Sorrell v. IMS Health Inc.

2011-06-23

Headline: Court strikes down Vermont law limiting sale and marketing use of doctors' prescription data, protecting drugmakers' and data firms' ability to target doctors while limiting state privacy restrictions.

Holding: The Court held that Vermont’s ban on the sale, disclosure, and marketing use of prescriber-identifying pharmacy records imposed content- and speaker-based burdens that violated the First Amendment and could not survive heightened scrutiny.

Real World Impact:

Strikes down Vermont ban on marketing use of prescriber-identifying data.
Allows drugmakers and data firms to buy and use prescribing data for marketing.
Physicians can still consent to disclosure of their own prescribing data.

Topics: medical privacy, pharmaceutical marketing, free speech, data privacy, healthcare costs

Summary

Background

Vermont enacted Act 80 to bar pharmacies and similar entities from selling or letting others use records that identify which doctors prescribed which drugs, unless the doctor consents. The law also forbids drug companies and their sales representatives from using that prescriber-identifying information for marketing. Data-mining firms and brand-name drug makers sued, a federal district court denied relief, the Second Circuit found the law unconstitutional, and the Supreme Court reviewed the case.

Reasoning

The majority said speech used for pharmaceutical marketing is protected by the First Amendment. It found the statute singled out both a subject matter (marketing) and particular speakers (drug manufacturers and their detailers), so it required heightened judicial scrutiny. The Court concluded Vermont’s law did not meet that test: it allowed broad sharing and use of the same information for many purposes while specifically burdening some speakers, and the State’s privacy and cost- saving goals were not advanced in a narrowly tailored way.

Real world impact

The ruling means Vermont cannot enforce §4631(d) as written to block sales and marketing use of prescriber-identifying pharmacy records. Drugmakers and data firms that rely on such information for targeted marketing keep First Amendment protection to use it unless a different, properly tailored law is adopted. Doctors remain able to consent or withhold consent under the statute’s terms.

Dissents or concurrances

Justice Breyer (joined by Justices Ginsburg and Kagan) dissented, arguing the law was ordinary commercial regulation that should be reviewed under the less demanding commercial-speech test and, on that basis, would survive constitutional scrutiny.