1179, 1200 (N.D. Ill.
1977) (citation omitted). We reach the same conclusion here.

                                III

                        Constitutionality

   You asked if the rebate requirement is "an unconstitutional

usurpation of the power to tax, which is reserved to the General Assembly
by Article 14 of the Maryland Declaration of Rights ..." and is thus a
violation of the separation of powers clause, Article 8 of the Declaration
of Rights. We conclude that Article 14 is not violated by the proposed
regulation.

  Article 14 of the Declaration of Rights provides "[t]hat no aid,

charge, tax, burthen or fees ought to be rated or levied, under any
pretense, without the consent of the Legislature." This clause was first
adopted as part of the Constitution of 1776 and has undergone no
substantive change in the succeeding constitutions. See Constitutional
Convention Commission, Constitutional Revision Study Documents at
606-07 (1968). The clause was adopted as proposed to the Convention of
1776. See Proceedings of the Convention of 1774, 1775, and 1776 at
296-97 and 310-12 (Lucas & Deaver ed. 1836). Thus, there is no
documented history of the meaning of this limitation.

 In our view, a State agency's monetary gain in the ordinary course

of commercial dealing is not a "tax" or "fee" within the scope of Article

14. The only reported case that deals in more than a summary fashion with
    Article 14, State Roads Commission v. Postal Telegraph Cable Co., 123
    Md. 73, 91 A. 147 (1914), supports our understanding of the scope of
    Article 14. In this case, the Court of Appeals held that even in the absence
    of legislative authorization, the State Roads Commission could charge a
    fee for the use of a bridge that the Commission had acquired from a private
    party. The private party had charged a fee for the use of the bridge and the
    Commission had the same right by contract as an assignee. This right was
    part of the consideration in the purchase of the bridge. 123 Md. at 76-7.
    In so ruling, the Court rejected the holding of the trial court that charging
    the fee violated Article 14. 123 Md. at 74 and 77.

    While the scope of Article 14 remains unclear, the implication of the
    Postal Telegraph case is that Article 14 does not apply to a State agency
    that generates money in a commercial transaction concerning particular
    goods or services. The same distinction is commonly made in the
    definition of a tax. As the United States Supreme Court wrote many years
    ago:

        Taxation is neither a penalty imposed on the taxpayer
        nor a liability which he assumes by contract. It is but
        a way of apportioning the cost of government among
        those who in some measure are privileged to enjoy its
        benefits and must bear its burdens.
    

Welch v. Henry, 305 U.S. 134, 146 (1938). See also, e.g., Meriwether v.
Garrett, 102 U.S. 472, 513 (1880).8

 In our opinion, the rebate called for under the Department's

proposed regulations is not a tax or other levy within the meaning of
Article 14. Rather, it is money that is generated as part of the
consideration in the acquisition of particular goods. Essentially, the State
is promising to continue to purchase drugs made by companies that refund
part of the purchase price ultimately paid to them as manufacturers.
Although it is true that the State and the pharmaceutical manufacturers do
not contract directly with each other, nevertheless they have a commercial
relationship through the distribution network for prescription drugs, and
the rebate will simply be a cost of the manufacturers' doing business with
participants in the two programs. The logic of the distinction drawn by the
Supreme Court fully applies in this context: The rebate is not a tax.9

   The proposed rebate requirement, in short, is not encompassed by,

and therefore does not require express legislative approval under, Article
14 of the Declaration of Rights. Hence, the Department's proposed
regulation does not usurp the General Assembly's prerogative to levy
taxes, in violation of the separation of powers clause.

   Moreover, as explained in Part II above, the General Assembly has

delegated ample authority to the Secretary to establish the rebate program.
Although the separation of powers clause generally requires that there be
legislatively prescribed standards for the exercise of this kind of authority,
"it has been recognized that the complexity of modern economic conditions
may make it impossible to tailor specific guidelines for every conceivable
situation and that latitude in granting discretion is necessary." Governor
v. Exxon Corp., 279 Md. 410, 440, 370 A.2d 1102 (1977), aff'd, 437 U.S.
117 (1978). The complexities of the health care market make greater
legislative specificity virtually impossible in this instance.

                                      IV

                                Conclusion

   In summary, it is our opinion that:

  1. The Department of Health and Mental Hygiene has statutory

authority to adopt the proposed regulations on pharmaceutical rebates.

 2. The proposed regulations do not violate Article 14 of the

Maryland Declaration of Rights and are not otherwise unconstitutional.

                                  J. Joseph Curran, Jr.
                                  Attorney General

                                  D. Michal Freedman
                                  Assistant Attorney General

                                  Richard E. Israel
                                  Assistant Attorney General

Jack Schwartz
Chief Counsel
Opinions and Advice

1
Section 1927(c)(1) provides for a "basic rebate" amount, which is
generally proportional to the greater of either a particular percentage of the average
manufacturer price or the difference between the average manufacturer price and
best price for the drug. Section 1927(c)(2) goes on to provide an "additional
rebate" amount.

