May 11, 2012 — In the wake of the June 2011 U.S. Supreme Court decision in IMS v. Sorrell, which stated that a Vermont law violated the First Amendment because it restricted the sale of prescription drug data for commercial marketing purposes, the New Hampshire legislature recently amended a similar law on its books by striking “references to prohibitions on disseminating ‘prescriber-identifiable data’” and bolstering patient confidentiality protections, according to an article posted May
10 on Pharmalot.com.
The article quotes industry attorney Arnie Friede, who said: “The scope of the new law is not clear, how it would work in practice is not clear, whether in practice it would allow legitimate health care and insurance operations to be undertaken and completed properly while still retaining the apparent objective of the new law … is unclear.”
To read more, go to: http://www.pharmalot.com/2012/05/a-state-grapples-with-the-infamous-data-mining-case/
By John Kamp, Coalition for Healthcare Communication Executive Director
Sept. 13, 2011 — Debates over health care and related marketing costs are certain to arise as the Congress and White House struggle to reduce the deficit, stimulate the economy and prepare for the upcoming elections. Meanwhile, the IMS Supreme Court decision is causing a stir in industry and in the courts.
Here are four things you need to know:
1. The IMS Supreme Court decision already is shaking up pending court cases involving FDA and HHS-IG enforcement of medical marketing regulations. As you know, the IMS decision undermines FDA’s ability to ban truthful information by drug companies on off-label uses of drugs. Industry and First Amendment lawyers are closely watching the federal Second Circuit Court of Appeals, a court immediately under the Supreme Court. The IMS case has become central to the appeal of Alfred Caronia, a drug representative being charged by the United States with the crime of including off-label information in sales presentations. In a decision expected soon, the appellate court could agree with Caronia’s lawyers that uttering truthful off-label information cannot be made a crime. Several parties filed special comments based on the IMS decision (see Caronia Amicus Brief). One of the most important of these came from the Medical Information Working Group (MIWG), a coalition of seven medical product manufacturers who recently filed the attached Citizen Petition with FDA asking for clearer off-label regulations. Together, the Supreme Court decision, the MIWG Citizen Petition, and the upcoming U.S. v. Caronia decision could lead to dramatic changes in medical marketing regulation and enforcement. I will be moderating a panel on these developments at the Sept. 23 FDLI meeting (see FDLI Marketing Conference Agenda). The panel includes Harvey Ashman, General Counsel of IMS, Diane Bieri, General Counsel of PhRMA, and Bert Rein of the Wiley Rein law firm, who served as lead counsel in the Washington Legal Foundation case.
2. The deficit super committee is gearing up and quickly must come up with significant budget cuts or tax increases. While industry fared relatively well in last year’s Affordable Care Act, new money must be found and no income source will be overlooked. Indeed, the Advertising Coalition members were not surprised recently when a group targeted the medicines industry even before the committee’s first meeting. The recommendation came from the Pharmaceutical Care Management Association (PCMA), representing PBMs. PCMA sent the attached letter directly to the leaders of the deficit super committee with several suggestions for saving money by suppressing the use of branded drugs, including elimination of the tax deduction for DTC advertising. The Ad Coalition is working with industry groups, including PhRMA and media associations, to address this and other possible proposals.
3. Congressional action on health care marketing issues most likely will arise as part of PDUFA V, the appropriations bill that must pass by October 2012 to enable funding of the FDA. The FDA draft of that legislation has been in the works for more than a year and is about to be sent to Congress. The current draft includes several modifications to FDA approval processes, including new fees for devices and generics, but no proposals for additional marketing rules. Knowing this, a coalition of consumer groups made a last-minute plea to HHS Secretary Kathleen Sebelius to include more marketing restrictions. We don’t expect HHS to agree, but know that the consumer groups will press for these changes on Capitol Hill this year and next. You will be hearing much more about PDUFA V before the bill becomes law.
