June 23, 2011

CT Drug Data Provider Can Sell Rx Info, High Court Rules

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In a 6-3 ruling Thursday, the U.S. Supreme Court struck down a Vermont law that restricts the sale or use of doctors’ prescribing information for the purpose of marketing prescription drugs.

The decision represents a significant victory for Norwalk-based IMS Health, Inc., a leading drug data provider, and its co-respondents, data vendors Verispan LLC (now SDI Health LLC) and Source Healthcare Analytics, Inc., and PhRMA, a drug industry trade group. They had challenged the law on First Amendment grounds, asserting that it violated their Constitutional right to free speech.

The Vermont law takes aim at a practice known as “prescription data mining,” in which pharmacies sell electronic prescription records (with patients’ names encrypted) to medical data providers. These companies extract data such as physicians’ identifying information and prescribing habits, and sell them to pharmaceutical firms, which use them to tailor sales pitches to individual doctors. Vermont sought to curtain this practice to protect physician privacy and to reduce spiraling health care costs.

Writing for the court majority, Justice Anthony Kennedy said that the Vermont law violates the free speech rights of data providers and drug companies. “Vermont may be displeased that detailers with prescriber-identifying information are effective in promoting brand-name drugs, but the state may not burden protected expression in order to tilt public debate in a preferred direction.”

Mixed Reactions

IMS Health senior vice president and general counsel Harvey Ashman hailed the decision as essential to improving patient care.

“Transparency is vitally important to advancing healthcare,” he said in a company statement. Access to doctors’ prescribing practices, he said, “enables communication about new medicines, best practices, and safety updates.”

The ruling was a setback for consumer health advocates and physician groups that support the Vermont law, and for legislators in other states seeking to enact similar laws. Existing laws in Maine and New Hampshire are likely to be challenged in view of the court’s decision.

Vermont Attorney General William Sorrell said the court’s decision was a disappointment, but not a defeat. “Our challenge now will be to continue to work to protect medical privacy and reduce health care costs without violating the Supreme Court’s ruling,” he noted. “This is a step back, but not the end of the story.”

Sweeping Implications

Legal experts expect the results of this case – Sorrell v. IMS Health, Inc. – to influence far more than the promotion of prescription drugs.

Constitutional attorney Cheryl Hanna, a professor at Vermont Law School in South Royalton, said the court’s decision “advances the rights of corporate speech,” making it harder for state and federal governments to regulate commercial messages in the name of consumer protection.

Many existing regulations are likely to be challenged in the wake of the new ruling, she said, such as the Food and Drug Administration’s ban on advertising drugs for non-approved (“off-label) uses.

In a dissenting opinion, Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg and Elena Kagan, wrote that the court wrongly applied the highest standard of free speech, opening “a Pandora’s box of First Amendment challenges to many ordinary regulatory practices that may only incidentally affect a commercial message.”

To read the previous story on drug data mining click here.

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