TOPICS > Politics

Supreme Court Takes Up Case on Data Mining by Drug Companies

April 26, 2011 at 12:00 AM EST
Are prescription-drug records confidential medical data, or can drug companies use them to market their products? The Supreme Court heard arguments Tuesday on some states' laws aimed at curbing the marketing process known as "data mining." Ray Suarez reviews the arguments with the National Law Journal's Marcia Coyle.
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JEFFREY BROWN: Now, the U.S. Supreme Court takes up a First Amendment vs. privacy case.

Ray Suarez has the story.

RAY SUAREZ: Today’s arguments focused on moves by some states to curb a marketing practice called data mining. In this case, pharmaceutical companies use doctors’ prescription drug records to help them pitch sales for drugs.

Marcia Coyle of “The National Law Journal” was in the courtroom, as always, and joins us now.

Marcia, how did this dispute between data miners and big pharma and the state of Vermont make it to the Supreme Court?

MARCIA COYLE, “The National Law Journal”: Well, Ray, you know that, when we get a prescription for drugs, we go into a pharmacy, we get the drugs, we leave. And we don’t think much about what happens to that actual prescription.

And federal law requires pharmacies to keep a record of the prescription and not to reveal the patient’s identity. But pharmacies can and do sell the other information in those prescriptions to data-mining companies, who sift through all this information, spot trends and patterns, and then sell that to, as in this case, drug companies, who can then have their sales representatives do targeted marketing of brand-name drugs to doctors.

Well in 2007, Vermont passed a law that said doctors’ prescription information may not be sold by pharmacies or used to market drugs, unless the physician consents. Three data-mining companies and a trade organization challenged the law in federal court. Ultimately, the lower federal appellate court found that Vermont’s law violated the First Amendment, that it was a restriction, an unconstitutional restriction, on the commercial speech of these companies.

Vermont then brought the appeal to the Supreme Court that we heard arguments in today.

RAY SUAREZ: So — see if I understand this — the data-mining companies are saying, in a sense, because the state has the information, we should be able to request it.

MARCIA COYLE: The data-mining companies are saying that Vermont does allow this information to be used by others; Vermont, by this law, is discriminating, violating the First Amendment by discriminating on the basis of the identity of the speaker, here, the drug companies.

And this, the Supreme Court has said, most notably last year in the Citizens United campaign finance ruling, you may not discriminate on the basis of a speaker’s identity.

RAY SUAREZ: So, this was a First Amendment case? If so, why exactly? This isn’t the way we think of it, as protesters or a newspaper or press freedoms, or even the arguments over WikiLeaks. How can data miners sit on the First Amendment?

MARCIA COYLE: It’s actually the access to the information, which — and then the use of that information, which the data-mining companies and the drug — drug companies say is commercial speech, which the Supreme Court has recognized as being protected by the First Amendment.

Vermont argued today that there is no First Amendment violation. Vermont’s purpose in enacting the law was to protect the privacy of the doctors’ information, to encourage prescription of generic drugs, which would help lower health costs in the state, and also to protect the public health, which it felt could be endangered by drug companies’ sales representatives presenting one-sided information to the doctors.

Vermont’s attorney, Bridget Asay, and the Obama administration’s deputy solicitor general, Edwin Kneedler, argued that all this law does, basically, is put the physician on the same level as the pharmacy company, the pharmacies. The pharmacies have all the control right now about whether this information enters the stream of commerce. Now the physician is on the same level and can or cannot give consent.

RAY SUAREZ: So, how did the justices take these two arguments, from the data miners on one hand and from the state on the other?

MARCIA COYLE: Well, for Vermont’s attorney, I think it was akin into running into a buzz saw.

Justice Scalia was most critical of the state law. He criticized the purpose, saying, really, the purpose here is to protect doctors from being bothered by drug sales reps. And the effect of the law, he said, really is to restrict the most effective, efficient means of communication between drug companies and doctors.

On the other side, Justice Sotomayor raised an interesting, she said, difficulty with the argument of the drug companies. She told Thomas Goldstein, who was representing the data mining companies and the drug trade association that in today’s society, there’s very little privacy for individuals anymore because of the Internet and computer access.

And she said, why doesn’t a state have a legitimate interest in protecting a segment of the population that says: “I entered this one transaction. That was the only transaction I believed I was entering. I didn’t want my name or any information to go elsewhere. It’s just this one transaction”?

And Mr. Goldstein said, well, first of all, this information is very important information. We’re talking about lifesaving medicines, that the drug companies want to get that information about those medicines to doctors. And he also said that the law has exceptions in it for other uses, but the only speaker here who can’t use this information are his clients, the drug — the data-mining companies and the drug companies.

RAY SUAREZ: Were you really watching a battle in court today about data mining and prescription information? Or is there wider application, based on how the high court rules?

MARCIA COYLE: I think there can be wider application in this sense.

On the side of Vermont, you had consumer organizations, 35 states, as well as the federal government, who are concerned that a broad ruling in favor of the data-mining companies and the drug companies here could undermine consumer privacy protections.

Then, on the other side, you have the drug companies and other businesses concerned that if the court restricts access to this kind of information — and, Ray, you know data-mining companies, that’s a huge industry today — those businesses fear, then, that they won’t get the kind of information they say they need to make important business decisions, not just marketing decisions, research decisions, other decisions that they think could be beneficial to consumers.

RAY SUAREZ: And your sense of how things looked today? Was there a general sense that you’re going to follow precedent on the Citizens United case, which…

MARCIA COYLE: I think things look bad for Vermont.

RAY SUAREZ: Marcia Coyle of “The National Law Journal,” thanks for joining us.

MARCIA COYLE: My pleasure, Ray.