4. As we wait for Sunshine provisions of the Affordable Care Act to be announced by HHS this month (http://www.cohealthcom.org/2011/03/28/coalition-stakeholders-weigh-in-during-cms-%e2%80%9csunshine-act%e2%80%9d-call/), we not only are seeing the media future in the age of transparency but are getting much better prepared to handle the media spotlight. Last week, ProPublica and local media outlets filed their second wave of stories publishing data on individual doctors who have received payments for working with us and our medical clients. Although many local news outlets picked up the ProPublica material, reporters often contacted the industry and doctor groups, which worked aggressively to provide background and additional context to the stories. The industry owes special thanks for this to both PhRMA and the Association of Clinical Researchers and Educators (ACRE) (http://www.cohealthcom.org/2011/09/08/propublica-reporters-urged-to-provide-context-and-meaning-to-payment-disclosures/).
And, as always, stay tuned.
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
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.
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Reprinted with permission from Elsevier. For a free trial of The RPM Report, or to subscribe, please contact Deanna Flanick at firstname.lastname@example.org.
By John Kamp, Executive Director, Coalition for Healthcare Communication
July 18, 2011 — For those who have not read the entire June 23 Sorrell v. IMS Health Inc. Supreme Court decision (No. 10-779), here is a quick summary of what happened and what drug marketing executives need to know.
Top line, the Supreme Court majority not only affirmed the commercial speech rights of pharmaceutical companies to buy and use prescription data for marketing, it also protected the rights of data companies to compile, analyze, publish and sell those data in the increasingly data-driven digital environment.
The Supreme Court also appears to have raised First Amendment scrutiny applied to government restrictions on virtually all truthful marketing activities. Indeed, the Court applied “heightened scrutiny” in this case, apparently expanding the traditional protections for “commercial speech” under the Central Hudson test used for the past 20 years. Moreover, the 6-3 decision logically applies to all marketing, not just medical marketing, strengthening our alliances with consumer marketers and media, including digital media.
For those not familiar with the case, IMS and others challenged a Vermont ban on the marketing use of prescriber data by drug companies. At the same time, Vermont had allowed these data to be used for “counter-detailing” by insurers, managed care and the state. The Supreme Court said Vermont illegally limited speech because it did not like the speaker nor the message and especially because the marketing was effective, i.e., presumably increasing prescription rates for branded drugs.
Vermont said the rules were designed to save money by increasing the use of generic drugs and to protect doctor privacy by protecting them from unwanted sales tactics. The Court said there were non-speech ways to save money and that the protection of doctor privacy was nominal given that others could use the data in marketing.
The Court’s decision may strengthen significantly the position of the Coalition and our industry partners in Washington as we resist legislation and rules banning or restricting marketing. Indeed, the Supreme Court decision calls into question many of the FDA’s restrictions on truthful company speech, especially truthful “off-label” statements by drug sponsors. Drug marketing remains the most prominent heavily regulated topic in advertising, but has not been routinely subject to rigorous regulator restraint or judicial scrutiny. That could change.
Supreme Court Decision Highlights:
(1) Government restrictions based on commercial content and industry speakers were subjected to “heightened” First Amendment scrutiny, much like that traditionally applied to political or so-called “pure speech.” The only clear difference apparent in this decision between “pure speech” and commercial speech that is false or misleading commercial speech is not protected by the First Amendment.
(2) Data and data analytics are also treated as speech protected by the First Amendment. This includes data companies of all types, plus publishers and users of these data.
(3) Marketing restrictions and marketing bans were treated similarly, limiting indirect as well as direct restrictions on marketing communications and making it harder for law makers and regulators to suppress or ban marketing one restriction at a time.
(4) Government attempts to save money and to protect individual privacy remain potent reasons to regulate speech, but governments cannot just assert these as justifications. Applying traditional First Amendment rules for “pure speech” as well as commercial speech, the Court reasserted that governments must ensure that such rules are narrowly written to avoid burdening speech, and must achieve the legitimate purposes of the law. Additionally, governments must first consider and use non-speech restrictions when possible.
(5) FDA lawyers must be concerned about the continued viability of many of its marketing polices, especially restrictions on truthful “off-label” communications by drug sponsors. Although industry seldom challenges these restrictions, a group of companies recently filed a Citizen’s Petition seeking “clarity” on these rules. This could be a significant step forward. Watch this Website for more background and analysis on this Petition.
(6) Narrow restrictions based on drug safety, such as REMS requirements, were not at issue here. Although subject to First Amendment scrutiny, legitimate safety restrictions are less likely to fail.
As a result of this Supreme Court decision, clients, publishers and agencies are in a much better position today to oppose restrictions on marketing and marketing analytics when imposed by all governments, including states, the Congress, the FTC and the FDA.
