Biotech Strategy Blog

Commentary on Science, Innovation & New Products with a focus on Oncology, Hematology & Cancer Immunotherapy

Posts tagged ‘Commercial Speech’

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.

I previously wrote a post earlier this year that the United States Supreme Court (SCOTUS) had granted a writ of certiorari to hear the case of Sorrell v. IMS Health Inc., in which Vermont sought to restrict the ability of companies to data mine pharmacy prescribing data.  Oral argument is scheduled for tomorrow.

A brief background as an introduction; in 2007, Vermont passed a law that restricted the use of prescriber-identifiable (PI) data for marketing or promoting a prescription drug. Vt. Stat. Ann. tit. 18, § 4631 (2007).

This law had a major business impact on companies such as IMS who analyze prescriber data and sell it to pharmaceutical companies to assist them with their sales and marketing strategy, so that they can identify which doctors are prescribing their products or those of a competitor.  This helps them focus their sales detailing.

Similar laws in Maine and New Hampshire were upheld on appeal, but the United States Court of Appeals for the Second Circuit overturned the Vermont statute, resulting in a conflict between the circuit courts of appeal that the Supreme Court has decided to resolve.

I think the Supreme Court will decide this case narrowly and to the disappointment of many will not create expensive new rights protecting online data.

Post Wikileaks – rights to data are a controversial topic.   Journalists would like access to as much information as possible, yet government wishes to be able to regulate this.  This case is, however, not about the right to access information, but about the ability to use information that is already available.

I don’t think this case will be the one where the U.S. Supreme Court offers their opinion on the right to data privacy in an online era.

In my view, this case focuses on commercial speech and the First Amendment.  As Ronald Dworkin states in Freedom’s Law, “The United States stands alone, even among democracies, in the extraordinary degree to which its Constitution protects the freedom of speech.”

The First Amendment of the United States Constitution states that “Congress shall make no law . . . abridging the freedom of speech.”  The First Amendment, according to Justice Holmes, protects the right to express “speech that we loathe.”  The fact that Vermont does not like the data mining of prescriber information does not mean they have the right to regulate this. Vermont argues that what they are trying to do is regulate conduct not speech.

A key question for the Supreme Court is whether Vermont’s PI data is commercial free speech that is protected by the First Amendment?  The answer to me is “yes” and I think the Justices will focus on this question.

The second question that I think the Justices will focus in on at oral argument is, if you accept that prescriber data is commercial free speech, does Vermont’s Statute violate the intermediate scrutiny test for what is a permissible regulation as set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557, 561-66 (1980).

The challenge for Vermont will be the second prong of the Central Hudson test that the government has a substantial interest to be achieved by the regulation.  The tangential leap from regulating PI information to drug price regulation is a hurdle that Vermont will have to overcome to prevail.

My prediction (for what it’s worth) is that the Court will follow the analysis of the U.S. Court of Appeals for the Second Circuit, and uphold their opinion that the Vermont statute is an improper restriction on commercial speech under the First Amendment.

Whatever the Supreme Court’s decision in IMS Health Inc. v. Sorrell, it will shed further insight into what constitutes commercial speech protected by the First Amendment.  Interestingly, the Constitution makes no reference to the word “commercial” or implies that any free speech is less valued than others.  I look forward to oral argument tomorrow.

Free Email Updates
Subscribe to new post alerts, offers, and additional content!
We respect your privacy and do not sell emails. Unsubscribe at any time.
error: Content is protected !!