WLF to CMS: Deem Medical Textbooks Educational Materials or Face Potential First Amendment Challenge

May 16, 2013 – The Centers for Medicare & Medicaid Services (CMS) is likely “to find itself the target of a First Amendment lawsuit by affected parties” if it does not consider medical textbooks to be “educational materials that directly benefit patients” which are excluded from a reporting requirement under the final rules implementing the Physician Payment Sunshine Act, according to a May 15 letter to CMS from the Washington Legal Foundation (WLF).

In its letter (CMS Textbook Policy), WLF asks CMS to delay application of reporting requirements to medical textbooks until it has had an opportunity to examine the First Amendment implications of including these items as “transfers of value” from manufacturers to doctors.

Coalition for Healthcare Communication (CHC) Executive Director John Kamp remarked that the WLF letter “is strong, balanced, nuanced and likely to be effective. Indeed, if WLF convinces CMS to reverse itself on textbooks, the same reasoning applies to journal supplements, reprints and Website publications that are distributed with company support.”

Specifically, WLF contends the following in its letter:

• The distribution of medical textbooks is speech protected by the First Amendment;
• Although CMS is not banning speech, it is substantially burdening speech (and such burdens are subject to First Amendment constraints);
• The Sunshine final rule’s disclosure requirement imposes a substantial burden on the right to speak by distributing medical textbooks;
• Application of the Sunshine Act to medical textbooks does not serve any substantial government interests; and
• CMS can avoid First Amendment difficulties by construing the Act as inapplicable to medical textbooks.

“Applying the reporting requirements to medical textbooks would constitute a serious infringement on the First Amendment rights of pharmaceutical companies to disseminate medical texts and the First Amendment rights of doctors to receive such information,” WLF Chief Counsel Richard A. Samp wrote in the letter to CMS Acting Administrator Marilyn Tavenner.

“The U.S. Supreme Court has repeatedly held that disclosure requirements of this sort [imposed by the final rule] are subject to ‘exacting scrutiny’ and can pass muster under the First Amendment only if shown to serve important government interests that outweigh the burdens they impose on speakers,” the letter states.

The WLF also states that the burden of reporting and doctors’ concerns about being included on a list of those receiving payments from drug companies will cause doctors to decline offers of medical textbooks and cause companies to cease disseminating them. Because medical textbooks communicate truthful information that helps doctors treat patients, the WLF asserts that they are fully protected by the First Amendment, as demonstrated by multiple U.S. Supreme Court decisions. “By all accounts, medical textbooks supplied by drug companies to doctors ‘directly benefit patients’ – doctors regularly use information gleaned from the textbooks in their treatment of patients,” according to the WLF.

As further evidence that medical textbooks constitute protected speech under the First Amendment, the WLF states that its 1998 lawsuit against the Food and Drug Administration (FDA) resulted in the FDA being subject to a permanent injunction limiting FDA authority to suppress manufacturer dissemination of medical textbooks discussing off-label uses of their FDA-approved products.

“There is little evidence that Congress intended to single out textbook dissemination and other expressive activities for special disapprobation, but the effect of the Act (as interpreted by CMS) is to burden this expressive activity to such an extent that much of the activity will cease,” the WLF letter states. Samp concludes the letter by stating that “in light of the grave constitutional issues raised by CMS’s rule, courts will not defer to CMS’s reading of the Act … even if they deem it a plausible reading,” and advises CMS to reconsider and allow these educational materials to be excluded from reporting requirements.

“Exempting these as educational items not only makes sense under the Sunshine Act, it makes great public policy sense,” CHC’s Kamp said. “Informing doctors about the latest science and practice guidelines drives improved patient care. Everyone can salute that result.”

Kamp Commentary: Supreme Court Decision Could End “Pay for Delay,” Hurt Patent Protection

April 1, 2013 – By John Kamp, Executive Director, Coalition for Healthcare Communication

While not directly about communication and marketing, last week’s oral argument in the U.S. Supreme Court in FTC v. Actavis regarding ANDROGEL could create a significant bottom line hit to our businesses.  A decision against pharma would further shorten the patent protection period on many branded drugs. 

Here is a quick summary of the important legal and practical issues and what to watch for as the decision moves to Congress.

1. If the Supreme Court agrees with the Federal Trade Commission that “pay for delay” settlements are presumably illegal, they will nearly halt. 

2. The Supreme Court is not deciding here what the Constitution means – where they have final authority – but only is deciding what the current commercial statutes require. Even if the Supreme Court agrees with pharma that such settlements are presumed valid under the existing antitrust and competition laws, Congress could invalidate that presumption by changing the law. Three such proposals already have been introduced.

3. The legal struggle is over three legal principles. Laws favor all three – patent protection, settlements over litigation, and vigorous competition. There are no easy choices here for the Supreme Court.

4. The biopharma industry seems to have the legal advantage. The FTC has struggled for more than a decade just to get this case to the Supreme Court and has lost more challenges on the way than it has won. The law supports settlements over litigation, even in antitrust cases. Further, one Justice recused himself, requiring the FTC to get five votes out of eight to prevail.

5. Also, Justice Kennedy, often seen as the swing vote, suggested during oral arguments that if Congress made a drafting mistake enabling these settlements in the Hatch-Waxman statute upon which the decision rests, it is up to Congress, not the courts, to change the law.

