Law Limiting Sale of Customer Prescription Data Overturned by Supreme Court – Sorrell v. IMS Health

The U.S. Supreme Court examined a Vermont law that limited the use of patient information collected by pharmacies to determine whether or not 18 V.S.A. § 4631 violated pharmacies’ First Amendment rights. The Supreme Court held that the Vermont law did place unnecessary limits on the speech of pharmaceutical companies and had failed to justify these limits within the law itself. Therefore, the Court found Vermont’s Confidentiality of Prescription Information statute to be unconstitutional as it currently stands in Sorrell v. IMS Health, No. 10-779.

The Vermont law at issue, 18 V.S.A. § 4631, sought to limit pharmacies from selling their client’s demographic information to pharmaceutical companies. Basically, whenever a patient fills a prescription at a pharmacy, information on that patient is generated. The pharmacy then sells that information to “data miners,” who compile the data into coherent reports, which are then sold to pharmaceutical manufacturers. The drug companies then use this data for “detailing”, a process through which they promote their medications to doctors in the hopes of increasing the sale and use of their drug.

The goal of §4631 was to limit the practice of detailing by eliminating the role of the data miners; under the law, pharmacies were no longer able to sell patients’ information to data miners. The law sought to limit the commercial use of patient information and its sale to pharmaceutical companies. However, it did allow this information to be used in other ways, e.g., for medical research purposes. In fact, it was this arbitrary divide of what was allowed and what was not that led to the Supreme Court’s ruling in Sorrell.

In order to review a state statute, the Supreme Court must first establish that the law warrants “heightened scrutiny” as to its legality. The potential First Amendment violations of §4631 first came to the Court’s attention after various data miners and drug manufacturers filed a lawsuit against Vermont, stating that §4631(d) violated the Free Speech Clause of the First Amendment. The relevant section states:

A health insurer, a self-insured employer, an electronic transmission intermediary, a pharmacy, or other similar entity shall not sell, license, or exchange for value regulated records containing prescriber-identifiable information, nor permit the use of regulated records containing prescriber-identifiable information for marketing or promoting a prescription drug, unless the prescriber consents as provided in subsection (c) of this section. Pharmaceutical manufacturers and pharmaceutical marketers shall not use prescriber-identifiable information for marketing or promoting a prescription drug unless the prescriber consents as provided in subsection (c) of this section.

While Vermont argued that its law did not warrant heightened scrutiny, the Supreme Court felt otherwise. The Court held that the law placed “a restriction on access to information in private hands” and “impose[d] a speaker- and content-based burden on protected expression, [which] is sufficient to justify applying heightened scrutiny.”

If a law is going to place limits on the expression of content or speech, then it needs to be done for a justifiable government interest. And while Vermont alleged in its arguments for §4631, the Court did not find that any of its reasonings were in fact justified. It found that Vermont’s reasons for limiting the content and speech of data miners and pharmaceutical companies seemed based more on a difference of opinion rather than any real government interest.

For example, Vermont claimed its law was necessary to protect doctor and patient medical privacy. However, the law still allowed the patient information collected by pharmacies to be used for medical research. Likewise, the law offered little choice for patients and doctors to opt out of its restrictions; either you followed the law and only had your information released to those parties the state approved, or you could choose to have completely unrestricted access to your information. In both instances, there is little freedom for the parties whom the law is supposedly protecting to make their own decisions regarding their personal information – all the power rests with the lawmakers themselves.

Similarly, Vermont claims its law protects the safety of the doctor-patient relationship by limiting the influence that pharmaceutical companies have on a doctor’s decision when prescribing drugs. However, again, this presumes that doctors are unable to decide what is right for their patients and will be unduly influenced by drug companies. And while this might certainly happen, it is not cause for limiting the expression of persuasive content and speech; “fear that speech might
persuade provides no lawful basis for quieting it.”

In fact, it seems that this fear and distrust lies at the heart of the reasoning behind §4631(d). After reviewing the case facts, the Court concluded that many doctors and medical providers seem to find detailing informative and useful when prescribing medications. Meanwhile, Vermont does not approve of the influence detailers have on prescription decisions. Yet this is not a justifiable reason to limit freedom of expression rights; the government interest behind limiting the detailers’ expression “turns on nothing more than a difference of opinion.” As such, the Court found that §4631(d) did not hold up under its heightened scrutiny review and as such unconstitutionally burdens the respondents speech without providing adequate justification for doing so.

Kreisman Law Offices has been handling Illinois pharmaceutical negligence lawsuits for over 35 years, serving those areas in and around Chicago, Cook County, and surrounding areas, including Alsip, Berwyn, Naperville, and Evanston.

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