Mining For Gold At The Supreme Court

A group of pharmaceutical data miners recently won a case in the U.S. Supreme Court and got a decision that could have major implications beyond just that industry. The case — Sorrell v. IMS Health, Inc. — involved a challenge to the constitutionality of a Vermont law that prohibited pharmacies from selling information that disclosed the prescription writing practices of physicians, if that information was to be used for marketing purposes. The information at issue did not disclose the identity of the patient, but rather disclosed how often a particular physician prescribes a particular medication. Pharmaceutical companies use this information to help their reps “detail” their products. That is, the reps provide on to doctors to encourage them to prescribe a particular brand. Vermont’s stated reasons for the legislation was to protect privacy and to lower heath costs. The legislature had concluded that “detailing” resulted in physicians prescribing branded products rather than lower cost generics. By limiting the information available to detailers, the legislature apparently hoped to provide a back door boost to generics. The Supreme Court was unimpressed. First, it noted that the information was speech. And as such, the legislation had to comply with the First Amendment. A law cannot burden even “commercial speech” unless it advances a substantial government interest and is drawn as narrowly as possible to achieve that goal. Under that standard, the Vermont legislation had a tough way to go. The privacy concern was a bit of a stretch to put it mildly. The problem was, the legislation allowed pharmacies to provide the information to just about anyone who wasn’t planning to use the information for marketing. But that undermined the privacy claim. If information is private, it’s private no matter who wants it. So the privacy concern wasn’t substantial. And while the legislature certainly has an interest in keeping health care costs under control, it can’t accomplish that goal by outlawing speech that is neither false nor misleading. The legislation didn’t prohibit the misuse of the information, it prohibited the acquisition of the information in the first place. That approach failed the “narrowly drawn” requirement. So why does this decision matter beyond the world of pharmaceuticals? Because Vermont argued that data mining was conduct, not speech, and therefore, not subject to First Amendment protection at all. Had the Supreme Court adopted that approach, any number of states may have introduced legislation to hinder data mining across the board. The Sorrell holding, though ensures that states will not be able to do that very easily.