The Supreme Court, last Thursday, handed a substantial win to data-miners, brand name pharmaceutical companies, and First Amendment advocates. With a 6-3 decision in Sorrell v. IMS Health Inc, the Court held that a Vermont statute prohibiting data mining of doctor records for prescription information is an unconstitutional infringement of First Amendment rights. Specifically, the Court found that the Vermont law (both on its face and in its practical operation) imposed a burden based on the content of speech and the identity of the speaker. The state, moreover, failed to meet the standards of heightened scrutiny, as it was unable to show that the statute directly advanced a substantial governmental interest and that the statute was drawn to achieve that interest.
According to the Court, the provision of Vermont’s 2007 Prescription Confidentiality Law (Vt. Stat. Ann. tit. 18, §4631(d) (2007)) at issue in this case has three crucial components: (1) it prohibits pharmacies, health insurers, and similar entities from selling prescriber-identifying information, absent the prescriber’s consent; (2) it prohibits pharmacies, health insurers, and similar entities from allowing prescriber-identifying information to be used for marketing, unless the prescriber consents; and (3) it bars pharmaceutical manufacturers and pharmaceutical marketers from using prescriber-identifying information for marketing, again absent the prescriber’s consent.
This prescription information, including the type and amount of drugs issued by specific doctors, is often used in the “detailing” work of pharmaceutical companies, in which they carefully examine a doctor’s prescribing records and patient information to determine marketing strategy and to whom to pitch what drug.
The Court consolidated two suits seeking declaratory and injunctive relief: one brought by Vermont data miners, and the other by an association of pharmaceutical manufacturers that produce brand-name drugs. The Second Circuit previously held that the statute violated the First Amendment, and the Supreme Court granted cert to resolve a circuit split, as the First Circuit held oppositely in examining Maine and New Hampshire statutes.
Legal analysts are already speculating about Sorrell’s impact not only for pharmaceutical data miners, but also for privacy rights in general: How can the precedent be used by the Internet industry to strike down state statutes seeking to prevent online tracking? (Ars Technica has a great discussion on the issue) At the same time, others (such as Adam Thierer of Forbes) contend that the decision is a significant win for commercial speech, and consequently advertisers and marketers in general.