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IMS v Ayotte: NH's Prescription Information Law is constitutional


The Federal Court of Appeals for the First Circuit in a 2 to 1 decision held that New Hampshire's Prescription Information Law "that among other things prohibited certain transfer of physicians' prescribing histories for use in detailing" regulates conduct, not speech, thereby removing "the challenged portions of the statute from the proscriptions of the First Amendment."

The caseIMS Health Inc. and Verispan, LLC v Kelly A. Ayotte et al; No. 07-1945; United States Court of Appeals for the First Circuit; November 18, 2008.

The holding
The Federal Court of Appeals for the First Circuit in a 2 to 1 decision held that New Hampshire’s Prescription Information Law “that among other things prohibited certain transfer of physicians’ prescribing histories for use in detailing” regulates conduct, not speech, thereby removing “the challenged portions of the statute from the proscriptions of the First Amendment.” The appellate court further found that the act when construed narrowly is sufficiently clear to withstand plaintiffs’ vagueness challenge and concluded that plaintiffs’ Commerce Clause challenge fails, as the law affects only domestic transactions. The appellate court reversed the decision of the district court, which found the relevant portions of the Prescription Information Law an unconstitutional abridgement of free speech and vacated the injunction against enforcement of the Prescription Information Law.

The facts
Plaintiffs’ “complaint alleged that the statutory ban on transfer and use of prescriber-identifiable information transgressed the Free Speech Clause of the First Amendment, was void for vagueness, and offended the Commerce Clause.” Plaintiffs IMS Health Inc. and Verispan, LLC, are in the business of data mining and “purchase data of the type and kind [‘when a prescription is filled . . . such as the name of the patient, the identity of the prescribing physician, the drug, its dosage, and quantity dispensed’], aggregate the entries, group them by prescriber, and cross-reference each physician’s prescribing history with physician-specific information available through the American Medical Association. The final product enumerates the prescriber’s identity and specialty, the drug prescribed, and kindred information.” Plaintiffs “record, group, and organize several billion prescriptions each year. To protect patient privacy, prescribees’ names are encrypted . . . .” “New Hampshire’s concern . . . is . . . commercial use: the exploitation of the mined data by pharmaceutical companies, whose detailers [pharmaceutical sales representatives] use it in marketing [brand-name] drugs to physicians.” “That information enables the detailer to zero in on physicians who regularly prescribe competitors’ drugs, physicians who are prescribing large quantities of drug for particular conditions, and ‘early adopters’ (physicians with a demonstrated openness to prescribing drugs that have just come onto the market). The information also allows the detailer to tailor her promotional message in light of the physician’s prescribing history.”

The Prescription Information Law made the “goals of the . . . statute pellucid: the protection of privacy interests, the safeguarding of patient health, and cost containment.” “Pharmaceutical detailing has pushed the art of marketing into uncharted waters. In the service of maximizing drug sales, detailers use prescribing histories as means of targeting potential customers more precisely and as a tool for tipping the balance of bargaining power in their favor. As such, detailing affects physician behavior and increases the likelihood that physicians will prescribe the detailers’ (more expensive) drugs. The New Hampshire legislature found this advantage in bargaining power invidious (chiefly because of its inflationary impact on drug prices) and determined that it compromised the integrity of physician decision-making. Consequently, the legislature sought to level the playing field not by eliminating speech but, rather, by eliminating the detailers’ ability to use a particular informational asset-prescribing histories-in a particular way.”

The court’s opinion
“In our view, the portions of the law at issue here regulate conduct, not speech. Unlike stereotypical commercial speech, new information is not filtered into the marketplace with the possibility of stimulating better informed consumer choices (after all, physicians already know their own prescribing histories) and the societal benefits flowing from the prohibited transactions pale in comparison to the negative externalities produced. This unusual combination of features removes the challenged portions of the statute from the proscriptions of the First Amendment.”

“Even if the Prescription Information Law amounts to a regulation of protected speech-a proposition with which we disagree-it passes constitutional muster. In combating this novel threat to the cost-effective delivery of health care, New Hampshire has acted with as much forethought and precision as the circumstances and the Constitution demands.”

Other jurisdictions
State legislation similar to New Hampshire Prescription Information Law is pending in Arizona, the District of Columbia, Illinois, Kansas, Maine, Maryland, Massachusetts, New York, North Carolina, Rhode Island, Vermont, Washington, and West Virginia. On March 5, 2008, Vermont postponed the effective date of its prescription information law until July 1, 2009.

In IMS v Rowe (D.Me. 2008) 532 F.Supp. 2d 183, the United States District Court for the District of Maine concluded that “the provisions of the Maine law [An Act to Amend the Prescription Privacy Law] that seeks to restrict the use and disclosure of commercial information violates the free speech guarantee of the First Amendment” and granted, in part, a motion for a preliminary injunction and enjoined the enforcement of portions of the Prescription Privacy Law. As Maine lies within the federal jurisdiction of the First Circuit, IMS v Rowe’s pronouncements are now constrained by the more recent decision of the First Circuit in IMS v Ayotte.

Judge Kwong is a Judge for the State of California and a Pharmacist for Kaiser Permanente, Los Angeles, California. He is a graduate of University of Utah, School of Pharmacy, and University of California at Los Angeles, School of Law. Dr Sun is a Pharmacist for Kaiser Permanente, Los Angeles, California, and is a graduate of University of Southern California, School of Pharmacy.

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