This case also underlines the value of medical industry alliances with consumer marketers and media publishers, as well as with vendors and other allies. The broad language in this decision arguably applies to all marketers and supports our joint activities with a wide range of allies, including the AAAA, the Internet Advertising Bureau, the Ad Coalition, the Digital Advertising Alliance and the new Digital Health Coalition.
Moreover, the decision enables us to use the First Amendment to defend innovative and effective marketing of all types, including in the digital space where data and data analytics promise to power effective and efficient messaging. While we still must respect reasonable expectations of privacy, the decision will help us resist proposals for broad versions of “Do Not Track” and other limits on digital professional and consumer communication.
However, it is important to remember that opponents of medical marketing are undaunted, very well funded, and remain darlings of the press. These groups will be visible, litigious and smart. Although we had our day and court and won, related policy and legal challenges battles will arise soon.
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.
May 27, 2011 — As Congress considers six pieces of pending legislation introduced to protect consumers’ privacy online – all but one of which recommends mandatory “Do Not Track” provisions – the Senate Committee on Commerce, Science & Transportation last week held a hearing to discuss whether Do Not Track also should be expanded to mobile device marketing.
“I think anyone who uses a mobile device has an expectation of privacy, and sadly that expectation is not always being met,” Committee Chairman Sen. John D. “Jay” Rockefeller IV (D-W. Va.) said in a statement. “As smart phones become more powerful, more personal information is being concentrated in one place. These devices are not really phones—they are miniature computers.”
Testifying before the Committee, David C. Vladeck, director of the Federal Trade Commission’s Bureau of Consumer Protection, said that mobile device applications and ads that allow for the collection of consumer information “need to provide meaningful disclosure in a small screen environment” to prevent the invisible collection and sharing of consumer data with multiple partners.
Vladeck commended Rockefeller and fellow committee member Sen. John Kerry (D-Mass.) for the two consumer privacy bills they have introduced. “Although the [FTC] has not taken a position on whether to recommend legislation in this area, the Commission strongly supports the goals of Sen. Rockefeller’s Do Not Track legislation and supports the approach laid out in that bill,” Vladeck said. Kerry’s bill does not call for a Do Not Track mechanism.
He added that the Commission “is committed to protecting consumers in the mobile sphere through law enforcement and by working with industry and consumer groups to develop workable solutions that protect consumers while allowing innovation.”
Acknowledging that industry is trying to self-regulate online behavioral advertising both online and in mobile device marketing, Vladeck indicated that the adoption of self-regulation has been rather slow. “Until advertisers agree to be bound by [self-regulation] – actually signing up and making this happen – I think the business community knows that at some point, sooner or later, there will be a Do Not Track requirement,” he told the Senate Committee.
“Whether we are conducting marketing activities online or through mobile device apps, industry must get its act together and begin self-regulation – quickly and in large numbers – if we are going to mandatory Do Not Track regulation,” said Coalition for Healthcare Communication Executive Director John Kamp. “We can’t ‘wait and see’ any longer – the time to get on board is now.”
The Coalition opposes mandatory Do Not Track provisions and believes that consumer privacy and robust Internet commerce is better served by self-regulation (www.AboutAds.com) that enables easy consumer opt-outs of unwanted tracking and marketing.
May 17, 2011 — Widespread industry participation in online behavioral advertising (OBA) self-regulation is the only way for the program to succeed and for advertisers to stave off federal regulation of behavioral marketing practices, according to Dick O’Brien, head of the 4A’s Washington office and moderator of an OBA educational Webinar for ad agencies.
“Do it now,” said John Kamp, executive director of the Coalition for Healthcare Communication. “Agencies, publishers and medical companies must get on board today to make the self-regulation program work. If this program is not widespread and visible soon, Washington will mandate a ‘do-not-track’ program that will be a disaster for us, our clients and the public.”
The 4A’s Webinar, “A Complete ‘How-To’ Guide for Ad Agencies Implementing the New Industry Online Behavioral Advertising Program,” features presentations from John Montgomery, COO, GroupM; Josh Berman, director, Trading Strategy, GroupM; and Lee Peeler, president, National Advertising Review Council, Better Business Bureau. [View the free Webinar and learn more about OBA self-regulation at: http://www.aaaa.org/events/webinars/media/Pages/051011_dc_behavioral.aspx]
The Webinar speakers explain the genesis of the AboutAds.com program and why it is so important for agencies and clients to participate now. They also cover the core principles of the program, who is covered, program icon implementation, entities’ roles and responsibilities, approved providers to assist companies, and program costs.