6. However, the FTC argued vigorously that the “pay for delay” drug patent settlements create extraordinary profits for the private companies. Further, it argued, these harm consumers much more than in any other antitrust settlement situation. The FTC asserted that the settlements create a legal anomaly whereby the generic challenger can make more money by settling than by winning and marketing the generic product. That’s because the settlement protects the monopoly pricing rather than speeding competition and lower prices to consumers.

7. Pharma faced tough questioning from skeptical judges, but so did the government. There is a good chance that the Supreme Court will support settlements in its decision, but either way, Congress can change the Hatch-Waxman statute to disfavor them.

8. Meanwhile, the populist policy and politics favors drug cost savings, especially in the face of escalating healthcare costs and the need to control the growing deficit. Although the law seems to favor pharma, especially with the more conservative justices, the politics of less expensive drugs may be tougher, especially as the case moves to Congress.

9. Don’t count the industry out yet. Biopharma and device companies have an unusual ally in this fight: generic drug companies and their associations. Also, the Pharmaceutical Research and Manufacturers of America (PhRMA) and its allies have had some recent success reminding Congress that innovative drugs require patent protection and the profits that brings

to rebuild drug pipelines and enable the advance of modern medicine. Laws flying in the face of that common sense argument are not slam-dunks.

Stay tuned.

FDA Should Review and Update Off-label Policy, Kamp Says

July 6, 2012 – In the aftermath of the July 2 announcement of a $3 billion settlement between GlaxoSmithKline and the U.S. Department of Justice – in part due to allegations that GSK promoted off-label uses – the Food and Drug Administration needs to take a fresh look at its off-label promotion policy, according to Coalition for Healthcare Communication Executive Director John Kamp.

“Doctors and patients need to know the latest scientific evidence on the effective and safe use of drugs, but the antiquated FDA rules on off-label communication prohibit companies from fully educating them,” Kamp said. “It’s time to put

a stop to these prosecutions. They impede doctor education and patient care and likely violate the First Amendment.”

In the recent settlement, GSK resolves previous criminal and civil liabilities. Under the settlement’s terms, GSK will plead guilty to misdemeanor violations of the Federal Food, Drug, and Cosmetic Act related to the marketing of Paxil for pediatric use and of Wellbutrin for certain uses, as well as a failure to include information about the initiation or status of certain Avandia studies.

“Today brings to resolution difficult, long-standing matters for GSK,” GSK CEO Sir Andrew Witty said in a July 2

statement. “Whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made.”

Kamp added that “policy makers and the public should understand that GSK is fully compliant today with the government’s censorship mandates and has been for many years.”

Current agency policy allows health professionals to prescribe drugs for off-label use, but does not allow manufacturers to communicate with doctors and patients about these off-label uses to consumers.  Under these rules, all health professionals and others – except the drug sponsor – are allowed to engage in communications about the off-label use. “The fact that this rule restricts the speech of none but the drug sponsor violates consistent decisions by the Supreme Court, including the recent IMS ruling,” explained Kamp.

Moreover, in its most recent draft guidance on off-label promotion, “Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices,” issued Dec. 27, 2011, the agency describes the legal framework for the agency’s restrictions on off-label speech, but stipulates that “these off-label uses or treatment regimens may be important therapeutic options and may even constitute a medically recognized standard of care.”

In Kamp’s view, the government must move forward to enable drug companies to fully participate in education and communication about new uses of approved drugs. Without this, doctors and patients are not as likely to have full information about the safety and effectiveness of available medical options. However, Kamp acknowledges that changes to current policy may require Congressional action.

“It is in the best interest of patients everywhere that the FDA revisits its off-label policy swiftly,” he noted. If the agency does not, it may be time for the U.S. Supreme Court to settle the matter, he explained. “I’m optimistic that federal appeals courts and the Supreme Court will step in to review the off-label censorship of drug companies under the mandates of the First Amendment,” he said.

Court Decision in Tobacco Case Bolsters First Amendment Protections for Commercial Speech

March 5, 2012 – In a case that highlights First Amendment limits to FDA regulation of marketing, the U.S. District Court for the District of Columbia granted a motion for summary judgment Feb. 29 in favor of five tobacco companies who called unconstitutional an FDA rule requiring that new, mandatory graphic images be added to specific textual warnings included on cigarette packaging.

“The Court concludes that these mandatory graphic images violate the First Amendment by unconstitutionally compelling speech,” U.S. District Judge Richard J. Leon wrote in the court’s opinion (Civil Case No. 11-1482 (RJL)).

“If courts refuse to allow this sort of regulation of tobacco products, which cannot be used safely, it’s fair to assume that many other FDA regulations governing speech are at risk. The court’s decision reminds us that the bar for restricting speech is high,” said John Kamp, Executive Director, Coalition for Healthcare Communication.

“While the tobacco regulations were unprecedented, if the FDA can’t get tobacco restrictions past the courts, how can it possibly continue to restrict medicine companies from telling the truth about the off-label uses of their products?” Kamp continued.

The tobacco companies successfully argued that the congressionally mandated graphic warnings unconstitutionally compel speech, “and that such speech does not fit within the ‘commercial speech’ exception” allowing certain types of government-mandated, informational disclosures. In legal terms, the court decided that these mandated warnings had to be analyzed under the “strict scrutiny” test of First Amendment law and that the rules failed that standard.

Stating that the FDA rule’s graphic-image requirements are not the type of purely factual disclosures that are reviewable under a less-stringent standard, the court found that the FDA failed to satisfy the burden of demonstrating that its rule is narrowly tailored to achieve a compelling government interest and, thus, violated the First Amendment.

