Appeals Court Reverses Decision on Prescription Privacy

When Cindy Rosenwald heard the news that the U.S. First Circuit Court of Appeals had ruled in the state’s favor, she started jumping up and down.

TAPE: I’m really thrilled about the decision...I think it’s, I think it’s great.

Rosenwald sponsored the first-in-the-nation legislation to restrict pharmaceutical companies ability to sell their drugs.

Before the law went affect, so-called data mining companies like IMS purchased prescriptions- without patient names- from drugstores.

Then Merck, Eli Lilly and others would purchase that information from IMS and SDI.

That allowed the drug reps to more effectively tailor their sales pitches.

Rosenwald says once the companies knew doctors’ prescribing habits, it was easy to influence them.

TAPE: I think the relationship between a physician and a patient is so private and so privileged, it has to be protected to the greatest extent possible.

Rosenwald and others think this law will improve healthcare beyond protecting privacy.

Psychiatrist Dr. Marc Sadowsky says patients should save money.

TAPE: if there is less marketing pressure to prescribe the newer medicines which are very expensive and often have much higher co-pays and not shown to be any better than the generic medicine, I think this is going to have a sig. affect on public health.

The state is also in a position to save money.

It purchases prescription drugs for prison inmates as well as people on Medicaid.

New Hampshire lawmakers efforts to keep costs in check is one reason the Court of Appeals sided with the state.

The ruling says that the U.S. District Court in Concord should have given deference to the Legislature for taking an innovative approach to a growing problem nationwide.

The District Court had ruled the law was unconstitutional because it violated pharmaceutical companies freedom of commercial speech.

The court wrote that pharmaceutical salespeople couldn’t have the same kinds of conversations with doctors, absent physician’s prescription habits.

But Assistant Attorney General Laura Lombardi says the appeals court focused on the so-called data-mining companies, not the drug reps.

TAPE: the data mining companies make millions of dollars each year gathering information about what drugs doctors are prescribing and they aggregate it and they sell it to the pharmaceutical companies.

American University Law Professor Sean Flynn- who filed a brief in support of the state law- says there’s nothing unusual about protecting certain consumer buying patterns.

TAPE: for instance the Driver Privacy Protection Act prohibits states or individual entities from selling information that you need in order to register your car or get a drivers license. The Video Privacy Protection Act prohibits video rental establishments from selling your movie rental preferences.

Officials for the various companies did not want to talk on the record.

But they did release a statement saying that the dissemination of prescriber-identifiable data is vital to improve the quality, efficiency and safety of our healthcare system.

The pharmaceutical’s industry group warned that the ruling makes it difficult for doctors to obtain accurate information about current medicines.

In 2000, pharmaceutical companies spent 4 billion dollars on so-called doctor detailing.

In the past, opponents to the state law have losing the ability to target doctors will only drive prescription drug costs up.

Representative Rosenwald doesn’t buy it.

TAPE: if you remember the text of the legislation, physician data can be used for marketing at the specialty and zip code level. So it really doesn’t interfere with efficiency of sales calls.

The data mining companies have said they are evaluating potential next steps.

The Attorney General’s Office believes there’s a very good chance the companies will appeal the case to the Supreme Court.

In the meantime, lawmakers in a handful of states have been waiting for this decision.

Now that the law has been upheld, supporters believe similar legislation will be introduced across the country.

For NHPR News, I’m DG.