U.S. SC: Vt. law violates companies' First Amendment rights

Jessica M. Karmasek Jun. 23, 2011, 1:38pm

WASHINGTON (Legal Newsline) -- Vermont Attorney General Bill Sorrell says he is "disappointed" with the U.S. Supreme Court's rejection of a state law that requires doctors' consent before their prescription records can be used to market prescription drugs.

The Court, in a majority opinion filed Thursday, held that the law violates the First Amendment rights of pharmaceutical companies and data miners who brought the suit in 2007.

"We are, of course, disappointed with this result. We knew going in that this Supreme Court has frequently sided with large corporations. Our challenge now will be to continue to work to protect medical privacy and reduce health care costs without violating the Supreme Court's ruling. This is a step back, but not the end of the story," Sorrell said in a statement.

At issue in the case is the practice of "data mining," which is defined as the creation of usable information out of masses of stored computer entries.

The plaintiffs, IMS Health Inc., Verispan LLC, Source Healthcare Analytics Inc. and Pharmaceutical Research and Manufacturers of America, challenged the Vermont statute banning the sale, transmission or use of prescriber-identifiable data for marketing or promoting a prescription drug unless the prescriber consents.

The state enacted the Prescription Confidentiality Law in response to the Vermont Medical Society's unanimous resolution in 2006 that the sale and marketing use of doctors' prescribing practices without consent is "an intrusion into the way physicians practice medicine."

Similar laws were enacted in New Hampshire and Maine.

Many pharmacies sell records that reveal which doctors prescribe which drugs, as well as the age and gender of the patient receiving the drug, without the consent of doctor or patient.

Data-mining companies then buy these records and sell them to drug companies, which in turn use them to target certain doctors with marketing for the newest and most expensive drugs.

However, those drug companies and data-mining companies at the center of the case argued that the law restricts non-commercial speech.

More than 30 state attorneys general filed a brief in support of the Vermont law. The Washington Legal Foundation, along with The Associated Press and the U.S. Chamber of Commerce, were among those that filed briefs in support of the drug and data-mining companies. The Institute for Legal Reform, an affiliate of the U.S. Chamber, owns Legal Newsline.

In its 6-3 decision, authored by Justice Anthony Kennedy, the nation's highest court said Vermont's law impermissibly "disfavors marketing" and "disfavors specific speakers, namely pharmaceutical marketers."

Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg and Elena Kagan, would have upheld the law because, in their view, evidence showed that it would advance Vermont's interests in protecting public health and privacy.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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