The state of New Hampshire will appeal a federal court decision striking down a 2006 state law that bars data-miners from using patients prescription drug information to directly market pharmaceuticals to physicians.
The April 30 ruling from U.S. District Judge Paul Barbadoro in Concord, N.H., said the law is a violation of constitutional guarantees of free speechan argument put forth by two plaintiffs, data-miners Verispan, Yardley, Pa., and IMS Health, Norwalk, Conn.
At issue in the case is the sale of prescription data information by drugstores to data-miners, who in turn sell it to drug companies after refining the data. Drug companies use the data to arm their sales representatives when they pitch their drugs to doctors, a practice known in the industry as detailing.
The case has been closely watched by privacy advocates and legislators in other states since New Hampshire was the first to pass, but definitely not the last to consider, legislation to curb the multibillion-dollar healthcare data-mining industry from using the practice.
New Hampshire officials said the ruling will prove hurtful for residents and physicians. The state has a substantial interest in protecting the privacy of New Hampshire physicians, defending the sanctity of the doctor-patient relationship and reducing healthcare costs, said Attorney General Kelly Ayotte in a written statement released May 3. Healthcare costs in the state of New Hampshire are skyrocketing. The Prescription Information Law protects the states interests and the interests of New Hampshires physicians and citizens, which strongly outweigh the pharmaceutical industrys interest in increased profits.
But Barbadoro wrote in his 53-page decision that the New Hampshire Prescription Information Law restricts constitutionally protected speech without directly serving the states substantial interests, and because alternatives exist that would achieve the states interests as well or better without restricting speech, the law cannot be enforced to the extent that it purports to restrict the transfer or use of prescriber-identifiable data.
Barbadoro said that the law attempts to address important public policy concerns, and that, Ordinarily, states should be given wide latitude to choose among rational alternatives when they act to benefit the public interest. Nevertheless, Barbadoro concluded, when states choose remedies that restrict speech, courts must subject their efforts to closer scrutiny. As such, Barbadoro granted the petition for an injunction sought by Verispan and IMS Health, which had sued the state less than a month after the law went into effect last June.
The plaintiffs predict further success in the appeal of the case to the 1st U.S. Circuit Court of Appeals. In an e-mailed statement, IMS Health said: We are confident the opinion will be upheld by the 1st Circuit. The judges ruling in this matter is comprehensive, well-reasoned and based solidly on existing law. Importantly, it upholds the countrys tradition of protecting free speech and the free flow of truthful information. We continue to believe that patients will benefit from a more transparent, safer and more competitive healthcare system as a result of the judges decision.
A host of pharmaceutical interests and healthcare IT booster groups filed friend of the court briefs on behalf of IMS Health and Verispan, including data-miner Wolters Kluwer Health; the National Association of Chain Drug Stores, a trade group; SureScripts, a for-profit developer of e-prescribing infrastructure; the not-for-profit National Alliance for Health Information Technology, whose board of directors includes representatives from drugmaker Eli Lilly and Co. and giant pharmaceutical wholesalers Cardinal Health and McKesson Corp.; and the not-for-profit eHealth Initiative, whose affiliated Foundation for eHealth Initiative works under several federal contracts to promote health IT.
The New Hampshire court decision may have little or no impact on legislators in at least 13 other states that have similar laws pending, said Karmen Hanson, a senior policy specialist at the National Conference of State Legislatures.
Richard Head, the New Hampshire senior assistant attorney general who argued the states case before Judge Barbadoro, said the state first argued that the transfer of prescription data was not speech, and that even if it were, it was not protected, given that there exists a lower standard for commercial speech than private speech.
The law provides exceptions to allow data-miners to analyze sales information and to provide for public health research, Head said. The exceptions were well-articulated and what was covered and wasnt covered by the statute was fairly clear, he added.
Our primary argument was that the transmission of data was not speech, Head said. There is no transmission of an idea that is subject to constitutional protection. The court obviously rejected that. Our backup argument was that it was commercial speech and the judgment of a legislative body deserves deference in a court.
Head said the state did not dispute the plaintiffs contention that the data they were using was de-identified as to the patient, but argued there still was a breach of confidentiality.
Head said the appeal will be straightforward. The process is to file with the District Court and that gets forwarded to the 1st Circuit Court of Appeals in Boston. Well file briefs probably in a couple of months.