“The core of this sound, robust program is transparency and choice,” O’Brien said. “To keep government legislation away,” more entities must sign on for program implementation, he asserted.
May 13, 2011 – In the span of one week, two new bills calling for “Do Not Track” provisions were introduced in Congress, increasing the pressure on lawmakers to address the various versions of Do Not Track legislation that have been introduced during the past few months.
On May 9, Sen. John D. “Jay” Rockefeller IV (D-W. Va.), Chairman of the Senate Committee on Commerce, Science, and Transportation, introduced the “Do-Not-Track Online Act of 2011,” a bill that is designed to empower consumers to opt out of having their activities tracked online. This bill calls for a mandatory browser-based Do Not Track mechanism and would set time limits regarding how long a company could keep any data that is collected online.
“Recent reports of privacy invasions have made it imperative that we do more to put consumers in the driver’s seat when it comes to their personal information,” Rockefeller said in introducing the bill. “I believe consumers have a right to decide whether their information can be collected and used online. This bill offers a simple, straightforward way for people to stop companies from tracking their movements online.”
House Co-chairmen of the Bi-Partisan Congressional Privacy Caucus Rep. Edward J. Markey (D-Mass.) and Rep. Joe Barton (R-Texas) also introduced a bill on May 6 that amends the Children’s Online Privacy Act of 1998 to “extend, enhance and update the provisions relating to the collection, use and disclosure of children’s personal information and establishes new protections for personal information of children and teens,” according to a press release.
The “Do Not Track Kids Act of 2011” aims to protect children on the Internet, which is “their new 21st century playground,” Markey said. It calls for parental consent of the collection of children’s information and would establish a “digital marketing bill of right for teens.”
These two bills join four other privacy bills introduced previously by Sen. John Kerry (D-Mass.)/Sen. John McCain (R-Ariz.), Rep. Cliff Stearns (R-Fla.), Rep. Jackie Speier (D-Calif.), and Rep. Bobby L. Rush (D-Ill.). Of these bills, the Kerry/McCain bill is the only privacy legislation that does not call for a Do Not Track mechanism.
The Coalition for Healthcare Communication opposes mandatory Do Not Track provisions and believes that consumer privacy and robust Internet commerce is better served by self-regulation that enables easy consumer opt-outs of unwanted tracking and marketing. As such, the Kerry/McCain bill is the most palatable to industry “because it recognizes the value of self-regulation,” said John Kamp, the Coalition’s executive director. “We want to be able to move forward to protect consumers in a more collaborative way,” he added.
June 23, 2011 — Justices find Vermont violated First Amendment rights of pharma and data publishers
Sweeping aside justifications by the state of Vermont and privacy advocates, the United States Supreme Court today found the Vermont ban on marketing use of Rx data a violation of the First Amendment.
” This is a victory for patients as well as industry, ” said John Kamp, Executive Director of the Coalition for Healthcare Communication. “Although couched in language of privacy and cost reduction, the Vermont bill was a transparent attempt to censor industry while allowing others to talk. Enlightened public policy makers have always known that was a bad idea. Now they know it is also unconstitutional.”
April 20, 2011 — On Tuesday, April 26, the U.S. Supreme Court hears oral arguments in a case – Sorrell v. IMS Health Inc. – that could be a game changer for data gathering companies, the pharmaceutical and biotechnology industries, advertising agencies, medical publishers and other media. The Supreme Court will decide whether the First Amendment protects the collection and marketing use of physician prescribing practices.
“Victory or loss in this case will depend largely on how the majority of Justices construe the question,” said John Kamp, executive director of the Coalition for Healthcare Communication, which filed one of 16 amicus curiae briefs in support of IMS Health. “Listen carefully to the questions by the Justices. The tenor and direction of the Justices’ questions during oral arguments will give clues to the decision, which is expected in June.”
