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Posts tagged ‘First Amendment’

The Supreme Court of the United States (SCOTUS) heard oral argument today in William Sorrell, Attorney General of Vermont versus IMS Health Inc., a case involving the right of Vermont to regulate the use of prescription drug data for marketing and sales purposes by pharmaceutical companies.

You can read my previous blog post with a background to the case, and also my correct prediction yesterday of what the Justices would focus on.  A transcript of the oral argument is available on the Supreme Court website.

Justice Scalia and Chief Justice Roberts started the oral argument by Vermont’s Assistant Attorney General with concerns that what Vermont was seeking to do was prevent the use of the data by pharmaceutical companies for marketing purposes when it could be used for other purposes such as clinical trials or university research.

JUSTICE SCALIA: So what the Chief Justice suggested is right, that the purpose is to stop them from using it in order to market their drugs?

Justice Scalia appeared sceptical about what privacy benefit the physician obtains from only restricting pharma company access to his prescribing information, when physician prescribing data is widely available to others e.g. through insurance claims.

In further questions, Justice Scalia pursued the topic that the consent of physicians was only required for marketing uses, when the data could be given away for research without the physician’s consent.

JUSTICE SCALIA: So the only thing it assures the physician who prescribes is that he won’t be bothered by drug companies who, on the basis of their knowledge of information which other people have, approach him in order to market their drugs? That’s basically all it assures the prescribing physician, right?

Justice Scalia certainly seemed to have the bull by the horns in his questioning of Vermont’s Assistant Attorney General, Bridget Asay. The following exchange is a good illustration:

JUSTICE SCALIA: 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?

MS. ASAY: What it allows the doctor to do is to avoid an intrusive and invasive marketing practice.

JUSTICE SCALIA: He can do that by saying: I don’t want to talk to you.

MS. ASAY: The doctor cannot shut off any communication and any information from the pharmaceutical companies by slamming the door on the detailers, but that’s not necessarily in the interest of doctors or patients.

JUSTICE SCALIA: That may well be, but then just don’t tell me that the purpose is to protect their privacy. Now you’re arguing a totally different purpose: it makes it easier for the physician to cut off approaches by drug companies that want to sell drugs. If that’s the purpose of this statute, it’s quite different from protecting his privacy.  His privacy isn’t protected by saying you can’t sell it but you can give it away.

Justice Sotomayor asked why Vermont couldn’t adopt an opt-out approach for doctors from the use of their data, rather than an opt-in.

JUSTICE SOTOMAYOR: Well, but, given the restrictions on speech, why is that a bad thing? Meaning you don’t really intend to tell us that the State couldn’t and wouldn’t — just like we got all of that advertising relating to the opt-out on telephone solicitations, virtually every American knew they could do it if they chose. Maybe some didn’t, but a vast majority did. You can’t really say Vermont’s incapable of telling doctors in a mailing or in some public professional magazine, if you want to opt out, here’s the number?

Justice Ginsburg pursued the issue of whether it was right to restrict the commercial speech of pharmaceutical manufacturers in favor of generics companies.

JUSTICE GINSBURG: There’s another there’s another purpose that I would like you to comment on, and that is the, the State is interested in promoting the sale of generic drugs and correspondingly to reduce the sale of brand name drugs. And if that’s the purpose, why doesn’t that run up against what this Court has said that you can’t, you can’t lower the decibel level of one speaker so that another speaker, in this case the generics, can be heard better?

Throughout oral argument, the Justices focused on the regulation of speech by Vermont.

CHIEF JUSTICE ROBERTS: You want to lower your health care costs, not by direct regulation, but by restricting the flow of information to the doctors, by, to use a pejorative word, but 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, because you can’t take, I gather, direct action and tell them, you must prescribe generics, right?

Reading through the transcript of the Justices questioning, I found the Assistant Attorney General of Vermont entirely unconvincing in her answers.

