Supreme Court Strikes Down Ban On Health Data Mining

Pharmaceutical companies target doctors for sales pitches through a process known as “detailing.” Data miners comb through prescription records to find out which doctors are treating which conditions with which drugs, and sell this data to drug companies so that they can pitch doctors on drugs they are likely to actually prescribe. If your doctor is treating a lot of people who take a certain unusual heart medication, detailing allows the pharmaceutical industry to learn that fact and try to convince the doctor to prescribe a different but similar drug.

A major problem with this practice is that it drives up the cost of care. Drug companies routinely discover that a doctor frequently prescribes an older or generic drug that is cheaper for patients, and then target that doctor to convince them to prescribe a newer, much more expensive drug. For this reason, Vermont passed a law banning detailing. Under Vermont’s law, prescription records can be used for any number of purposes, but they cannot be used by detailers to help drug companies target their sales pitches.

In a 6-3 decision by Justice Kennedy (Justice Sotomayor joined the five conservatives), the Supreme Court just struck this law down. According to the majority, the law violates the First Amendment because it allows prescription data to be used for many purposes, but not for data mining that benefits drug companies:

Under Vermont’s law, pharmacies may share prescriber-identifying information with anyone for any reason save one: They must not allow the information to be used for marketing. Exceptions further allow pharmacies to sell prescriber-identifying information for certain purposes, including “health care research.” And the measure permits insurers, researchers, journalists, the State itself, and others to use the information.

In the Supreme Court’s words, the law “imposes a burden based on the content of speech” — information gleaned from data can be used to improve the quality of drugs but not to sell them — and thus the law violates the First Amendment.

One silver lining to this decision is the fact that the Court leaves open the possibility that a law that does not target detailing specifically could survive scrutiny. “If Vermont’s statute provided that prescriber-identifying information could not be sold or disclosed except in narrow circumstances then the State might have a stronger position.” In the mean time, however, yesterday’s decision is a big win for the drug companies, and an equally big loss for privacy and medical cost control.