“While the line between the constitutionally permissible dissemination of factual information and the impermissible expropriation of a company’s advertising space for Government advocacy can be frustratingly blurry, here the line seems quite clear,” the opinion states.

In light of the court’s decision, “it’s fair to ask how the increasingly intrusive ‘fair balance’ disclosures would fare under the ‘compelled speech’ theory applied in this case,” Kamp said. “Even more importantly, it’s time for the industry to ask whether the compelled disclosures do more harm than good to the public health.”

MMM Previews Pharma Debates in DC: Prepare for a Wild Ride in 2012

Dec. 12, 2011 — Facing a need to decrease spending and boost revenues, the federal government will continue to target the pharmaceutical industry in 2012, according to a recent report in the December issue of Medical Marketing & Media. In the report, “Outlook 2012: Detailing DC,” author Matthew Arnold states that although pharma is fighting back, it faces a number of significant challenges and needs “to make the case for itself as a source of good jobs and a center of American innovation.”

The comprehensive report draws heavily from remarks by Coalition Executive Director John Kamp and others at the November meeting of leading members of the Coalition, held in Washington, D.C.  Arnold lists several controversies likely to arise in 2012, including:

• Proposals to end or limit the tax deductibility of communication and marketing by pharma and other companies
• Potential imposition of additional discounts (“rebates”) on medicines sold to the government
• Efforts to reduce patent protection for biologics from 12 years to seven years
• Possible multiple “riders” to legislation to fund FDA under the Prescription Drug User Fee Act V (PDUFA V)
• Possible guidance from the FDA on social media
• Rules from HHS’ Centers for Medicare & Medicaid on the Sunshine Act

Arnold suggests that ongoing challenges to the FDA off-label marketing restrictions may provide some regulatory clarity for pharma marketers. “FDA’s policy on off-label uses of approved drugs is being challenged on First Amendment grounds,” says Arnold. Among other issues, many industry lawyers see a “potential disarming of the rationale behind the jaw-dropping settlements for off-label marketing,” Arnold states.

Drawing on Kamp’s November briefing, Arnold notes that with Wall Street now in the public’s crosshairs, the pharma industry is getting less negative attention, and health care marketing is becoming less of a target than medical product safety. “We are still in the post-Vioxx era,” Kamp said in the report. Thus, Members of Congress are less focused on pharma marketing and more focused on food and drug safety, and the proposed new medical device approval process.

Arnold also quotes Kamp’s report, saying that “the best kept secret about healthcare reform is that if it keeps, it’s a pretty good deal for pharma.”

PhRMA Files Amicus Brief to Support Harkonen Fraud Conviction Appeal

Nov. 22, 2011 – Stating that “a robust dialogue” between pharmaceutical companies and the public “would be seriously chilled” if the U.S. Court of Appeals for the Ninth Circuit upholds the 2009 criminal conviction of former InterMune CEO W. Scott Harkonen for allegedly making false statements about Actimmune in a press release, the Pharmaceutical Research and Manufacturers of America (PhRMA) recently filed an amicus or “friend of the court” brief in support of Harkonen’s appeal.

“The Coalition welcomes PhRMA’s participation in this case,” said Coalition for Healthcare Communication Executive Director John Kamp. “The PhRMA brief demonstrates widespread industry support for forcing federal and state law enforcers to recognize the value of industry communication in managing patient health and the power of the recent Supreme Court decision in Sorrell v. IMS Health to defend against these cases.”

The PhRMA brief asserts: “This case concerns an unprecedented prosecution of a pharmaceutical executive for expressing in a press release his scientific opinion about the development of a drug to treat disease. An affirmance of the decision … would threaten core First Amendment principles by establishing that scientific debate over how to interpret data can constitute a crime.”

PhRMA’s brief calls out the following points:

• The press release in question was not a misstatement of objectively verifiable fact, a trigger for criminal liability;
• The trial court unconstitutionally permitted the jury to find that the press release was false “not because no reasonable scientist could have reached the conclusion drawn, but because some scientists, mainly those of the [Food and Drug Administration (FDA)], disagreed with that conclusion”;
• The trial court’s approach violated the First Amendment because a person “may not be convicted for fraud based upon speech about scientific matters unless the level of scientific consensus is such that no reasonable expert could find the defendant’s statement to be true.” 

The amicus brief reiterates the Supreme Court decision in Sorrell, which “confirmed that pharmaceutical manufacturers’ communications with doctors about the safety and efficacy of drugs fall within the First Amendment ambit.” PhRMA then states that “the courts should be particularly leery of a government’s attempt to criminalize speech concerning ‘the effectiveness of [a] particular method of treatment of disease.’”                                     

“Sponsor companies have the best information available on the safe and effective use of their drugs,” according to the Coalition’s Kamp. “Systematically eliminating their participation in discussions with healthcare professionals harms patients. It’s time for government to rationalize these rules in court.”

In addition to the Harkonen appeal, other cases that the Sorrell decision may impact in the near future include:

• U.S. v. Caronia appeal: Alfred Caronia claims that FDA’s limitations on speech regarding off-label uses violated the First Amendment. The U.S. Court of Appeals for the Second Circuit requested additional information following the Supreme Court’s Sorrell decision.
• Par Pharmaceutical Inc. v. FDA: Par seeks to preserve its First Amendment right to provide truthful information to physicians and other healthcare providers about off-label uses. The case, filed with the U.S. Court of Appeals for the District of Columbia Circuit, calls into question the FDA’s authority to censor truthful speech by drug sponsors.
• An appeal by three former Purdue Pharma executives who pled guilty to misbranding charges regarding off-label marketing, is slated to be heard Dec. 6 by the U.S. Court of Appeals for the District of Columbia Circuit. The former Purdue executives are appealing their exclusion from federal health care programs.

