Last year, I was co-counsel on an amicus curiae brief (pdf) in IMS Health v. Ayotte, a case about a New Hampshire state law that banned the sale of prescriber-identifiable prescription drug data for marketing purposes. This week, the US Court of Appeals for the First Circuit upheld (pdf) the New Hampshire law. This decision overturns the ruling (pdf) of the lower court, which held that the New Hampshire law violated the free speech rights of data mining companies.
The First Circuit rejected the free speech argument and based their decision on two points. First:
In our view, the portions of the law at issue here regulate conduct, not speech. Unlike stereotypical commercial speech, new information is not filtered into the marketplace with the possibility of stimulating better informed consumer choices […] and the societal benefits flowing from the prohibited transactions pale in comparison to the negative externalities produced. This unusual combination of features removes the challenged portions of the statute from the proscriptions of the First Amendment.
Even if the Prescription Information Law amounts to a regulation of protected speech — a proposition with which we disagree — it passes constitutional muster. In combating this novel threat to the cost-effective delivery of health care, New Hampshire has acted with as much forethought and precision as Constitution demands.
The New Hampshire law focused on “physician detailing,” where pharmaceutical sales representatives tailor their sales pitches to individual physicians based on their past prescription-writing habits. In passing the law, the state legislature attributed high prescription drug costs, in part, to both the funding pharmaceutical companies devote to detailing, and the fact that “detailed” physicians tend to write prescriptions for pricier drugs. The First Circuit spoke to this, noting:
The record contains substantial evidence that, in several instances, detailers armed with prescribing histories encourage the overzealous prescription of more costly brand-name drugs regardless of both the public health consequences and the probable outcome of a sensible cost/benefit analysis.
When passing the prescription confidentiality law, the New Hampshire legislature also noted the privacy interests that patients and physicians have in preventing third parties from receiving in-depth data on every prescription written. The marketing companies in the New Hampshire case weren’t asking for data that would outright link individuals to their prescriptions. However, there are privacy problems that can arise from “de-identified data.” In the amicus brief that I was co-counsel on, we detailed these problems, arguing:
Although de-identification measures are increasingly innovative and computationally complex, patient data is still vulnerable to attacks because sophisticated re-identification programs are also being developed. Individuals can be re-identified using information such as zip code, date of birth, and gender and then comparing that data to publicly available information. Such information is easily accessible via birth and death records, incarceration reports, voter registration files, and driver’s licensing information.
Maine and Vermont have similar prescription confidentiality laws; several states are considering such laws. Earlier this year, a California bill that would have allowed pharmacies to sell customers’ prescription data for marketing purposes was defeated in the state Assembly.