Vermont Data Mining Law Struck Down

Supreme Court Rules Law Violates Free Speech Protections

By , June 24, 2011.
Vermont Data Mining Law Struck Down

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n a case weighing privacy vs. free speech, the U.S. Supreme Court has struck down a Vermont law that requires physicians to give their consent before information about their prescription-writing habits can be sold to help market prescription drugs.

The court, in a 6-3 decision in the case of Sorrell v. IMS Health Inc., ruled the law violated constitutional protections of free speech. It criticized the law because it permits the dissemination of prescriber-identifying information for certain healthcare research purposes without the prescriber's permission, but requires permission when the information is used for data mining for drug marketing purposes.

Pharmacies routinely sell prescription information to data mining firms that produce reports on prescriber behavior and provide them to pharmaceutical manufacturers, which then use the reports to refine their marketing tactics, the court acknowledged in its ruling.

The law "prohibits pharmaceutical manufacturers from using the information for marketing," the opinion, written by Justice Anthony Kennedy, says. "Yet the law allows prescriber-identifying information to be purchased, acquired and used for other types of speech by other speakers."

Privacy Argument Rejected

The court dismissed the state's argument that the law is needed to protect medical privacy, including physician confidentiality, avoidance of harassment and the integrity of the doctor-patient relationship. Kennedy noted that under the law, "pharmacies may share prescriber-identifying information with anyone for any reason except for marketing." He added: "Given the information's widespread availability and many permissible uses, Vermont's asserted interest in physician confidentiality cannot justify the burdens that [the law] imposes on protected expression."

Kennedy also noted: "But if pharmaceutical marketing affects treatment decisions, it can do so only because it is persuasive. Fear that speech might persuade provides no lawful basis for quieting it."

In enacting the law, Vermont legislators said it would help shrink healthcare costs by making it harder for drug companies to persuade doctors to use newer, more expensive, patented medicines rather than cheaper, generic alternatives (see: Privacy Case Raises Complex Issues).

The Obama administration backed the Vermont law. Some privacy advocates, including the Electronic Privacy Information Center, had argued in favor of it as well.

But in a recent commentary, Deven McGraw, an attorney who is director of the health privacy project at the Center for Democracy & Technology, argued that the privacy issues in the case are far from black and white.

For example, she acknowledged "The case sets up a potentially dangerous conflict between privacy and the First Amendment." But she went on to say "Claims that doctors have a privacy right in their prescribing practices could upset a host of policy goals associated with improving the efficiency and safety of the health care system."

The HIPAA Privacy Rule already prohibits the sale of patient-identifiable data for marketing. The Vermont case focused only on the use of prescriber-identifiable information for marketing purposes.

In reacting to the decision, the American Medical Association notes that it offers physicians a nationwide system for opting out of having their prescription information provided to pharmaceutical companies. Some 28,000 physicians have used the Physician Data Restriction Program since 2006.

Follow Howard Anderson on Twitter: @HealthInfoSec

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