In a set-back to freedom of commercial speech the Federal Appeals Court in Boston up held the New Hampshire and Maine Laws restricting mining of prescription data.
The First Circuit Court wrote “we are not persuaded that the regulated data transfers embody restrictions on protected speech.”
New Hampshire's law prohibits pharmacies, benefits managers, insurance companies and data-mining companies from selling or using prescription information that identifies doctors for commercial purposes, including influencing sales. Bulk data including prescribers' zip codes, location and medical specialties may be released.
This decision reverses both the New Hampshire and Maine Decisions made by circuit court judges. It also opens up the playing field for states to adopt similar measures.
The opening of the opinion outlined the government’s position that cost versus patient benefit is what is driving the policy makers decisions:
“The spiraling cost of brand-name prescription drugs is a matter of great concern to government at every level. New Hampshire has attempted to curb this escalating problem by enacting innovative legislation. Certain affected companies have challenged New Hampshire's legislative response, and that challenge raises important constitutional questions that lie at the intersection of free speech and cyberspace. The tale follows.
Pharmaceutical sales representatives, known in industry argot as "detailers," earn their livelihood by promoting prescription drugs in one-on-one interactions with physicians. A valuable tool in this endeavor, available through the omnipresence of computerized technology, is knowledge of each individual physician's prescribing history. With that informational asset, detailers are able to target particular physicians and shape their sales pitches accordingly. Convinced that this detailing technique induces physicians to prescribe expensive brand-name drugs in place of equally effective but less costly generic drugs, New Hampshire enacted a law that among other things prohibited certain transfers of physicians' prescribing histories for use in detailing.
IMS and Verispan issued a joint statement, “We are disappointed with the First Circuit Court of Appeals decision.”
“Two federal courts previously have examined the issue and validated the view that the First Amendment protects the dissemination of prescriber-identifiable data, which we believe is vital to efforts to improve the quality, efficiency and safety of our healthcare system. We are currently reviewing the decision and evaluating potential next
steps.”
In April 2007, U.S. District Judge Paul Barbadoro in Concord threw out the law. Another federal judge later ruled against a similar law in Maine, relying heavily on the New Hampshire decision.
New Hampshire Attorney General Kelly Ayotte appealed Barbadoro's decision, saying the law protects doctor-patient relationships and the health and safety of patients while also helping to contain health care costs.
The appeals court agreed, saying: "In combating this novel threat to cost-effective delivery of health care, New Hampshire has acted with as much forethought and precision as the circumstances permit and the constitution demands."
“This law helps protect the privacy of doctor-patient relationships and helps stabilize health-care costs. Here in New Hampshire, we continue to work to improve our health-care system and this law is an important part of those efforts,” Gov. John Lynch, New Hampshire said in a statement.
Others find this ruling unnerving, according to Richard Samp at the Washington Legal Foundation, The First Circuit’s decision is a dangerous threat to First Amendment rights. The court bought into New Hampshire’s argument that when it regulates speech undertaken in the course of business transactions, the First Amendment doesn’t even come into play. The logical implication of that holding is that there are no meaningful restraints on government regulation of speech by the business community.
John Kamp, Executive Director of the Coalition for Healthcare Communications noted that: The case is wrongly decided and would create a very strange precedent in today's data centered world if not overturned. Modern public policy and social discourse is fully informed by data such as those involved in this case. To suggest that the First Amendment does not apply to data that informs discourse mocks of the protections of the First Amendment. Other courts will invalidate this decision.
The Coalition stands ready to support IMS as it moves to counter this decision.
This is a setback to freedom of commercial speech, it will be interesting to see what the 2nd Circuit decides in the case that is pending there, if there is a circuit split (one court deciding one way and one another) the Supreme Court will be forced to take on this issue. Depending on how that case goes, we may see a plethora of states passing bans on data mining in the coming months.
Key Documents
1st Circuit Court of Appeals Opinion: IMS Health and Verispan vs. New Hampshire
IMS Verispan: Joint Statement
New Hampshire Governor: Statement of IMS vs. New Hampshire
NY Times: Federal Court Upholds Drug Privacy Law
AP: NH Prescription Privacy Law Upheld