U.S. Supreme Court Strikes Down Vermont's Prescription Drug Data Mining Ban Law

Last Friday, the United States Supreme Court struck down the Vermont Prescription Confidentiality Law allowing prescriber-identifying information to be sold and disclosed by pharmacies and pharmaceutical manufacturers for marketing purposes.  You can retrieve a copy of the U.S. Supreme Court's full opinion here.  A fantastic history of the case as well as various Amicus Briefs filed for and against Sorrell vs. IMS are posted on Vermont Office of Attorney General's website.  The case was argued on April 26, 2011, and you can listen to the oral arguments in front of the Justices here.  Many have been anxiously awaiting the Court's decision, which promised to have a profound affect either way on how deidentified information is collected and used for various purposes, including healthcare research and quality improvement, as well as for marketing.

Justice Kennedy, writing for the 6-3 majority, held that the Vermont law was an unconstitutional content-based restriction on First-Amendment protected expression. The majority asserted that speech restraint of this kind must be subject to strict judicial scrutiny. Kennedy concludes that the Vermont law fails this test because, in seeking to advance its goal of lowering health care costs and promoting public health, it restrict “certain expression by certain speakers.”

Justice Breyer, in his dissent, argued that the Vermont law only modestly affects expression, by depriving “pharmaceutical and data-mining companies of data… that could help pharmaceutical companies create better sales messages.”

The dissenting justices contend that these messages are commercial speech, and that government regulation of commercial speech has not been subjected to the heightened judicial scrutiny employed by the majority. In this light, Justice Breyer concludes that the statute permissibly regulates commercial activity. The Court’s dissent also raised concerns over long-term precedential trouble created by the majority’s decision. Justice Breyer states that, “at best the court opens a Pandora’s Box of First Amendment challenges to many ordinary regulatory practices that may only incidentally affect a commercial message… [and] at worst, it reawakens Lochner’s pre-New Deal threat of substituting judicial for democratic decision-making where ordinary economic regulation is at issue.”

For some, the Court's decision is a huge disappointment, but others will undoubtedly welcome the Court's decision as the correct outcome.  In my previous post about this case, I included the in depth analysis of Sorrell vs. IMS prepared by the Centers for Democracy and Technology (CDT).  There, CDT pointed out, among other things, that:

The first thing to recognize about the data at issue is that it contains doctors╩╝ names but it does not contain patient names. The data is [']patient de-identified['] pursuant to standards established under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA already prohibits the use of patient-identified data for marketing to patients or to doctors. Vermont went one step further and said that even patient de-identified data cannot be used to market drugs to doctors.

CDT also pointed out it its analysis:

[i]f the Supreme Court were to accept some of the privacy claims, it could do damage to privacy by discouraging use of de-identified data. And claims that doctors have a privacy right in their drug prescribing practices could upset a host of policy goals associated with improving the efficiency and safety of the health care system.

Finally, the CDT memo points out:

The behavior of physicians and other health care professionals is routinely scrutinized by federal and state regulators, accrediting organizations, licensing boards, and health care plans, among others. A broadly recognized privacy interest in prescriber-identifiable data could have implications for multiple important issues, including quality measurement and public reporting, as well as comparative effectiveness research, which are critical to reform of our health care system. If the Court were to agree that prescriberrecords need to be protected like corporate “tradesecrets” or that there is no role for outside review of physician decision making, important reform activities that depend on access to and use of prescriber identified data could be impaired or prohibited.

Clearly, the U.S. Supreme Court agreed.

CDT Analyzes Privacy Issues in Sorrell v. IMS Health, Inc.

In my previous post (Nov 2010) regarding the Sorrell case, I pointed out that the U.S. Supreme Court's decision (either way) will have a profound impact on data-mining and how certain patient information can be used. 

