Skip to main content

High court hears case over 'data mining' of drug prescription data

By Bill Mears, CNN Supreme Court Producer
STORY HIGHLIGHTS
  • Drug makers use the prescription-pattern data to tailor their sales pitches
  • Maine, New Hampshire, and Vermont have banned the use of the data for marketing
  • The high court justices questioned the motive behind the law

Washington (CNN) -- The Supreme Court offered a heavy dose of skepticism Tuesday over the power of states to bar "data mining" companies from marketing information about doctors' drug prescriptions.

The justices heard 70 minutes of lively arguments in a potentially far-reaching case testing the conflicting boundaries over commercial speech and consumer protection.

Pharmacies are required under law to preserve a doctor's prescription records, and although federal law protects a patient's privacy, a physician does not receive similar protections.

All states allow pharmacies to collect and pass on data about the prescription-writing habits of physicians. But three states -- Maine, New Hampshire, and Vermont -- enacted laws in recent years creating a specific exception to that distribution: banning any use or publication of the information for "marketing purposes" of brand-name medicine. Drug companies use these prescription patterns to tailor their sales pitches to doctors.

A federal appeals court in November struck down Vermont's "Pharmaceutical Confidentiality Law," concluding it contained "a commercial speech restriction that does not directly advance the substantial state interests asserted by Vermont." But other federal courts have upheld similar laws in the two other states.

Those New England lawmakers have said their rules would help shrink health care costs by making it harder for drug companies to persuade doctors to use newer, presumably more expensive, patented medicines over cheaper, generic alternatives.

A majority of the justices Tuesday strongly questioned the motives and effects behind the Vermont law.

Chief Justice John Roberts suggested states were punishing the pharmaceutical industry.

"You want to lower your health care costs, not by direct regulation, but by restricting the flow of information to the doctors, by censoring what they can hear to make sure they don't have full information, so they will do what you want them to do when it comes to prescribing drugs."

Justice Ruth Bader Ginsburg, who expressed some sympathy for the state's views, was nonetheless troubled by some larger speech concerns. "This court has said that you can't lower the decibel level of one speaker so that another speaker... can be heard better."

The laws would require a physician's consent before "prescriber identifiable" data could be used by companies to gather and package the information for use as a marketing tool by drug makers.

Vermont legislators used language in their bill to say they were trying to correct a supposed "imbalance" in the "marketplace of ideas." That was a key focus of the high court's attention at the public session.

Several "health care informatics" companies had sued, including lead plaintiff IMS Health, based in Norwalk, Connecticut. These companies -- essentially the for-profit conduit between pharmacies and drug makers -- argued such laws harm patients and violate their First Amendment rights to free speech.

Federal and state privacy regulations already require that any patient-identifying information be removed from prescription histories before being sold or transferred, including names and addresses. The American Medical Association also allows doctors to voluntarily opt out of having prescription data used by so-called "detailers." Those are pharmaceutical sales representatives who market prescription drugs directly to doctors.

"Drug companies would certainly like to have this (prescriber) information for marketing, but they have no First Amendment right to demand it, just as they have no right to demand access to the doctor's tax returns, his patient files, or to their competitors' business records," said Bridget Asay, of Vermont's attorney general's office, during oral arguments.

She said the case was less about free speech, and more about the level of control doctors should have over their relationship with patients. But several on the bench questioned what they believed was the real reason behind the law.

Justice Antonin Scalia said the law only benefits doctors who do not want to be bothered by drug makers hawking their wares. "How does it increase the prescribing physician's right of privacy that the data about his prescribing can only be given away but can't be sold? Does that make him feel happier about his privacy?" he asked, suggesting doctors could easily turn away eager salesmen at the door, without benefit of this law.

Justice Anthony Kennedy was troubled about a potential double-standard when told the prescription-writing information could be sold to academic researchers and universities, who could then turn around and "sell that to the general public, to the newspapers and so forth."

Asay agreed in theory that was true, but she added that has not happened in Vermont. She said the law would only prevent "further dissemination of the data except for health care research."

The Obama administration is supporting Vermont's law.

Arguing for the data-mining companies, attorney Thomas Goldstein told the court the fact the states being sued allow the data to be used for any purpose but "marketing" shows those lawmakers are not trying to protect patient privacy or to preserve a doctor's prescription-writing discretion.

Since all the drugs in question have already received federal approval, "This is about truthful and accurate speech, and the state only wants one side of the debate to get out," said Goldstein.

Justice Sonia Sotomayor spoke up. "If there is, as I see, some interest that the state legitimately has in protecting that part of the public who says, 'I entered into this transaction, I didn't really want you to sell my name, I didn't want you to do other things with it, all I did was this transaction...' why can't the state say, 'Your desire to enter a transaction in which you're doing just that transaction and not others is something we can protect?"

Firms like IMS Health say their for-profit services benefit patients and doctors by making it possible to track disease and monitor drug safety and effectiveness. Government health regulators and academic health researchers, as well as the private health industry, all have access to the information gathered by the data-mining companies.

Vermont argues this case is all about money, claiming "Big Pharma" spends more than $8 billion a year on marketing efforts aimed at doctors, which does not include direct consumer advertising.

The high court's eventual ruling, which would be issued by early summer, could have broader implications. More than 100 similar data-mining restriction bills have been introduced nationwide, but only three have been enacted and none since 2007, when the legal challenges began.

Marketing of information on consumers' credit card purchases, Internet use, financial investments and savings, and insurance coverage may all be affected by what the high court decides for the first time on the issue of data-mining for commercial purposes. Even potentially non-marketing uses, such as news reporting, scholarly research, and general publishing could be subject to some form of government regulation.

The case is Sorrell v. IMS Health, Inc. (10-779).

Lawyers.com Lexis Nexis Logo

Law firm search