Constitutional Law

Vt. law on Rx data-mining ruled unconstitutional

By By The Associated Press

MONTPELIER, Vt. ? A Vermont law that restricts companies' use of information about the drugs doctors prescribe is unconstitutional on free speech grounds, a federal appeals court ruled yesterday.

Three companies that gather information on drugs ordered by doctors and then sell the info to pharmaceutical manufacturers had sued over the so-called data mining law. Passed in 2007, it bans the sale, transmission or use of prescriber-identifiable data for marketing a prescription drug unless the prescribing doctor consents.

A three-judge panel of the 2nd U.S. Circuit Court of Appeals said the law is a restriction on commercial free speech that violates the First Amendment.

By law, Vermont pharmacies must collect information including the prescriber's name and address; the name, dosage and quantity of the drug; the date and place the prescription is filled; and the patient's age and gender.

At issue is what happens to that information.

The law restricts pharmacies from distributing the information. Vermont officials say drug companies were using the information as a "covert marketing tool" and believe that restricting it helps protect medical privacy, control health care costs by promoting generic drugs and improve public health.

But drug companies say the information about doctors' prescribing patterns is key because it helps them spot trends, keep tabs on the safety of new medications and study treatment outcomes.

The three companies involved are IMS Health, SDI and Source Healthcare Analytics.

"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," said Harvey Ashman, senior vice president and general counsel for IMS Health.

In its 2-1 ruling, the 2nd Circuit panel said the law doesn't achieve what Vermont wants to achieve and that a more limited restriction would be better.

"The state has not demonstrated that its interests in protecting public health and containing health care costs could not be as well served by a more limited restriction on speech," the majority opinion said.

In a dissenting opinion, Judge Debra Ann Livingston said the ruling would have "pernicious broader effects" in First Amendment law. She said she couldn't accept the idea that data-mining operations have an inherent right to use the First Amendment as a shield against reasonable regulation.

"The transfer of data has become a burgeoning business, with those engaged in such transfers frequently having no intention of engaging in expressive or communicative conduct," she wrote.

Vermont may appeal.

"We're very disappointed in the outcome of the case," said Assistant Attorney General Bridget Asay. "We have some options to seek further review. We're starting to consider those now."

Full post as published by First Amendment Center on November 23, 2010 (boomark / email).