The Center for Democracy and Technology (CDT) has recently taken a closer look at the privacy issues presented in the Sorrell case, and has prepared an excellent memo that "unpacks" and carefully analyzes the legal issues and potential impact the Court's decision could have on current health care policy, and patient privacy in general.  CDT has asked Legal HIE to help get the "word out" regarding the issues presented by Sorrell and covered in the CDT memo, and Legal HIE in turn asks our readers to visit CDT's websiteand review the critical points raised in CDT's Sorrell Memo.  

CDT's blog post on the case and link to the legal memo are also reprinted below: 

A Nuanced Understanding of Privacy

by Brock N. Meeks

March 24, 2011

A case pending before the U.S. Supreme Courthas serious implications for how privacy protections are interpreted.  But understanding the various risks posed in this case requires some careful unpacking of the ways in which "privacy" is—and is not—at issue here.  CDT's Health Privacy Project team has taken a look those risks and published an in-depth memo about its findings.

In this memo CDT focuses on two aspects of the case: First, an explanation of why it is important to recognize the valid distinctions between personally identifiable data and "de-identified" data.  The paper explains that privacy could actually be harmed if the Court were to accept the claims, made in some briefs in the case, that there is no difference between identified and de-identified data.  

The second aspect of the case the paper examines is the claim that doctors have a "privacy" right in their drug prescribing practices.  CDT disagrees and explains here that, while the patient-doctor relationship is based on confidentiality and the trust it generates, it is not useful – and would undermine other health care goals – to speak of doctors as having a "privacy" right in their drug prescribing practices.

The paper concludes by saying:  

So in many ways, Sorrell v. IMS Health is not about privacy in the way that defenders of the Vermont law claim.  Yet a broad ruling by the court on de-identified data could have a negative impact on patient privacy.  And a broad statement by the Court on doctor 'privacy' could derail other very timely initiatives. This is not the case, nor is the Supreme Court the institution, to make policy on either set of issues; the parties have offered other viable rationale for the Court to use to decide this case. There needs to be a policy conversation about the viability of the current de-identification standard, but this case needs to preserve the concept that there is a meaningful distinction between identified and de-identified data. It is up to other processes to ensure a continually robust de-identification standard and strict accountability for re-identification.

A full copy of the CDT Sorrell Memo can also be reviewed under "Continue Reading" below. 

Continue Reading

U.S. Supreme Court to Consider Whether Prescription Data Mining is Protected under First Amendment

In November 2010, legalhie.com mentioned that the Court of Appeals for the Second Circuit had issued its ruling that Vermont’s drug-marketing restrictions were unconstitutional. Vermont’s law had banned the use, sale or transmission of prescriber-identifiable data without first obtaining the prescriber’s consent. Several data mining companies had brought the suit, alleging that the statute impermissibly infringed upon their freedom of speech under the First Amendment. The Second Circuit overturned the statute, holding that it was unconstitutional for Vermont to restrict speech by data miners and pharmaceutical companies without demonstrating a compelling state interest to do so. Last month, the Supreme Court agreed to consider Vermont’s appeal. The appeal will present the Court with the question on whether nonpublic data can be protected by the government, or instead whether such data should be freely available to buyers and sellers.

Vermont is not the only state that has adopted laws restricting the release of physicians’ prescription information. Maine and New Hampshire both have similar laws, and both have been challenged in federal court by market researchers and drug manufacturers. Unlike in Vermont, the Court of Appeals for the First Circuit upheld the statutes in New Hampshire and Maine, ruling that the laws restricted market research companies’ conduct- specifically the aggregation of data for drug marketing purposes- rather than their speech.  These conflicting rulings reveal a split between the courts over whether regulating the sale of prescription data restrains freedom of speech.  Thus, the upcoming Supreme Court’s decision could broaden the reach of the First Amendment and will largely dictate how our prescription information is bought and sold.

