Supreme Court Says Vermont Law Restricting Prescribing Data Is Unconstitutional

WASHINGTON, D.C. - (Mealey's) Vermont's law restricting the sale of doctors' drug-prescribing information to data miners for use in marketing drugs to doctors is an unconstitutional, impermissible restriction on free speech content and on speakers with which the state disagrees, the U.S. Supreme Court ruled June 23 in a 6-3 decision (William H. Sorrell, et al. v. IMS Health, Inc., et al., No. 10-779, U.S. Sup.).

Vermont's law (Prescription Confidentiality Law, Vermont Statutes Annotated, Title 18, Section 4631[d]) prohibits pharmacies from selling information about doctors and the drugs they prescribe to data miners unless the doctors consent.  Data-mining companies IMS Health Inc., Verispan LLC and Source Healthcare Analytics Inc. sued Vermont in the U.S. District Court for the District of Vermont. 

The District Court held that the law was not unconstitutional.  The data miners appealed, and a divided panel of the Second Circuit U.S. Court of Appeals held that the law is an unconstitutional restriction on speech.  Vermont appealed to the Supreme Court on the question of whether the law is an unconstitutional restriction on commercial speech. 

Justice Anthony M. Kennedy, writing for Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Clarence Thomas, Samuel A. Alito Jr. and Sonia Sotomayor, said that in considering how to protect personal privacy and dignity, "the State cannot engage in content-based discrimination to advance its own side of a debate." 

"If Vermont's statute provided that prescriber-identifying information could not be sold or disclosed except in narrow circumstances then the State might have a stronger position," Justice Kennedy wrote.  "Here, however, the State gives possessors of the information broad discretion and wide latitude in disclosing the information, while at the same time restricting the information's use by some speakers and for some purposes, even while the State itself can use the information to counter the speech it seeks to suppress." 

"Privacy is a concept too integral to the person and a right too essential to freedom to allow its manipulation to support just those ideas the government prefers," he continued.  "The State has burdened a form of protected expression that it found too persuasive.  At the same time, the State has left unburdened those speakers whose messages are in accord with its own views. This the State cannot do."  

Justice Stephen G. Breyer dissented and was joined by Justices Ruth Bader Ginsburg and Elena Kagan.  Justice Breyer said the Vermont law "affects expression in one, and only one, way.  It deprives pharmaceutical and data-mining companies of data, collected pursuant to the government's regulatory mandate, that could help pharmaceutical companies create better sales messages." 

"In my view," the justice said, "this effect on expression is inextricably related to a lawful governmental effort to regulate a commercial enterprise.  The First Amendment does not require courts to apply a special 'heightened' standard of review when reviewing such an effort." 

[Editor's Note:  Full coverage will be in the July 7 issue of Mealey's Emerging Drugs & Devices.  In the meantime, the opinion is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #28-110707-009Z.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.] 

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