Posted by Thomas Jeffry

The clash between privacy advocates and those companies who make millions of dollars collecting and selling data about pharmaceutical prescription patterns was perhaps inevitable. When the State of New Hampshire passed the Prescription Confidentiality Act last year, leading health information brokers were quick to challenge the law which prohibited prescription information records which contain identifiable data about a patient or prescriber from being transferred, licensed, sold, or used for most commercial purposes. The Act specifically precluded the use of prescriber-identifiable data for “physician detailing” used by pharmaceutical companies to track the prescribing-habits of physicians in order to target individual sales pitches to such physicians.

This past April, the federal District Court for New Hampshire struck down the new law holding that the Act was an unconstitutional restriction of the commercial speech rights of data brokers and pharmaceutical companies in violation of the First Amendment.   IMS v. Ayotte (2007 DNH 061 P, April 30, 2007). The New Hampshire Attorney General filed an appeal to the United States Court of Appeals for the First Circuit.

IMS Health joined by Wolters Kluwer Health, through its subsidiary Source Healthcare Analytics, Inc., and Verispan LLC last week filed two new lawsuits challenging similar laws enacted in Maine and Vermont that become effective January 1, 2008. (IMS Health v. Rowe, D. Me., No. 1:07-cv-00127-JAW, complaint filed August 29, 2007; IMS Health v. Sorrell, D. Vt., No. 2:07-cv-00188-wks, complaint filedAugust 29, 2007). The complaints allege that the Maine and Vermont laws violate the First and Fourteenth Amendments by “prohibiting the communication of lawfully-obtained, truthful, important information without directly advancing important or substantial government interests when alternatives that do not restrict speech are available to achieve the state’s objectives.”

The Electronic Privacy Information Center (EPIC) has a different perspective. In a amicus brief filed in the New Hampshire appeal, EPIC said that there were important state interests to uphold the Act: “[T]he privacy interest that undergirds the state’s interest in this statute is even greater than what the legislature recognized . . . there are important and distinct patient privacy interests to be considered in this case involving the transfer of ‘de-identified’ personal information, that may in practice be re-identified or, even if not, may still affect a cognizable privacy interest.”

This is “bet the farm” litigation for IMS Health and its co-plaintiffs who depend on the ability to cultivate prescription data from pharmacies and other sources to sell to pharmaceutical companies and others. They argue that the transparency afforded by access to such information is good for the health care system. In contrast, privacy advocates insist that the government’s interest in protecting the privacy of individuals whose de-identified information may nevertheless be attributable back to them trumps constitutional concerns over the protection of free speech.

Stay tuned to see how the scales of justice will tip in weighing these concerns.