First Circuit Court of Appeals Upholds New Hampshire Law to Ban the Sale of Prescriber Data to Pharmaceutical Firms
November 19, 2008
The First Circuit Court of Appeals upheld the constitutionality of New Hampshire's first-in-the-nation law making doctors' prescription writing habits confidential. The ruling reversed a Federal District Court ruling last year that the law unconstitutionally infringed on free speech. (Disclosure: I served as Counsel for the public interest amici in the case.)
The court unanimously upheld the New Hampshire law. The majority found that the act does not regulate speech, but rather regulates only the conduct of health information companies that aggregate and sell prescription records. The concurrence concluded that the Act does affect speech of pharmaceutical marketers, but the regulation is nonetheless justified by the state's overriding interest in promoting cost containment in the pharmaceutical sector.
This is an important decision for data privacy advocates. The ramifications of giving companies a First Amendment right to sell data on all of our purchases, travel and activities would be staggering. The First Circuit ruled on the side of consumer privacy, admonishing that the First Amendment does not protect every exchange of information from traditional social and economic regulation. It refused to apply the First Amendment to the trading of prescription records for marketing purposes where "information itself has become a commodity." The court explained that applying the First Amendment to such trade in prescription data "stretches the fabric of the First Amendment beyond any rational measure."
The 148 pages of analysis exhaustively analyses the voluminous evidence amassed by New Hampshire demonstrating the negative effects on our health care system of allowing pharmaceutical marketers to use prescription record tracking to target their marketing efforts.
The court affirmed that states have a valid interest in regulating the use of prescription records to target marketing to doctors. The court found that the use of such information to identify doctors who prescribe lower cost drugs and target marketing campaigns at them has a demonstrable impact on pharmaceutical spending that states are not disempowered to respond to. Access to individualized prescription data also allows companies to target gifts, consultancies and other perks to their most favored physicians, in effect incorporating prescribers into the commission structure of their sales forces. These practices debase the medical profession and, the more the practices become public, break the chain of trust between doctor and patient.
The ruling is available at http://www.ca1.uscourts.gov/pdf.opinions/07-1945P-01A.pdf