Vermont Data Mining Law Is Ruled Unconstitutional
10 CommentsBy Ed Silverman // November 23rd, 2010 // 4:29 pm
A federal appeals court has ruled that a Vermont law restricting data mining - specifically, the sale of prescription drug info that identifies prescribers and patients for commercial marketing purposes - is unconstitutional. The law was challenged by three healthcare research firms - IMS Health, SDI, Wolters Kluwer health - and the PhRMA trade group, which argued the legislation would hurt public access to healthcare info and violated commercial speech.
The decision is a setback for consumer advocates who maintained such laws can protect doctor-patient relationships and consumer privacy, promote patient safety and contain health care costs. Vermont, in fact, passed its law three years ago and then amended it in hopes of staving off court challenges (see here). Similar bills have been introduced elsewhere, but the only other states to enact legislation are New Hampshire and Maine, and both survived efforts to have them overturned (see here).
In explaining its ruling, however, the US Court of Appeals for the Second Circuit wrote that the Vermont law created an “impermissible restriction on commercial speech…Vermont has not asserted a substantial state interest in curbing the use of prescriber-identifiable data in marketing campaigns” (you can read the ruling here).
“We are very pleased with today’s decision. Patients will benefit from a more transparent, safer and more competitive healthcare system as a result of this ruling,” Harvey Ashman, IMS senior vice president and general counsel. says in a statement. “These types of laws do nothing to advance public health and in fact pose a risk to patients by arbitrarily delaying information on new medicine or warnings on existing medicines.”
But in an impassioned dissent opinion, Judge Debra Livingston wrote: “I am unwilling to presume that simply because a business is engaged in the transfer of information rather than widgets that its activities are automatically entitled to the potent shield of thd First Amendment…And I cannot join a majority opinion that offers no principled basis for determining when such conduct should and should not be considered protected First Amendment activity.”
Meredith Jacobs, a pharmaceutical policy fellow at the Washington College of Law, which filed an amicus brief on behalf of the National Legislative Association on Prescription Drug Prices in support of the Vermont law, says the ruling should not be interpreted as a death knell for further legislative actions elsewhere, because the split in court rulings adds to uncertainty, but does not close any doors.
“It’s important for states to keep working on the issue of protecting this data and it shows this area hasn’t been fully fleshed out by the courts,” she tells us. “The Second Circuit opinion includes a very strong dissent that the law isn’t speech but even if it is, it’s justified by a substantial state interest. It’s not a settled issue.
“Remember, the First Circuit ruled the New Hampshire law is a commercial transaction not speech, while the majority of the Second Circuit said (the Vermont data mining law) is speech and the state hasn’t met the burden to restrict it…This leads to a circuit split and increases the likelihood the US Supreme Court may hear it.”
“The dissent understood that Vermont is trying to protect medical privacy and keep drug costs low, not regulate the First Amendment,” Kevin Outterson, an associate law professor at Boston University, writes us. “The First Circuit decision covering Maine, New Hampshire and Massachusetts was better decided, giving states some freedom to protect consumers.”
By the way, one of the early champions of the Vermont law was Julie Brill, who was assistant attorney general at the time and, last year, became one of the FTC commissioners.
Searching2000
Sometimes I wish I had time to study the law:
“the US Court of Appeals for the Second Circuit wrote that the Vermont law created an ‘impermissible restriction on commercial speech’…”
Data mining seems more like “commercial listening” than speech - but maybe I need to read the whole decision.
yobo
The real problem with all of this is that the consuner of the drug, the patient, is not making the purchse decision or paying for the prescribed drug (in most cases). Therefore, data mining that identfies MDs that are heavy prescribers is very beneficial for drug company marketing programs, but so what?. Patients need to be more proactive in their treatment decisions… this would reduce the prescibing of expensive new drugs when cheaper older drugs are available or generic drugs are available with equivalent efficacy. How to do? The patient needs to have more at stake and discuss options w/ their doctor. The argument that these laws protect consumers is bogus, the same prescribing would continue because certain docs like to believe that they’re on the cutting edge by prescribing the newest meds (and usually the most expensive). These laws only empower the state to intrude into our lives more and more. Step back and critically evaluate anything the government does; do they do it well? No. We should not permit them to continue to tell us as individuals what to do. People need to educate themselves. Patients need skin in the game.
harpy
I’ve read your statement 3 times, yobo, and it still makes no sense. as near as I can figure you’re saying data mining laws that protect the privacy of the patient-doctor relationship allow the government to intrude upon our lives - is that correct? how does that work, exactly? how is it an intrusion for the government to protect the privacy of consumers from corporations? honestly, I would like to see many more laws protecting my privacy from corporations.
and how can you say it’s completely beside the point that “data mining that identfies MDs that are heavy prescribers is very beneficial for drug company marketing programs”? if you think about it for a minute you would realize that is their whole reason for being. there is NO benefit to YOU in data mining. or even to your doctor. only the corporation. so, you’re saying that corporations have a right NOT ONLY to dig around in our private relationships with our doctors, but to BENEFIT from it. I don’t understand people like you.