2
The emergency regulations for MASO at COMAR 10.09.03.05-1 state
as follows:
A drug in this program is not covered for State-Only
recipients if:
(A) the manufacturer has not provided the same rebate to
the State for State-Only and Pharmacy Assistance recipients'
purchases of drugs as is required under Section 1927(c)(1) of the
federal Social Security Act (42 U.S.C. §1396s(c)(1));
(B) the Program has provided notice to the manufacturer
of its failure to provide adequate rebates and its opportunity to
request a waiver from the rebate requirement under (C) of this
Regulation; and
(C) the manufacturer has failed to demonstrate to the
Secretary that the drug's availability is essential to State-Only
recipients.
The wording of the proposed emergency regulations for the Pharmacy
Assistance Program at COMAR 10.45.02.05-1 is quite similar.

3
The Department's rebate programs would not impose the "additional
rebate" imposed under the federal Social Security Act at Section 1927(c)(2). See
note 1 above.

4
The Department also cites HG §15-103, which mandates the Secretary
to administer the Maryland Medical Assistance Program; §15-105, which addresses
reimbursement procedures; and §15-124, which mandates the Department to
maintain a Pharmacy Assistance Program.

5
Because the term "Program" is defined by HG §15-101(c) to mean the
Maryland Medical Assistance Program, HG §15-103.1, read literally, only
mandates that the Medical Assistance Program alone is to use its leverage to
promote the cost-effectiveness of it and other health care programs. This narrow
reading of §15-103.1 would lead to the conclusion that a cognate program like
Pharmacy Assistance may not use its leverage to promote health care cost-
effectiveness. In light of recent Court of Appeals' decisions, however, a reading of
§15-103.1 that would exclude Pharmacy Assistance should be rejected. In
Kaczorowski v. City of Baltimore, 309 Md. 505, 514, 525 A.2d 628 (1987), the
Court of Appeals stated:
[T]he plain-meaning rule does not force us to read
legislative provisions in rote fashion and in isolation. What we
are engaged in is the divination of legislative purpose or goal.
Indeed, as we have explained, the plain-meaning rule "is not a
complete, all-sufficient rule for ascertaining a legislative intention
..." The "meaning of the plainest language" is controlled by the
context in which it appears. (Citations omitted.)
Because the General Assembly intended HG §15-103.1 to encourage the
cost-effectiveness of State-funded health care programs, the provision should not
be read to exclude cost-effectiveness efforts such as those embodied in the
emergency regulations for the Pharmacy Assistance Program at issue here. We are
"adopt[ing] that construction which avoids an illogical or unreasonable result, or
one which is inconsistent with common sense." Tucker v. Fireman's Fund Ins. Co.,
308 Md. 69, 75, 517 A.2d 730 (1986).

6
Your request presents the issue of the effect of legislative failure to enact
specific authority on a claim of existing general authority. In the "reverse"
situation, where the General Assembly failed to enact a bill that would have
repealed authority claimed to exist, the Maryland Court of Appeals found that such
failure could be used to "buttress" a finding of existing statutory authority. See
Demory Brothers v. Board of Public Works, 20 Md. App. 467, 473, 316 A.2d 529
(1974), aff'd, 273 Md. 320, 329 A.2d 674 (1974).

7
To be sure, where there are serious doubts about statutory authority for
an action, coupled with an agency's longstanding failure to act upon such authority,
legislative rejection of amendments designed to provide specific authority may
"strengthen" the conclusion that statutory authority is lacking. See Bosley v.
Dorsey, 191 Md. 229, 60 A.2d 691 (1948). Here, by contrast, the Department
relied upon legislation that was enacted relatively recently and that confers authority
embracing the Department's proposed rebate programs.

8
A treatise summarizes the point this way:
The essential characteristics of a tax are that it is not a
voluntary payment or donation, but an enforced contribution,
exacted pursuant to legislative authority in the exercise of the
taxing power, the contribution being of a proportionate character,
payable in money, and imposed, levied, and collected for the
purpose of raising revenue to be used for public or governmental
purposes and not as payment for some special privilege granted
or service rendered.
19 M.L.E. Revenue and Taxation §1, at 66 (1961) (emphasis added).
Analogously, in a recent opinion we distinguished the kind of "fees"
encompassed by Article 14 - those "that a citizen must pay to receive a service that
only a public officer can provide ..." - from those incident to commercial
transactions. 76 Opinions of the Attorney General 95, 98 (1991).

9
An alternative reason for rejecting the characterization of the rebate as
a tax derives from the purpose of the rebate. "[T]he essential characteristics of a
tax are that it is ... imposed, levied, and collected for the purpose of raising revenue
..." 84 C.J.S. Taxation §1b, at 32-33 (1954). The purpose of the rebate programs
is not to raise State revenue but rather to reduce program costs incurred in covering
drugs for MASO and Pharmacy Assistance recipients.