US Supreme Court oks pharmaceutical companies' data mining

On Wednesday, by a majority of 6-3, the US Supreme Court declared the State of Vermont's attempt to protect medical privacy, by restricting data mining of patient information, unconstitutional. In Sorrell v. IMS Health Inc., No. 10–779, the Court said:

"Pharmaceutical manufacturers promote their drugs to doctors through a process called “detailing.” Pharmacies receive “prescriber-identifying information” when processing prescriptions and sell the information to “data miners,” who produce reports on prescriber be-havior and lease their reports to pharmaceutical manufacturers. “Detailers” employed by pharmaceutical manufacturers then use the reports to refine their marketing tactics and increase sales to doctors.Vermont’s Prescription Confidentiality Law provides that, absent theprescriber’s consent, prescriber-identifying information may not besold by pharmacies and similar entities, disclosed by those entities for marketing purposes, or used for marketing by pharmaceutical manufacturers. Vt. Stat. Ann., Tit. 18, §4631(d). The prohibitionsare subject to exceptions that permit the prescriber-identifying in-formation to be disseminated and used for a number of purposes, e.g., “health care research.” §4631(e).Respondents, Vermont data miners and an association of brand-name drug manufacturers, sought declaratory and injunctive relief against state officials (hereinafter Vermont), contending that §4631(d) violates their rights under the Free Speech Clause of theFirst Amendment. The District Court denied relief, but the Second Circuit reversed, holding that §4631(d) unconstitutionally burdens the speech of pharmaceutical marketers and data miners without adequate justification.
Held:
1. Vermont’s statute, which imposes content- and speaker-basedburdens on protected expression, is subject to heightened judicialscrutiny. Pp. 6–15."

Bottom line: pharmaceutical companies get first amendment protection for marketing based on data mining which blows a hole in the principle of patient confidentiality. Justices Breyer, Ginsburg and Kagan dissented.

"The Vermont statute before us adversely affects expres-sion in one, and only one, way. It deprives pharmaceuticaland data-mining companies of data, collected pursuant tothe government’s regulatory mandate, that could help pharmaceutical companies create better sales messages. In my view, this effect on expression is inextricably related to a lawful governmental effort to regulate a commercial enterprise. The First Amendment does not require courts to apply a special “heightened” standard of review whenreviewing such an effort. And, in any event, the statutemeets the First Amendment standard this Court has previously applied when the government seeks to regulatecommercial speech. For any or all of these reasons, the Court should uphold the statute as constitutional...

In short, the case law in this area reflects the need to ensure that the First Amendment protects the “market-place of ideas,” thereby facilitating the democratic creation of sound government policies without improperly hamper-ing the ability of government to introduce an agenda, to implement its policies, and to favor them to the exclusion of contrary policies. To apply “heightened” scrutiny whenthe regulation of commercial activities (which often in-volve speech) is at issue is unnecessarily to undercut the latter constitutional goal. The majority’s view of this case presents that risk.

Moreover, given the sheer quantity of regulatory initia-tives that touch upon commercial messages, the Court’svision of its reviewing task threatens to return us to ahappily bygone era when judges scrutinized legislation for its interference with economic liberty. History shows that the power was much abused and resulted in the constitu-tionalization of economic theories preferred by individualjurists. See Lochner v. New York, 198 U. S. 45, 75–76 (1905) (Holmes, J., dissenting). By inviting courts to scrutinize whether a State’s legitimate regulatory inter-ests can be achieved in less restrictive ways whenever they touch (even indirectly) upon commercial speech, today’s majority risks repeating the mistakes of the pastin a manner not anticipated by our precedents...

The upshot is that the only commercial-speech-relatedharm that the record shows this statute to have brought about is the one I have previously described: The with-holding of information collected through a regulatoryprogram, thereby preventing companies from shaping a commercial message they believe maximally effective. The absence of precedent suggesting that this kind of harm is serious reinforces the conclusion that the harm here is modest at most...

The legitimate state interests that the statute serves are “substantial.” ...

These objectives are important. And the interests they embody all are “neutral” in respect to speech. Cf. ante, at
24.
The protection of public health falls within the tradi-tional scope of a State’s police powers. Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S. 707, 719 (1985). The fact that the Court normally exemptsthe regulation of “misleading” and “deceptive” information even from the rigors of its “intermediate” commercial speech scrutiny testifies to the importance of securing“unbiased information,” see 44 Liquormart, 517 U. S., at 501 (opinion of Stevens, J.); Central Hudson, supra, at 563, as does the fact that the FDA sets forth as a federal regulatory goal the need to ensure a “fair balance” of information about marketed drugs, 21 CFR §§202.1(e)(1),202.1(e)(5)(ii). As major payers in the health care system,health care spending is also of crucial state interest. And this Court has affirmed the importance of maintaining“privacy” as an important public policy goal—even in respect to information already disclosed to the public for particular purposes (but not others). See Department of Justice v. Reporters Comm. for Freedom of Press, 489 U. S. 749, 762–771 (1989); see also Solove, A Taxonomy of Privacy...

At the same time, the record evidence is sufficient to permit a legislature to conclude that the statute “directly advances” each of these objectives. The statute helps tofocusmanufac-turers likely possess. They have little, if anything, to dowith the name or prior prescription practices of the par-ticular doctor to whom a detailer is speaking. Shaping a detailing message based on an individual doctor’s prior prescription habits may help sell more of a particular manufacturer’s particular drugs. But it does so by divert-ing attention from scientific research about a drug’s safety and effectiveness, as well as its cost. This diversion comes at the expense of public health and the State’s fiscal interests...

The prohibition against pharmaceutical firms using this prescriber-identifying information works no more than modest First Amendment harm; the prohibition is justified by the need to ensure unbiased sales presentations, prevent unneces-sarily high drug costs, and protect the privacy of prescrib-ing physicians. There is no obvious equally effective, more limited alternative...

In sum, I believe that the statute before us satisfies the “intermediate” standards this Court has applied to restric-tions on commercial speech. A fortiori it satisfies less demanding standards that are more appropriately applied in this kind of commercial regulatory case—a case where the government seeks typical regulatory ends (lower drugprices, more balanced sales messages) through the use of ordinary regulatory means (limiting the commercial use of data gathered pursuant to a regulatory mandate). The speech-related consequences here are indirect, incidental, and entirely commercial.

Regardless, whether we apply an ordinary commercialspeech standard or a less demanding standard, I believe Vermont’s law is consistent with the First Amendment. And with respect, I dissent."

Let me repeat that -  the "prohibition against pharmaceutical firms using this prescriber-identifying information works no more than modest First Amendment harm; the prohibition is justified by the need to ensure unbiased sales presentations, prevent unnecessarily high drug costs, and protect the privacy of prescribing physicians. There is no obvious equally effective, more limited alternative".

Basically you don't harm the principle of freedom of expression by upholding the principle of  patient confidentiality through restricting pharmaceutical companies' ability to engage in unrestricted data mining which undermines medical privacy and leads to unnecessarily high drug costs.