Vt. can’t ‘hamstring’ drug companies with speech rules

Thursday, June 23, 2011

The Supreme Court ruled today that states can’t prohibit the sale and use of pharmacies’ prescription information to market drugs to doctors.

In a 6-3 vote in Sorrell v. IMS Health, the Court struck down on First Amendment grounds a Vermont law preventing pharmacies from selling data about doctors’ individual prescription patterns to data-mining companies that market the information to drug manufacturers. The drug companies then use that data in their sales efforts.

When a patient goes to have a prescription filled, the pharmacy keeps the record of what each doctor has prescribed. That information can then be sold to companies that collect, collate and analyze the doctors’ practices. This data can be extremely helpful to a drug-sales representative when he visits the doctor to promote his own line.

The law was intended to encourage the use of generic drugs by blunting the marketing techniques of those selling brand-name products.

In the decision written by Justice Anthony Kennedy, the Supreme Court concluded that the restrictions violated the First Amendment by targeting specific speakers and specific messages about the merits of various drugs. Under the First Amendment, government can pass regulations that inhibit speech if there is a significant societal need, the limits are narrowly drawn and they don’t discriminate against a specific point of view.

The Supreme Court concluded that the Vermont law did not meet those tests because pharmacies are allowed to sell and others are allowed to use the prescription data for other purposes. In this case, Vermont singled out drug companies for legislation that would limit their speech.

The Court acknowledged that the state of Vermont has a legitimate interest in holding down the costs of pharmaceuticals, but it can’t stack the deck to reflect its views.

“A state’s failure to persuade does not allow it to hamstring the opposition,” Justice Kennedy wrote. “The state may not burden the speech of others in order to tilt public debate in a preferred direction.”

The Supreme Court reaffirmed that data receives protection as free speech, while acknowledging that many issues involving personal privacy in databases are yet to be resolved.

“The capacity of technology to find and publish personal information, including records required by the government, present serious and unresolved issues with respect to personal privacy and the dignity it seeks to secure,” the opinion said. “In considering how to protect those interests, however, the state cannot engage in content-based discrimination to advance its own side of a debate.”

The Court’s decision may have an impact on similar laws in New Hampshire and Maine. It also sends a clear signal to all states that any attempt to limit the sale and distribution of data would need to be broader in scope, neutral in application and promote significant societal benefits.

“Privacy is a concept too integral to the person and a right too essential to freedom to allow its manipulation to support just those ideas the government prefers,” Kennedy wrote.

Justices Stephen Breyer, Ruth Bader Ginsburg and Elena Kagan dissented.

In Breyer’s view, Vermont had a right to regulate the distribution of data required to be compiled by the government.

“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,” Breyer wrote.

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