T. A. Coss
Harpy- Nice post, but a few things which you may want to consider, firstly all such data mining is de-identified of specific patient data so there is no exposure as you may have suggested.
Secondly consider this. A pathogen is let loose in a local community, let’s say its initial symptom is diarrhea. The first evidence that this is a broad based problem just may be in a sudden and dramatic spike in the local sales of Kaopectate or Lomotil of local pharmacies. Might not this be of interest as an indicator of a larger problem, perhaps even a terrorist attach?
Information along is arguably never nephritis, that comes from its use by people. As for those seeking to inform patients of treatments that may be beneficial to their quality of life, I’m struggling to find out why that’s a problem,
Thomas A. Coss, RN
Dear harpy
I was a drug rep for 10yrs, till 8 yrs ago.
I’m now a research analyst of small drug firms, at an investment bank. I’m not a lawyer, I consult w several on a wide variety of issues… except this one.
The feedback I’ve gotten on this issue though, has been that Vt is an “exceptional state” on many fronts, including pre-emption.
For you to get the best care, your practitioner needs to review all available information. Rx firms target their best opportunities (like any marketer) and the Rx data allows for that. Physicians use their best judgement. Reps need to make a pitch that resonates, then remind & repeat.
Given the number of “expert Physicians”, Rx firms, new brand names drugs and state laws, I believe there is more consistancy, practicality, integrity and a common interest in following the laws rather than breaking the laws in the HC n Rx industry. It’s the number of “invested” parties in the HC industry that keep it tight… like the Vermonts of the world.
I’m glad the courts have considered this and come to their senses.
I'm with Harpy
I recently read a book called Our Daily Meds I suggest anyone who thinks it is a good idea for pharma to have this information to read this book.
Pharma is out of control dangerous drugs ghost writers lawyers can’t win against them in court because they have too much money and influence. Some of us are afraid to go to our doctors when we are ill as we no longer believe the medications he will give us are safe.
I do not want to be the next viox victim who does?
It is all well with pharma to pay for the dead as they pay so little compared to the profit margin. I do not want to be one of the dead they pay for. I know I am the exception as most people are too overwhelmed trying to earn a living in this too big to fail society but I am thinking the tide is changing. The too big to reign in pharma may very soon find itself up against a tired and shy consumer like myself that will avoid them at all cost. If a drug has not been on the market 20 years I am not taking it. I am talking loud and clear to all the people I know and many other are too.
For everything too big that has cost too much already time to think again. We are not all as dumb or quiet as you think we are.
Justice in MI
Sorry to distract from the main topic, but I read the following above from “Dear Harpy”:
“The feedback I’ve gotten on this issue though, has been that Vt is an “exceptional state” on many fronts, including pre-emption.”
In what ways is Vt “exceptional” re: preemption? If you’re thinking of Levine, that was a case brought by Wyeth, not Levine, and, of course, it was decided in the US Supreme Ct.. Vermont’s product liability system re: drugs is, as far as I know, pretty much the same as virtually all other states.
Indeed, the only “exceptional” state on preemption is my own, Michigan, where we have had a full FDA preemption shield law since 1996.
Even the guys at Drug and Device Law blog, who defend companies, have described Michigan as unique, and as a _plaintiff’s_ “judicial hellhole” (their phrasing).
Doc
All MDs have to do is opt out individually and their data is restricted at the local rep level. If more would do this, it would stop the disproportionate allocation of resources (samples) to only high prescribing providers.
harpy
T.A. Coss - firstly, “de-identified” has less and less meaning as time goes on. there have been a few very public cases where people have taken “de-identified” info and re-identified it quite easily. obviously, I don’t have as much faith as you do that pharma is going to follow the rules.
secondly - your second point makes no sense. data-mining is used for marketing purposes, not as a warning system. pharmaceutical companies buy the information, data-miners do not report it for free. kaopectate is OTC and wouldn’t be included anyway. data-mining is of prescription drugs. and, imho, if we don’t already have enough ways to catch terrorists without data-mining, we should just give it up right now.
and lastly, Doctors inform patients of treatments for their various conditions. doctors are informed of those treatments in various ways - such as peer-reviewed journals. data-mining is used by pharmaceutical companies to see who is selling their products and how they should direct their marketing efforts. marketing is not education. marketing has never been about education. marketing is how companies sell things.
dear harpy - see above. and remember - marketing is about selling. no more, no less.
Lynn J. Small
Halfway down the slippery slope…
Seems the next logical step in the digital era is linking specific drugs to specific individual targets. For example, someone with Medical Issue A just *happens* to see an advertisement in the Google or Facebook sidebar for Drug X which also just *happens* to be just what the person needs. Gee, what a co-incidence, no?
Companies would argue, of course, that no one individual knows anything about any other particular individual since everything is jumbled data bits in a cyber basket. If no one knows anything about anyone then what’s the problem? **rolling eyes**
And besides, since companies are now the legal equivalent of people (money is speech, you know) only the company knows identities so individual people are not accountable.