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Supreme Court Strikes Down Prescription Data-Mining Ban

23 June 2011

The U.S. Supreme Court struck down today a Vermont law prohibiting pharmaceutical companies from buying or using prescription data for marketing. The decision, Sorrell v. IMS Health, holds that the state law prohibiting the sale or disclosure for marketing purposes of prescription data that identifies prescribers (but not patients) is an unconstitutional infringement on the free speech rights of pharmaceutical and data mining companies. The case was decided primarily on First Amendment grounds with privacy addressed only as a secondary issue. 

In a 6-3 decision written by Justice Kennedy and with Justices Breyer, Ginsburg and Kagan dissenting, the Court concluded that Vermont’s regulation of prescriber-identifiable data was a regulation of commercial speech that was content- and speaker-based such that it violated the First Amendment. 

Vermont claimed that restricting the ability of pharmaceutical companies to “detail” prescribers would lower health care costs by encouraging doctors to prescribe generic drugs and improve health care outcomes by focusing pharmaceutical marketing efforts more on objective medical issues rather than on targeting specific doctors. The Court concluded, however, that Vermont imposed a policy that singled out pharmaceutical companies and allowed any speech related to the use prescriber-identifiable data except for one – the use of prescriber data for marketing purposes. This was deemed by the Court to be an unconstitutional restriction on commercial speech. The Court roundly rejected the state’s claim that the statute was needed to “protect medical privacy, including physician confidentiality, avoidance of harassment, and the integrity of the doctor-patient relationship,” noting that the statute allows for the sharing of prescriber-identifiable data for any reason except marketing. The Court focused on whether the privacy options available “reflect a State’s impermissible purpose to burden disfavored speech” and notes that merely flipping the regulatory regime from opt-in (which was how the Vermont law operated) to opt-out (meaning physicians could opt-out of having their prescriber-identifiable data shared) would not necessarily make this type of restrictive law constitutional. The Court does suggest that physician privacy is a valid state interest that could perhaps be protected with more narrowly drawn laws that permit the sale or disclosure of information in “a few narrow and well-justified circumstances.”

In its conclusion, the Court discussed the importance of privacy and how it should be factored into government regulation:

The capacity of technology to find and publish personal information, including records required by the government, presents serious and unresolved issues with respect to personal privacy and the dignity it seeks to secure. In considering how to protect those interests, however, the State cannot engage in content-based discrimination to advance its own side of a debate. . . . Privacy is a concept too integral to the person and a right too essential to freedom to allow its manipulation to support just those ideas the government prefers.

For more information on the background and arguments made in the Sorrell case, see our previous blog post: Is Access to Prescriber-Identifiable Data Protected as Free Speech?: The Supreme Court Hears Oral Arguments in Sorrell v. IMS Health.

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