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High court voids Vermont ban on prescription drug data mining

- Associated Press - Thursday, June 23, 2011

States cannot stop drug manufacturers and data-mining companies from using information about the prescription drugs individual doctors like to prescribe, the Supreme Court ruled Thursday.

The court voted 6-3 to strike down a Vermont data-mining law aimed at controlling health care costs by boosting the use of generic drugs. The ruling imperils similar laws in Maine and New Hampshire that seek to control the flow of information about brand-name medications.

The information is extremely valuable to brand-name drug makers, which spend a reported $8 billion a year marketing their products to doctors. Among those efforts is the practice of detailing, in which sales representatives tailor their pitch to individual doctors based on the doctors' own prescribing habits.

Backers of the laws generally believe that drug prices are too high, and that one reason is the money drugmakers spend to market and advertise their products. The laws' supporters say that by preventing the sale of the information, they help protect medical privacy, control health care costs by promoting generic drugs, and improve public health.

But Justice Anthony M. Kennedy, writing for the court, said the Vermont law violates the speech rights of the data-mining and pharmaceutical companies. Justice Kennedy said that "the state cannot engage in content-based discrimination to advance its own side of a debate."

Justice Kennedy said that the free flow of commercial speech "has great relevance in the fields of medicine and public health, where information can save lives."

The Vermont law prevents the sale of information about individual doctor's prescribing records without the doctor's permission.

Pharmacies are required by state and federal law to get that information when they fill prescriptions. They sell the information, without patient names, to data-mining companies that, in turn, provide drugmakers with a detailed look at what drugs doctors choose for their patients.

Three companies that sell the information they gather IMS Health, SDI and Source Healthcare Analytics challenged the Vermont law.

The drug industry's trade group, the Pharmaceutical Research and Manufacturers of America, also joined the lawsuit because the Vermont law also prohibits drug companies from using the information for sales and marketing purposes.

The lawsuit says the information about doctors' prescribing patterns is important in helping spot trends, keeping tabs on the safety of new medications and studying treatment outcomes. The data-mining companies make the information available to researchers and the government at little or no cost.

Randy Frankel, an IMS vice president, praised Thursday's decision "as a great benefit in terms of improving patient care."

Mr. Frankel said the data is used in many areas of health care beyond pharmaceutical company marketing.

In dissent, Justice Stephen Breyer said the law should have been upheld as a constitutional regulation of business activity. Justices Ruth Bader Ginsburg and Elena Kagan also signed on to Justice Breyer's dissent.

Justice Breyer said that the court's ruling was broad enough to threaten significant "judicial interference with widely accepted regulatory activity."

He suggested that the drugmakers could use the ruling to challenge Food and Drug Administration limits on the "off-label" marketing of prescription drugs. Under existing regulations, companies may not tell doctors that a drug can be put to a use other than the one approved by the FDA.

Sen. Patrick J. Leahy, Vermont Democrat, criticized the decision as "another example of this court using the First Amendment as a tool to bolster the rights of big business at the expense of individual Americans."

The Associated Press joined other media companies and press freedom groups in urging the court to strike down the Vermont law.

The case is Sorrell v. IMS Health, 10-779.

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