The message I took from this transcript, and others may differ, is that Vermont’s chance of having their Statute upheld is low.  The Justices appeared to be unpersuaded and unconvinced by Vermont’s case.

In a case of national significance to the pharmaceutical and biotechnology industry, the United States Supreme Court on January 7 decided to hear the case of Sorrell (Attorney General of Vermont) v. IMS Health Inc & Pharmaceutical Research and Manufacturers of America (PhRMA).

This case is about whether States have the right to regulate how physician prescriber data is sold and used, and whether physicians have a right to privacy in the use of their personal information. In Vermont, the legislature enacted a law that allowed prescribers on their annual licensing renewal to opt-out of allowing the use of information that would identify them in any data used for marketing or promotion of prescription drugs.

The Vermont law also states that “pharmaceutical manufacturers and pharmaceutical marketers shall not use prescriber-identifiable information for marketing or promoting a prescription drug” unless the prescriber consents. Vt Stat. Ann. 18, § 4631(d).

Without the identity of prescribers, companies such as IMS Health would not be able to provide the level of granularity about prescribing behavior that allows targeted detailing by medical representatives to take place.

Currently, individual patient names in the prescription data are redacted by encryption technology, but this process results in a unique identifier for each patient. Tracking this unique patient identifier coupled with the name of the physician allows the prescribing behavior of different doctors for a patient to be monitored. This has major significance to medical reps allowing them to identify physicians who: do or do not prescribe their products, switch patients to competitor products or use lower cost generics.

The Vermont legislature in 2009 passed the Prescription Confidentiality Law, 18 V.S.A. § 4631 that requires prescribers to give their consent to the use of personally identifiable information and allowed them the ability to opt-out at the time of license renewal.  In the absence of consent, all other prescription data was still available for use in marketing and promotion, but not the identity of the prescribing doctor. Not surprisingly this law was not well received by data mining companies such as IMS Health and pharmaceutical manufacturers.

The District Court upheld the legal challenge to the Vermont law, while the United States Court of Appeals for the Second Circuit over-turned it.  Similar laws in Maine and New Hampshire have been upheld by the United States Court of Appeals for the First Circuit, raising a circuit conflict that the Supreme Court has now decided to resolve.

The Supreme Court decision will not only impact Vermont, but all those States who are interested in regulating this area.

The question presented to the Supreme Court for answer is:

“Whether a law that restricts access to information in nonpublic prescription drug records and affords prescribers the right to consent before their identifying information in prescription drug records is sold or used in marketing runs afoul of the First Amendment.”

The case of Sorrell v IMS Health raises multiple questions that the Supreme Court will have to consider at the intersection of information technology, privacy and commerce:

  1. If pharmacists are required by law to gather prescription data that identifies individual physicians and their prescribing habits, do States have the authority to regulate the use of this information?
  2. Does pharmacy prescribing data constitute commercial speech that is protected by the First Amendment to the United States Constitution?
  3. And if it is protected, does the Vermont law meet the standard to regulate the use of this data in the marketing and promotion of prescription drugs?

These are all difficult questions of law, and I am sure that legal scholars will be busy writing amicus briefs in support of both sides of the debate.

However, I predict the decision in this case will also have a far-reaching impact on electronic privacy rights and the extent to which data mining can be regulated, not only in the pharmaceutical industry but across all industries.

Sales of pharmaceuticals are the fuel of the industry and provide the $ for investment in R&D, but could there be life without such in-depth IMS data?  Although medical sales might be less efficient and less targeted, the industry would survive and sales would still take place.  When I lived in the United Kingdom over ten years ago, IMS only provided prescribing data on the equivalent of a zip code level, but medical reps were still effective without knowing the identity of individual prescribers.  You could still work out which areas in a territory were important, and the key practices to target.

The case of Sorrell v IMS Health is one that all U.S. biotechnology and pharmaceutical companies will be watching with great interest given the tremendous impact it could have on the industry business model.  I look forward to writing an update as the case develops and oral argument is scheduled.

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