“There is no doubt that Sorrell empowered companies and industry advocacy groups to question the government’s authority when it attempts to chip away at the protections afforded speech by the First Amendment,” Kamp said. “We applaud PhRMA for getting involved.”

RPM Report: Pandora’s Box Officially Open as New Legal Challenges to FDA’s Off-label Restrictions Emerge

Oct. 24, 2011 – After the U.S. Supreme Court struck down speaker- and content-based restrictions in Sorrell v. IMS Health, legal experts, drug manufacturers and other industry interest groups are testing the waters to determine whether that opinion leaves the door open for new challenges to certain FDA regulations, specifically the agency’s ban on most off-label promotion, according to an article in The RPM Report.

Kate Rawson writes in the October issue of the publication that the Sorrell decision could lead the U.S. Court of Appeals for the Second Circuit – the same court that “reversed a lower court decision in Sorrell and deemed Vermont’s data mining restrictions to be a violation of the First Amendment” – to overturn the conviction of Alfred Caronia, a sales representative who was charged with promoting a drug for an off-label indication. In light of the Sorrell decision, the Second Circuit considering Caronia’s appeal asked for briefs regarding the relevance of the Sorrell opinion on this case.

The government dismisses the argument that Sorrell affects “the constitutionality of Caronia’s conviction.” The government also denies that FDA regulations lack the “coherence and clarity” to provide manufacturers with the “guidance they need on off-label promotion.”

The Coalition’s John Kamp is quoted in this comprehensive article covering the current state and future of off-label promotion. Read the full article, “Off Label Changes Coming? Sorrell Ruling Prompts New Legal Challenges,” courtesy of The RPM Report.

Par Pharma Case Asserts That First Amendment Protects Truthful Off-label Speech

Oct. 18, 2011 – A case filed by Par Pharmaceutical, Inc. against the FDA seeks to preserve Par’s First Amendment right to provide truthful information to physicians and other healthcare providers about the off-label use of Par’s prescription drug, Megace® ES, which is approved for the treatment of anorexia, cachexia, or an unexplained significant weight loss in patients diagnosed with acquired immunodeficiency syndrome (AIDS).

In addition to prescribing Megace ES on-label to treat their AIDS patients, physicians frequently prescribe the drug off-label to treat wasting in non-AIDS, cancer, and geriatric patients. FDA regulations call for Par to refrain from speaking about the approved use of Megace ES to physicians who may prescribe the drug for unapproved uses.

According to a statement issued by Par, it hopes to “elicit tailored and constitutionally permissible regulatory guidance to ensure that physicians may be kept abreast of valuable, off-label information about prescription drugs to aid in their provision of quality and informed patient care.”

Coalition for Healthcare Communication Executive Director John Kamp is quoted in an article on the filing in Policy and Medicine, saying, “Par’s challenge goes directly to the heart of FDA’s jurisdiction to censor truthful speech by drug sponsors. After the Supreme Court decision in IMS, someone was bound to bring it. Now, the whole industry will be watching.”

To read the full Policy and Medicine article, go to: http://www.policymed.com/2011/10/phar-pharmaceuticals-vs-fda-calling-for-truthful-speech-vs-fda-approved.html

As always, please feel free to post your thoughts on this important issue below.

Experts Weigh In on Implications of Sorrell Decision

Aug. 1, 2011 — The recent Supreme Court decision in Sorrell v. IMS Health Inc. is earning robust commentary in the legal community because it extends greater First Amendment protection for marketing and expands that protection to data mining and use. In addition, many legal scholars openly are questioning whether the FDA can continue its current regulation of “off-label” communication by drug companies as well as whether the government can continue to use privacy as a justification for marketing limits.

The following are summaries and links to recent articles on the decision written by lawyers from Arnold & Porter, Jenner & Block, and Wiley Rein, as well as an article from the National Legislative Association on Prescription Drug Prices (NLARx) that outlines the organization’s disappointment with the decision.

Does Sorrell v. IMS Health Mark the End of Off-Label Promotion Prosecution?   In an article appearing in BNA’s Pharmaceutical Law & Industry Report, Arnold & Porter partners Lisa Blatt, Jeffrey Handwerker, John Nassikas and Kirk Ogrosky discuss the impact of the Sorrell decision on “the debate over the constitutional validity of ‘off-label’ promotion prohibitions.” The authors assert in the piece that Sorrell “provides strong support for challenging FDA’s efforts to regulate what the government calls the off-label promotion of drugs for medical uses that are not approved by the FDA.” Indeed, the authors state, “Sorrell builds on prior Supreme Court precedent in establishing a strong foundation to argue that a pharmaceutical company’s truthful, non-misleading information about its products cannot be subjected to content-based and speaker-based restrictions.” Read more by clicking here.

