Supreme Court Sides with Pharma on Prescription Data Mining

The U.S. Supreme Court recently struck down a Vermont law restricting data mining of medical prescription information in Sorrell v. IMS Health. Although the Court ruled on this issue in June, it is an important opinion with widespread impact, and as this blog has addressed lower courts’ opinions on this issue in the past, it is notable that this question is now resolved.

The ruling, based on free speech grounds, allows pharmaceutical companies to purchase prescribing data and use that data to tailor marketing efforts to physicians. This data is commonly collected by pharmacies and sold to prescription drug intermediaries (“PDIs”), who then sell the information to prescription drug companies. The data generally contains information regarding the prescribing doctor and the medication itself and does not contain identifiable patient information.

The Vermont law directly prohibited the sale, licensing, or exchange of prescription data, and the state legislature advanced three objectives in passing the law: curtailing overprescription of drugs, controlling healthcare costs, and protecting physician privacy. The majority opinion by Justice Kennedy established that the law contained both a “content- and speaker-based restriction” on speech, which required the Court to apply “heightened judicial scrutiny” to assess its validity. Under this assessment, the Court rejected each of Vermont’s policy justifications and found the law unconstitutional because it was not narrowly tailored to these policies. 

Of note, the Court’s use of “heightened” scrutiny is somewhat ambiguous under free speech precedent. Typically, commercial speech is evaluated under an “intermediate scrutiny” test established in Central Hudson; however, “heightened” scrutiny has also been loosely used as a synonym for “strict scrutiny,” which requires a tighter correlation between the regulated speech and the government’s objectives. 

Critics of the opinion argue that state regulators will have “less latitude to make policy decisions” regarding healthcare data and that courts now have broad discretion to invalidate commercial regulations based on the effects on free speech. However, there may still be hope for existing and future data mining statutes, particularly if the restrictions specifically target important interests, such as patient privacy, and do not single out certain types of buyers and sellers of data. For example, a Maine data mining statute similar to Vermont’s is only triggered when a physician elects to opt-out of submitting prescriber data, thus making the law’s restrictions much narrower.  A number of state statutes are currently pending review in light of the Court’s opinion in Sorrell

To read the Court's opinion, click here.

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