High court wary of Vt. limits on Rx data mining

Wednesday, April 27, 2011

The Supreme Court seems poised to give at least some form of First Amendment protection to the modern-day enterprise of data mining – gathering and selling commercial data for the benefit of corporate and other clients.

The justices heard arguments yesterday in Sorrell v. IMS Health, a challenge to a Vermont law that limits one category of valuable data: the drug-prescribing practices of physicians. The law bars the sale of this prescribing data to data miners and pharmaceutical companies unless doctors give their consent – even though the information is gathered and made available for other purposes, including law enforcement. By requiring consent from doctors for the sale of their information for marketing purposes, the law undermines the value of the prescribing data to drug companies. The companies use the information – and pay premium prices for it – to target their sales pitches to doctors based on which medications they already prescribe.

Lawyers for Vermont and the Obama administration portrayed the law as a valid commercial regulation that protects privacy but does not violate free speech. “Drug companies would certainly like to have this information for marketing, but they have no First Amendment right to demand it,” said Vermont Assistant Attorney General Bridget Asay, “just as they have no right to demand access to the doctor’s tax returns, his patient files, or to their competitors’ business records.”

Deputy U.S. Solicitor General Edwin Kneedler said the law was “narrowly drawn” and “of a piece” with other uncontested confidentiality and privacy laws that shield medical records and drivers’ license information.

But almost from the outset, it appeared that most justices were not buying those arguments, viewing the law instead as an unconstitutional effort by Vermont to manipulate the marketplace of ideas for its own purposes, including reducing medical costs for consumers and encouraging the use of generic drugs.

At times Vermont officials have said as much, asserting that the drug companies use the data to push doctors away from generics and toward prescribing newer brand-name drugs that are more expensive.

“You want to lower your health care costs, not by direct regulation, but by restricting the flow of information to the doctors,” Chief Justice John Roberts said, challenging Asay. “By, to use a pejorative word … 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.” Asay said doctors can still receive drug company information even without providing the prescribing data, but the justices seemed unconvinced.

Justice Anthony Kennedy piled on, telling Asay, “You were the one that made the argument that the state has an interest in reducing health care costs. I assume that is by selling generics… . In effect, aren’t you doing this by regulating speech?” When Asay said the law was only meant to restrict access by drug companies to certain data used in marketing, Justice Antonin Scalia said sarcastically, “It only restricts the information necessary for really effective speech.”

At several points, it seemed that the justices were importing the rationale of recent rulings on campaign-finance regulation to the context of data mining and commercial speech. The Court’s conservative majority has become increasingly suspicious of government regulation of campaigns that seem aimed at “leveling the playing field” between adversaries by encouraging or restricting speech by one side or the other.

Thomas Goldstein, the lawyer for IMS Health, the Connecticut data-mining company challenging the Vermont law, picked up on that theme repeatedly in his argument yesterday. He argued that by undermining the data industry, Vermont was in effect muzzling one side in a debate over health care costs and policy. “They didn’t like the marketplace of ideas,” Goldstein said of Vermont.

At another point, Goldstein mocked the Vermont statute. “This statute … says Katie bar the door, do whatever you want to do with this stuff, just don’t do something we disagree with when it comes to the message.” Later he added, “The nature of a marketplace of ideas is you get to say your piece and the other side gets to say their piece.”

Though some justices seemed interested in finding a way that states could regulate in this area to protect physician privacy, none seemed to champion Vermont’s law. Instead, they seemed more sympathetic to Goldstein, whose final words to the Court were, “You can’t draw lines that are intended to discriminate against speakers. That’s the main principle of our case.”

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