Does the Supreme Court’s Sorrell Decision Threaten Privacy?   An article written by Wiley Rein Partner Bruce McDonald in the firm’s Privacy in Focus publication discusses the role privacy plays in the Sorrell case. Although some privacy advocates assert that the Supreme Court’s decision is a blow to privacy, McDonald states that “another reading is simply that invoking privacy arguments as justification for a statute having another purpose can prove to be an unsuccessful legislative or litigation strategy.” He also comments that the Court’s willingness to give considerable weight to First Amendment protections in a commercial context may trouble privacy advocates, but notes that “a conclusion that the majority decision is anti-privacy would appear to be overreaching,” largely because the majority “clearly doubted” that the Vermont statute in question sought to advance privacy. Read more at http://www.wileyrein.com/publications.cfm?sp=articles&id=7222

Supreme Court Observations: Sorrell v. IMS Health Inc.   An article appearing in the Washington Legal Foundation’s Legal Pulse publication, written by Paul M. Smith, chair of Jenner & Block LLP’s Appellate and Supreme Court Practice and co-chair of its Media and First Amendment Practice, analyzes the dissenting opinion in the 6-3 decision. “This dissent reflects a remarkable indifference to the core First Amendment principle that government should not use direct or indirect regulation of speech as a means of influencing people not to make perfectly lawful decisions,” Smith writes. Read more at http://wlflegalpulse.com/2011/06/24/supreme-court-observations-sorrell-v-ims-health-inc/

Will Supreme Court Decision in Sorrell v. IMS Tie States’ Hands in Medical Records Privacy Efforts?   The National Legislative Association on Prescription Drug Prices (NLARx) calls the Sorrell decision “a huge disappointment to legislators who have sought to protect the confidentiality of private prescription records.” An article on the NLARx Website, written by NLARx Executive Director Sharon Anglin Treat, states that “the expansive decision by the U.S. Supreme Court, which extends new protections to commercial speech, should be a concern to anyone interested in keeping private information private.” Read more at: http://www.reducedrugprices.org/read.asp?news=6207

From The RPM Report: Data Mining Case Struck Down by Supreme Court; IMS Prepares for Future Battles

July 27, 2011 — A recent article written by Kate Rawson in The RPM Report provides an excellent summary of the Supreme Court’s decision in Sorrell v. IMS Health Inc. and discusses the decision’s implications for the pharmaceutical industry. Coalition for Healthcare Communication Executive Director John Kamp is quoted in this insightful article, which is reprinted below, with permission.  

When the Supreme Court threw out a Vermont law that prevented pharmaceutical companies from using physician prescribing data for marketing purposes, the unexpectedly broad opinion was cheered by Big Pharma and data miners alike. But IMS Health is already gearing up for the next data mining battle. And this time, the company says, the fight will be about protecting patient privacy.

By Kate Rawson 

“We are feeling really good right now.”

That is SDI Health VP-Marketing Jody Fisher’s reaction to the Supreme Court’s 6-3 decision in Sorrell vs. IMS Health to strike down a Vermont law that restricted the use of physician prescribing data by pharmaceutical companies for marketing purposes. The court, which issued its decision on June 23, ruled that the state statute (known as Act 80) violated the free speech clause of the First Amendment.

Given that data miners like SDI Health are in the business of providing physician prescribing data to the pharmaceutical industry, it’s understandable that Fisher would be breathing a sigh of relief. The ruling is also an important one for pharmaceutical companies, who risked losing a key tool in effectively marketing their products to physicians. (See “Flying Blind: Learning to Live Without Physician Prescribing Data,” The RPM Report, January 2007.)

The Vermont case turned on IMS Health’s argument at the Supreme Court that the state discriminated against pharmaceutical companies by banning their use of the data for a specific purpose (marketing), while allowing other parties (include Vermont itself) access to the same data. During oral arguments on April 23, IMS argued that Vermont cannot restrict truthful advertising, as regulated by the Food & Drug Administration, just because it doesn’t like the message.

A majority of the Supreme Court agreed. “On its face, the law enacts a content-and speaker-based restriction on the sale, disclosure, and use of prescriber-identifying information,” Justice Anthony Kennedy’s majority opinion states. The statute “imposes an aimed, content-based burden on detailers, in particular detailers who promote brand-name drugs. In practical operation, Vermont’s law goes even beyond mere content discrimination, to actual viewpoint discrimination.”

In addition to Vermont, New Hampshire and Maine had also passed laws that prevented pharmaceutical companies from using health care professionals’ prescribing data without their consent. Additional states have been waiting in the wings as the legal battles played out. But with the Supreme Court striking down the Vermont law, the New Hampshire and Maine statutes are likely to come off the books, and other states may be deterred from enacting similar provisions.

The Supreme Court opinion may well mean the end of direct threats to the use of physician prescribing data, but it doesn’t mean that states—and perhaps, a few interested members of Congress—won’t find other ways to achieve the same goals. As SDI’s Fisher says, “there are lots of creative people out there.” And, he says, they may start putting that creativity to use.

IMS Health is already preparing for additional attacks. Whether legislation can be crafted in such a way that it does not run afoul of the Supreme Court is uncertain, but Vermont’s failed defense of its law may in fact provide a roadmap for those who want to restrict access to prescriber data. IMS, at least, expects the battle will shift away from a focus on protecting physician privacy, which was the basis for Vermont’s oral arguments at the Supreme Court. This time, IMS says, anti-data mining advocates will focus on protecting patient privacy.

Three States, Split Circuits

The Supreme Court opinion in Sorrell vs. IMS Health is an unqualified win for both Big Pharma and the data mining companies that provide drug companies with information on physicians’ prescribing habits. To drug marketers, the data are essential for a host of sales and marketing activities: establishing sales force territories, compensating sales representatives, crafting direct-to-consumer advertising campaigns, and creating promotional materials and sampling efforts.

