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Healthy Skepticism Library item: 18968

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.


Publication type: Electronic Source

Silverman E
Vermont Data Mining Law Is Ruled Unconstitutional
Pharmalot 2010 Nov 23

Full text:

A federal appeals court has ruled that a Vermont law restricting data mining – specifically, the sale of prescription drug info that identifies prescribers and patients for commercial marketing purposes – is unconstitutional. The law was challenged by three healthcare research firms – IMS Health, SDI, Wolters Kluwer health – and the PhRMA trade group, which argued the legislation would hurt public access to healthcare info and violated commercial speech.
The decision is a setback for consumer advocates who maintained such laws can protect doctor-patient relationships and consumer privacy, promote patient safety and contain health care costs. Vermont, in fact, passed its law three years ago and then amended it in hopes of staving off court challenges (see here). Similar bills have been introduced elsewhere, but the only other states to enact legislation are New Hampshire and Maine, and both survived efforts to have them overturned (see here).
In explaining its ruling, however, the US Court of Appeals for the Second Circuit wrote that the Vermont law created an “impermissible restriction on commercial speech…Vermont has not asserted a substantial state interest in curbing the use of prescriber-identifiable data in marketing campaigns” (you can read the ruling here).
“We are very pleased with today’s decision. Patients will benefit from a more transparent, safer and more competitive healthcare system as a result of this ruling,” Harvey Ashman, IMS senior vice president and general counsel. says in a statement. “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.”
But in an impassioned dissent opinion, Judge Debra Livingston wrote: “I am unwilling to presume that simply because a business is engaged in the transfer of information rather than widgets that its activities are automatically entitled to the potent shield of thd First Amendment…And I cannot join a majority opinion that offers no principled basis for determining when such conduct should and should not be considered protected First Amendment activity.”
Meredith Jacobs, a pharmaceutical policy fellow at the Washington College of Law, which filed an amicus brief on behalf of the National Legislative Association on Prescription Drug Prices in support of the Vermont law, says the ruling should not be interpreted as a death knell for further legislative actions elsewhere, because the split in court rulings adds to uncertainty, but does not close any doors.
“It’s important for states to keep working on the issue of protecting this data and it shows this area hasn’t been fully fleshed out by the courts,” she tells us. “The Second Circuit opinion includes a very strong dissent that the law isn’t speech but even if it is, it’s justified by a substantial state interest. It’s not a settled issue.
“Remember, the First Circuit ruled the New Hampshire law is a commercial transaction not speech, while the majority of the Second Circuit said (the Vermont data mining law) is speech and the state hasn’t met the burden to restrict it…This leads to a circuit split and increases the likelihood the US Supreme Court may hear it.”
“The dissent understood that Vermont is trying to protect medical privacy and keep drug costs low, not regulate the First Amendment,” Kevin Outterson, an associate law professor at Boston University, writes us. “The First Circuit decision covering Maine, New Hampshire and Massachusetts was better decided, giving states some freedom to protect consumers.”
By the way, one of the early champions of the Vermont law was Julie Brill, who was assistant attorney general at the time and, last year, became one of the FTC commissioners.


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