If the Supreme Court follows in the opinion of the Second Circuit, this may have profound implications for prescription privacy. Without restrictions on data mining, database firms and pharmaceutical intelligence companies such as IMS Health, Inc. may increasingly collect, transmit, and sell prescription data for sales purposes. Currently, IMS Health, Inc., a leading pharmaceutical consulting firm, is able to collect pharmaceutical sales and prescription data from  90% of pharmaceutical sales in the U.S. This data is then sold to pharma companies that use the data to target patients and persuade physicians to sell more of their products. This data mining is a multibillion-dollar business, and drug makers say that it is an essential research tool to help educate doctors about prescription drugs in a targeted and expedited manner. However, doctors and consumer advocates have argued that private prescription information should not be used for pharma sales purposes. Specifically, many are worried that aggressive pharma marketing could lead physicians to prescribe drugs too frequently, or to prescribe newer and more expensive drugs that are not necessarily in the patient’s best interests. A recent article by the LA Times voices additional public health and privacy concerns, noting that while prescriptions seem to be de-identified, it is relatively easy to reveal patient identities by comparing prescription data with other records.

When the Supreme Court makes its decision, it should consider all the implications of the practice of data mining, including possible exposure of sensitive physician-patient information. Although drug companies have the right to market their products, the Court must ask if they should also be guaranteed the right to access arguably privileged prescription information for their own marketing purposes, and how this will affect the protection of patient records in the future.

Drug Database Firms Have Much to be Thankful for this Past Thanksgiving as Second Circuit says "Good-Bye" to Vermont's Drug Marketing Restrictions

On November 23, 2010, the Court of Appeals for the Second Circuit issued its ruling that Vermont’s drug-marketing restrictions were unconstitutional. The law banned the use, sale or transmission of prescriber-identifiable data for prescription drug marketing or promotional purposes without first obtaining the prescriber’s consent. Several data mining companies had brought the suit alleging that the statute impermissibly infringed upon their freedom of speech.  

As the Court of Appeals noted, data mining companies typically collect aggregate data to determine prescribing patterns and sell the information to pharmaceutical companies which, allegedly without this information, would be prevented from more effective marketing efforts, directing important information to prescribers, tracking disease prevention, and conducting clinical trial programs and post-marketing surveillance programs.  Researchers and insurance companies also use the data generated by data-mining companies, as do state law enforcement and other state agencies, and federal agencies such as the FDA, CDC and DEA.

Noting that the First Amendment protects “even dry information, devoid of advocacy, political relevance, or artistic expression,” the Court of Appeals found the Vermont statute was clearly aimed towards influencing “the supply of information,” central to First Amendment concerns, and that it restricted the data mining companies’ commercial speech.  The Court held that the statute failed to satisfy the intermediate scrutiny test because it did not assert a substantial state interest that was “directly advanced” by the statute nor was it “narrowly tailored” to achieve that interest. 

In doing so, the Court of Appeals rejected the substantial state interests alleged by Vermont - that the restrictions protected the public health and the privacy of prescribers and prescribing information (medical privacy) and the state’s interest in containing health care costs in the private and public sectors.  The Court noted that data-mining and the use of the data generated from such activities was still permitted in other contexts and found the state’s concerns for medical privacy too “speculative” under the circumstances to qualify as a substantial state interest.  Although the Court did agree that Vermont had a substantial interest in lowering health care costs and protecting public health, it found that the statute did not advance these interests in a ”direct and material way.”  The Court also found that the statute was not narrowly tailored and that Vermont had more direct and less restrictive methods available that it failed to utilize that would better serve its asserted interests.

The Vermont decision could have paramount implications for HIEs.  Secondary uses of de-identified information are often touted as a potential solution to the elusive long-term financial sustainability issue faced by all HIEs. The fact that the Second Circuit struck down as "unconstitutional" a state law enacting restrictions on data mining will most certainly give database firms and HIE stakeholders confidence that similar uses of information in other contexts could be similarly protected under the First Amendment.

The text of the court’s full decision may be found at http://courtlistener.com/ca2/VqT/ims-health-inc-v-sorrell/