June 23, 2011 — In a victory for data gathering companies, the pharmaceutical and biotechnology industries, advertising agencies, medical publishers and other media, the U.S. Supreme Court ruled in Sorrell v. IMS Health Inc. today that Vermont’s ban on marketing use of prescription data “turns on nothing more than a difference of opinion” and that the state’s justifications for imposing “content- and speaker-based burdens on protected expression” do not withstand “heightened scrutiny.”

The Supreme Court’s 6-3 decision in favor of IMS (No. 10-779), followed oral arguments presented April 26, during which the Justices signaled that Vermont’s law was an attempt by the state to manipulate the “marketplace of ideas” on behalf of ideas favored by the state while restricting the rights of pharmaceutical companies to target doctors with truthful messages.

“This is a victory for patients as well as industry,” said John Kamp, executive director of the Coalition for Healthcare Communication. “Although couched in terms of privacy and cost reduction, the Vermont law was a transparent attempt to censor industry speakers while enabling government and others to speak. Enlightened policy makers always knew it was a bad idea. Now, it’s clear that the ban is also a violation of the First Amendment,” he said.

“Patients are not served by censorship. Without good data, no one can make informed decisions, including doctors, patients, policy makers and industry,” Kamp continued. “This and similar state statutes were direct attacks on data gathering, analytics and use. Let’s hope the proponents of these statutes find better ways to advance their policy goals.”

Indeed, the Supreme Court’s opinion states that Vermont “may not burden protected expression in order to tilt public debate in a preferred direction.”

Entities that either joined or supported IMS in this case also are pleased with the outcome. “We have long maintained that Vermont’s prescriber data restriction law – and others like it – violate the U.S. Constitution by restricting speech in two ways: by limiting the transmission of factual and accurate information about prescribing practices; and also by limiting marketing that utilizes that information said Cathy Betz, vice president, Government Affairs, Wolters Kluwer.

“Moreover, these types of laws do nothing to improve healthcare, reduce costs or protect physician/patient privacy as proponents have claimed,” Betz noted. “Today’s ruling is a very important decision for commercial speech in general. The Court invalidated most any attempt to put limits on commercial free speech in advertising and marketing.”

Christopher A. Mohr, an attorney with Meyer, Klipper & Mohr PLLC, and counsel of record for the amicus brief filed in support of IMS by the Coalition, American Business Media, The Consumer Data Industry Association, CoreLogic, The National Association of Professional Background Screeners, and Reed Elsevier Inc. offered the following comment on the Supreme Court’s opinion.

“Today, the Court re-affirmed several basic First Amendment principles and their application to the database industry. First, it rejected any suggestion that the aggregation of information into a database renders it a commodity or ‘beef jerky.’  Databases (and the publication of the information within them) are unequivocally protected by the First Amendment,” Mohr said.

“Second, the case makes clear that the government cannot prevent the dissemination of accurate information (as it tried to in this case) by discriminating against particular speakers speaking on particular subjects.  This case involved pharmaceutical information, but its implications reached far broader than that. The opinion not only protects the rights of information publishers to make information available on a variety of subjects without government interference, but also ensures that the public may receive relevant information to make better business, economic and political decisions,” he said.

The Coalition will continue to offer ongoing analysis of this decision.