And they are also critical in helping sales representatives effectively tailor their marketing messages. For example, if prescribing data show that a physician tends to prescribe a competing medication, sales representatives can talk up the benefits of their company’s product over that specific competitor. Or, if a health care professional is a high prescriber of a company’s product, they might be a candidate to lead a continuing medical education program.

The data also have benefits outside marketing: they can be used to inform physicians of drug safety problems, enroll patients in clinical trials and ensure formulary compliance. Private insurance companies and government health care programs use the information to target health care professionals for counter-detailing efforts (i.e., to persuade physicians to use generics over more expensive branded products).

Here’s how data mining works: When a prescription is filled, the pharmacy collects that data (as a requirement of federal law), strips it of patient-identifiable information, and sells it to companies like IMS Health, SDI Health and Wolters Kluwer. Those vendors then aggregate the data and sell it to pharmaceutical manufacturers in customized reports, which show, for a given physician, the number of prescriptions written for a drug, prescriptions for other drugs in the same class, refills and switches.

For some physicians, the fact that the pharmaceutical industry has access to their prescribing data simply rubs them the wrong way. Some observers trace back the fight over physician prescribing data to a cocktail party conversation between an OB/GYN and a drug representative in California, during which the rep described the physician’s prescribing practices in “excruciating detail,” much to the physician’s alarm and dismay. (See “Loose Lips Sink Ships,” The RPM Report, January 2007.)

That conversation eventually led California to consider banning the use of prescribing data by marketers in 2003. In 2006, New Hampshire became the first state to enact legislation, and Maine and Vermont quickly followed suit in 2007. The three laws have some differences, most notably that Vermont and New Hampshire physicians must first indicate that their data can be used for marketing (an “opt-in” provision), while Maine’s less-restrictive law assumes a physician’s data can be used for marketing unless he or she says no (an “opt out” provision). (See Exhibit 1.)

All three laws were immediately challenged in court by data miners and the Pharmaceutical Research & Manufacturers of America. The First Circuit Court of Appeals upheld the New Hampshire law in 2008 and the Maine law in 2010. At the same time, the Second Circuit Court of Appeals overturned a district court ruling in Vermont and found the state’s restrictions to be unconstitutional. In January 2011, citing the split in opinions between the appeals courts, the Supreme Court agreed to hear the case.

“A Narrow Class of Disfavored Speakers”

In the majority opinion in Sorrell vs. IMS Health, Justice Kennedy first addressed which standard the Supreme Court should use in determining the constitutionality of the Vermont statute.

The federal district court and Second Circuit Court of Appeals both used the Central Hudson test applicable to restrictions on commercial speech—but came to opposite conclusions, with the lower court upholding Act 80, and the appeals court reversing. Under Central Hudson, the government must show that the regulation directly advances a substantial interest and is no more restrictive of speech than is necessary.

Vermont argued that the data should be viewed by the Supreme Court in the context of a less demanding standard used for state regulation of economic activity. IMS Health, on the other hand, argued that the statute is subject to “heightened judicial scrutiny” typically reserved for noncommercial speech.

And, in a surprise to many observers, the Court agreed, and held that the commercial speech restriction is subject to heightened review. The First Amendment requires heightened scrutiny “whenever the government creates a regulation of speech because of disagreement with the message it conveys,” the opinion states. Because the statute imposes a speaker- and content-based burden on protected expression, Act 80 is subject to heightened judicial scrutiny.

The statute “disfavors marketing, that is, speech with a particular content. More than that, the statute disfavors specific speakers, namely pharmaceutical manufacturers,” the majority opinion states. “As a result of these content- and speaker-based rules, detailers cannot obtain prescriber-identifying information, even though the information may be purchased or acquired by other speakers with diverse purposes and viewpoints. Detailers are likewise barred from using the information for marketing, even though the information may be used by a wide range of other speakers.”

The statute “imposes more than an incidental burden on protected expression,” the opinion continues. “Both on its face and in its practical operation, Vermont’s law imposes a burden based on the content of the speech and the identity of the speaker.” That has led some to suggest that the decision could lead to challenges to other restrictions on the pharmaceutical industry—including the constitutionality of restrictions on the communication of off-label uses. (See “Interpreting a Surprisingly Broad Decision.”)

“An Almost Limitless Audience”

The ruling that the statute merits higher scrutiny than the Central Hudson commercial speech standard is noteworthy, but the Supreme Court also declared that the statute would fail under Central Hudson. In that framework, the majority again found Vermont’s restrictions on physician prescribing data to be unconstitutional, rejecting the state’s assertion that Act 80 advances a “substantial government interest” in justifying the need for the restrictions.

Vermont advanced two reasons why Act 80 was necessary: (1) to protect the privacy of physicians, who, the state said, do not want their prescribing data to be used by pharmaceutical companies; and (2) to prevent reduce health care costs by preventing drug companies from effectively marketing their products. Neither passed muster with the majority of the Supreme Court justices.

Part of the problem with Vermont’s privacy argument is that the data aren’t completely private. In crafting its law, the legislature wanted to ensure that the prescribing data could continue to be used for non-marketing purposes, like formulary compliance and drug safety efforts. So the statute specifically restricted one party (pharmaceutical companies) from accessing the data for a specific purpose (sales and marketing efforts). (See Exhibit 2.)

“Assuming that physicians have an interest in keeping their prescription decisions confidential,” the statute “is not drawn to serve that interest,” the majority opinion says. Given the information’s widespread availability and many permissible uses—including insurers, researchers, journalists and the state itself—“Vermont’s asserted interest in physician confidentiality cannot justify the burdens that [the law] imposes on protected expression.”