In Kamp’s view, medical marketers have a First Amendment right to use legally collected data and data analytics to communicate with the appropriate doctors and patients using targeted messages and media. If IMS loses because the Court considers these activities unworthy of First Amendment protections, “the assaults on data gathering and use in marketing will proliferate,” Kamp commented. “The ensuing legal actions will not just be about IMS data, but all marketing uses of data, which would be a huge blow.”
Focus of Court’s Questions?
“If the Justices ask whether the Vermont ban restricts the First Amendment right of pharma companies to speak about their products, I think we’ll win,” Kamp said. “The restriction is egregious because it allows the government and managed care companies to detail using the data, but bans industry from using the same data in a similar manner,” he noted.
For example, Wolters Kluwer Pharma Solutions and similar analytical companies, as well as pharmaceutical companies, need this information in order to identify and reach the prescribers who will value information about new therapies, according to Cathy Betz, vice president, Government Affairs, Wolters Kluwer.
“What the case is not about is privacy,” said Betz. “The data that is being restricted (physician prescribing information) is stripped of patient identity and patient identifiers (as required by federal law) before we ever receive it from our suppliers. We also utilize security protections by implementing appropriate administrative, technical and physical safeguards to further protect this anonymous information,” she noted.
“Every court to consider the question has therefore recognized that patient privacy is not at issue in these cases. This law also does nothing to establish a physician privacy right in their professional practice information because it allows wide dissemination of prescriber history information to many people for many purposes,” Betz said.
However, if the Justices “decide that the question is whether or not IMS can gather and sell prescription data that in turn can be sold to pharma for marketing purposes, we may lose,” Kamp stated. “The Court has never found data gathering and use, per se, as a First Amendment-protected activity. Our brief and others argue that this activity should be protected because it informs marketing, but this could be a stretch for the Justices.”
Of course, handicapping results based on oral arguments is a very risky proposition, according to Christopher A. Mohr, an attorney with Meyer, Klipper & Mohr PLLC, and counsel of record for the amicus brief filed by the Coalition, American Business Media, The Consumer Data Industry Association, CoreLogic, The National Association of Professional Background Screeners, and Reed Elsevier Inc.
In the brief, these entities urge the Supreme Court to adopt a Court of Appeals for the Second Circuit decision that invalidated the Vermont law on the ground that it violated the First Amendment by banning the voluntary exchange of truthful information on a matter of public importance. The Coalition and its co-filers argue selective bans on data use is “wrong and constitutes a dangerous threat to First Amendment values,” and that the “compilation, aggregation and distribution of the content of informational databases is entitled to First Amendment protection.”
“If the First Amendment means anything, it means that government regulation of speech is a last resort and the government may do so in a way that is tailored to the interests it is trying to advance,” Mohr said, adding that in a related case involving the same plaintiffs (which technically is not before the Court), the Court of Appeals for the First Circuit “rejected that basic constitutional maxim and held that when information is gathered for commercial purposes and treated like a commodity, the state may regulate it just like ‘beef jerky.’
“The state and its amici are urging the [Supreme] Court to adopt the First Circuit’s view,” Mohr continued. “Such a holding is unprecedented and radical.”
Court Decision’s Implications
Henry Horbaczewski, general counsel, Reed Elsevier, agreed with Mohr’s assessment. “From my perspective, this case is about whether government can regulate information like beef jerky rather than as speech, and, in particular, whether government can regulate conduct by denying persons access to information needed to make informed decisions,” Horbaczewski said.
Mohr also asserted that there is another troubling aspect to this case. “Facts are the building blocks of discourse. In this case, Vermont has decided that those facts enable face-to-face sales presentations between drug sales reps and doctors that are truthful, but ‘too good,’” he said. “Rather than ban unethical practices (e.g., kickbacks, etc.) the state has attempted to cut off the flow of information to an industry to ‘dumb down’ these conversations … Vermont has legitimate, even compelling interests in reducing health care costs, but it has chosen a very dangerous, almost sinister means to accomplish its ends,” he concluded.
“If Vermont prevails, this decision could have implications for the free flow of information in our society, threatening numerous industries and companies that collect, analyze, and sell truthful information vital to the public,” according to Betz. “The very real fear among other companies and industries engaged in this type of business is that government can choose to restrict information flow whenever it decides it doesn’t like the outcomes in the marketplace that are being produced with the help of the information and insight,” she asserted.
The Coalition will continue to monitor ongoing developments in this case.