Supreme Court approves data mining by drug cos.
The U.S. Supreme Court has struck down a Vermont law that restricted data mining and drug companies from using prescription information for marketing purposes.
Pharmacies are required by state and federal law to collect the information, which typically includes doctors' names, what drugs they prescribe, and how often drugs are ordered. Pharmacists sell the data to data mining companies, who then sell it to drug makers with patient names removed or encrypted, InformationWeek said.
The 2007 Vermont law effectively banned the practice in the state. It said data mining companies can't sell the prescription information for marketing purposes, and drug makers can't use it unless the prescribing doctor consents.
Vermont lawmakers said the measure would protect the privacy of doctors and patients and help to control the cost of expensive brand-name drugs.
According to the Associated Press (AP), brand-name drug makers spend an estimated $8 billion annually marketing their products to doctors.
Those efforts include the practice of detailing, in which sales representatives target individual doctors based on the doctors' own prescribing habits, the AP reported.
The law banned detailing, but still allowed the information to be used for healthcare research and educational purposes, and by law enforcement, insurance companies, and journalists.
The lawsuit said the information about doctors' prescribing patterns is important in helping spot trends, tracking the safety of new medications, and studying treatment outcomes.
The data mining companies make such data available to researchers and the government at little or no cost.
In the case Sorrel v. IMS Health, Vermont argued: "By letting doctors, rather than the state control the use of this information for marketing, the legislature avoided impinging on the 'protected interest' in communication between pharmaceutical manufacturers and willing doctors."
IMS Health, SDI Health, and Source Healthcare Analytics said their actions are protected by the First Amendment. They stated pharmacists have a constitutional right to share prescription data and drug companies have the right to use it.
Lower courts have disagreed on whether laws like Vermont's were constitutional. According to AP reports, a federal appeals court in New York ruled against the Vermont law, but a different appeals court upheld similar laws in Maine and New Hampshire, saying they regulated only the conduct, not the speech of data miners.
The Supreme Court, however, declared the Vermont law unconstitutional on grounds that it violates the drug industry's free speech right to market its products. In a 6-3 decision, the court ruled that states can't stop drug makers and data mining companies from using information about he prescription drugs individual doctors prescribe.
The ruling imperils similar laws in Maine and New Hampshire, the AP reported.