Indeed, Vermont made the data available to “an almost limitless audience.” The statute “allows the information to be studied and used by all but a narrow class of disfavored speakers. Given the information’s widespread availability and many permissible uses, the State’s asserted interest in physician confidentiality does not justify the burden that [the statute] places on protected expression.”

Justice Kennedy speculates in the majority opinion whether a less-restrictive opt-out statute (like that passed in Maine) might be less of a burden on speech, but ultimately concludes that “a revision to that effect would not necessarily save” the statute. “Even reliance on a prior election would not suffice, for instance, if available categories of coverage by design favored speakers of one political persuasion over another.”

Would a Narrower Law Fare Better?

The opinion does appear to leave open the possibility that a statute with fewer exemptions might fare better with the Supreme Court.

“The State might have advanced its asserted privacy interest by allowing the information’s sale or disclosure in only a few narrow and well-justified circumstances,” Kennedy’s opinion says, with a reference to the Health Insurance Portability and Accountability Act. “A statute of that type would present quite a different case than the one presented here.”

PhRMA, however, doesn’t see that happening.

There are always other uses for physician prescribing data that a state would wish to preserve, PhRMA Exec VP and General Counsel Diane Bieri points out. Once states start to approve those uses, she says, “they would fall into the same trap” that Vermont found itself in. “It would be very challenging for any state to imagine a statute that could be narrowly tailored enough to withstand Supreme Court scrutiny.”

But Wiley & Rein counsel and Coalition for Healthcare Communication Executive Director John Kamp isn’t so sure. Up until the Supreme Court appearance, Vermont defended Act 80 using the cost-containment argument—that the state had an interest in controlling health care costs that outweighed any protections on commercial speech.

Indeed, the original intent of the Vermont law is quite clear: the legislature wanted to prevent drug companies from using prescribing data in hopes that such a restriction would lower health care costs. Make it harder for companies to sell their products, so the theory goes, and physicians will write fewer prescriptions for brand-name drugs, which run bigger price tags than generics. Physician privacy was also mentioned as a concern of the state legislature, but it did not appear to be the central goal of the legislation.

But a new legal team brought in for the Supreme Court appearance recognized that the majority of justices were unlikely to look kindly on the cost containment argument. So in its briefs to the Supreme Court and in oral arguments, Vermont focused instead on protecting the physicians’ right to privacy. That switch did not sit well with the justices, notably Justice Antonin Scalia, who aggressively questioned Vermont during oral arguments on the intent of the statute. (See Exhibit 3.)

Vermont’s eleventh-hour reliance on physician privacy as a justification for the law was a “clumsy, post-hoc rationalization,” Kamp says. Vermont “threw up privacy as a reason, but the justices saw right through it.”

If a better thought-out legal argument were presented, Kamp suggests, it’s possible that a case could succeed.

No Evidence of Cost Savings

While Vermont’s Asay focused on the physician privacy argument during oral arguments, she declined to acknowledge that the cost containment goal was the original legislative intent of Act 80. That stance clearly ended up damaging the state’s case.

In Vermont’s briefs filed with the Supreme Court, “the State contends that [the statute] advances important public policy goals by lowering the costs of medical services and promoting public health,” the majority opinion states. “If prescriber-identifying information were available for use by detailers, the State contends, then detailing would be effective in promoting brand-name drugs that are more expensive and less safe than generic alternatives.”

“This logic is set out at length in the legislative findings….Yet at oral argument here, the State declined to acknowledge that [the statute’s] objective purpose and practical effect were to inhibit detailing and alter doctors’ prescription decisions,” the opinion continues. “The State’s reluctance to embrace its own legislature’s rationale reflects the vulnerability of its position.”

Part of that vulnerability was that Vermont was unable to produce any evidence showing that the data mining restrictions had any effect on the state’s health care expenditures. “There is no direct evidence that there are any cost savings, and no way to interpret any impact on costs,” IMS Health VP-External Affairs Randy Frankel says.

Given the legislative history, however, the Vermont AG’s office may not have had much a choice. If the Vermont legislature “had just been less aggressive (and less candid) in declaring its commitment to reducing the sales of pharmaceutical companies, its law may well have passed muster—as indeed, Kennedy came close to conceding,” according to an analysis by long-time Supreme Court observer Lyle Denniston, in a post on SCOTUSblog.com.

Indeed, Vermont’s legal team may have simply fallen victim to a poorly conceived law. Asay, the assistant attorney general who represented Vermont, did a “perfectly decent job” during oral arguments, said Washington Legal Foundation chief counsel Richard Samp. “She got beaten up, but anyone would have in that situation.”

Is The Fight Really Over?

Despite the Supreme Court ruling, there are still many parties that do not want pharmaceutical companies to use prescribing data to market their products to physicians. And they may find ways to keep that fight alive.

The National Legislative Association of Prescription Drug Prices, formed by state legislators seeking to reduce drug prices and expand access to prescription drugs, is one group that says it is not giving up.

In a June 24 newsletter, NLARx quotes several legal analysts with suggestions for ways to work within the Supreme Court opinion. Washington College of Law Associate Director of the Program on Information Justice and Intellectual Property Sean Fiil-Flynn, who served as counsel for amici NLARx and AARP, suggests that there is room for more targeted medical records laws, like those that would “extend the protections of HIPAA to prescriber-identified prescription (and other medical) records.”

NLARx also cites Boston University law professor Kevin Outterson, who wrote the amici curiae brief on behalf of the New England Journal of Medicine and other parties, as saying that “the Vermont statute suffered from self-inflicted wounds, namely some incautious comments in the preamble” about the desire to control health care spending, and that “Vermont can fix the statute quite easily with the guidance given by the Court.”

One option, Outterson says, would be to make the statute a narrow extension of HIPAA giving the privacy right exclusively to the patient and a confidentiality right directly to the physician. Alternatively, he suggests, “Vermont can ban data mining by contract with participating pharmacies through Green Mountain Care,” its newly-enacted single payer health program. Finally, Vermont could also clarify that pharmacies collect this information only as a state-mandated record.

WLF’s Samp posits that a state could also try and pass a counter-detailing requirement for drug companies where a sales rep would essentially have to provide information about a competing generic or over-the-counter drug (Vermont had such a requirement in the original law, but it was amended). While industry could make a case that the requirement was “compelled speech,” Samp notes that the tobacco industry has repeatedly lost that argument in fights over warnings on cigarette packaging.

SDI Health’s Fisher sees that as a non-starter. “Given the act of detailing is probably more closely aligned with commercial speech or direct speech, and given that the opinion already essentially struck down the state’s ‘indirect’ approach to restricting speech, I think it would be very difficult to craft a similarly intended and unbalanced restriction that serves to balance the direct speech of sales representative.”

“I never want to say never, because there are a lot of creative legislators who seek to attack the issues here, but a lot of thought will need to go into another plan that ultimately serves to chill or imbalance speech,” Fisher says.

Whatever the path taken, IMS agrees that the fight is not over. “We don’t believe it will be the end of things,” Frankel says. While declining to give specifics on what IMS is planning for, “patient privacy will be a focal point going forward,” he predicted. “How states manage the privacy issue could impact everyone. We are not content to wait and sit by and not address these issues.”

One privacy argument that came out in the amicus briefs for Sorrell vs. IMS Health—but not addressed by the Court—is that the data are not truly anonymous and can be de-identified. But Frankel says it’s a “dead end” to try and make that kind of case: “We are constantly updating our processes” to prevent third parties from de-identifying patient data. WLF’s Samp agrees: “If one wanted to make that case, they would need to show that it is more than a theoretical possibility. I don’t see it getting very far.”

IMS’ future plans will be to inform the public on what it sees as the value of prescribing data to individual patients—a message the company used in the months leading up to the oral arguments. The company launched and continues to maintain a website at www.imsfreespeech.org with information about Sorrell vs. IMS Health, including a section in which the company makes a case that “patients suffer when information is limited.”

The website highlights the difficulty Eisai Co. Ltd. faced in getting rufinamide (Banzel) to Lennox-Gastaut Syndrome epilepsy patients in New Hampshire due to the state’s restrictions on physician prescribing data. Citing a Massachusetts Biotechnology Council case study, IMS says: “While most patients across the country received the new treatment very quickly, ‘the experience in New Hampshire did not serve patient care as well,’ and there were long delays in finding the doctors who treated the disease.”

Where is the Next Battlefield?

If a state does decide to move forward, Maine is unlikely to be that battlefield. Maine State Representative Rep. Sharon Treat (D-Hallowell), an advocate for the data mining restrictions and executive director of the advocacy group NLARx, points to a “very pro-pharma agenda” in Maine with Republican Governor Paul LePage and a Republican legislature.

“We have a very unpredictable government right now in Maine,” Treat says. “Those who support restrictions to physician prescribing data will have to wait until the climate is better.” The Maine legislature, in cooperation with the first Republican governor in 16 years, has spent much of 2011 repealing many laws passed by the last two Democratic administrations, including a state “Sunshine Act” that partially overlaps with the federal statute, and a pharmacy benefit manager transparency law.

Treat sees New Hampshire and Vermont as more fruitful political environments to carry on the fight. Vermont Governor Peter Shumlin (D) is a co-founder of the NLARx, which supports restrictions to physician prescribing data. Treat also points to New Hampshire’s libertarian strain and interest in protecting privacy as a combination that could keep the issue alive.

There is also a chance that the issue could be revisited by Congress. Capitol Hill has pretty much stayed out of prescribing data since 2006, when Reps. Frank Pallone (D-NJ) and Pete Stark (D-Calif.) introduced the “Prescription Privacy Protection Act.” The bill never got out of committee, and it hasn’t been reintroduced since.

But two well-known members of Congress— Senate Judiciary Committee Chairman Sen. Patrick Leahy (D-Vt.) and Rep. Edward Markey (D-Mass.) both spoke out against the Supreme Court decision, and Rep. Markey went so far as to introduce a resolution on the House floor condemning the opinion. “The Supreme Court tipped the scales of justice in favor of big drug companies at the expense of patients and their doctors,” Rep. Markey says in a press release.

Those statements got attention. “I never underestimate Rep. Markey,” says Wiley & Rein’s Kamp. “He’s a high-profile, well-liked liberal who would be a spokesman for these groups.” Rep. Markey’s office would not comment on whether he would pursue the issue, and the Senate Judiciary Committee would only say that it had “no immediate plans” to introduce legislation, but it did not rule it out.

Action at the federal level is clearly a long-shot for the foreseeable future. But despite the ruling in Sorrell vs. IMS Health, even the Supreme Court doesn’t have the power to end the controversy over the use of prescribing data.

Comments? Email the author at rpmreport@elsevier.com

Reprinted with permission from Elsevier. For a free trial of The RPM Report, or to subscribe, please contact Deanna Flanick at d.flanick@elsevier.com.