The federal court (<a href="http://www.prescriptionproject.org/tools/solutions_resources/files/0040.pdf) upheld Vermont’s Pharmaceutical Data Mining Law as constitutional. According to the Vermont Attorney General:
The court found that the Vermont law reasonably regulates the information that data mining companies obtain from individual Vermonters’ prescription information. This data is then compiled and sold to pharmaceutical companies so that their salespeople can target individual physicians for the marketing and sale of new prescription drugs. The new law would allow physicians to protect the disclosure of this information for marketing purposes.
The Legislature’s goal in enacting the data mining law was to contain health costs by ensuring that physicians focused on generic alternatives where appropriate. The Court found that even a one percent change in prescribing practices could result in a two million dollar cost savings for Vermonters. The lawsuit alleged that the law violated the data mining companies and pharmaceutical companies right of free speech. The District Court soundly rejected that contention, finding instead that the law reasonably regulated commercial speech. Attorney General William H. Sorrell embraced the decision as a vindication of the Legislature’s courageous efforts to curb the mounting costs of health care in this state. “It is a testament to our Legislature and to the courage of this small state that we continue to lead the way on important public health issues.”
As we reported here, the Joint Committee on Health Care Financing held a hearing on March 26th that would ban pharmaceutical data mining on March 26th. The state has some important interests in banning this practice:
1. Protecting the privacy of patients and providers; and
2. Saving money
As the US District Court says in today’s decision: “Coincident with the phenomenon of ‘data mining,’ pharmaceutical industry spending on direct marketing has increased exponentially.” The pharmaceutical industry spends approximately $30 billion (that’s more than the state’s annual budget) a year to promote its drugs. It spends about half of that developing new drugs and treatments. Why does it spend this kind of money? Because it works. Data mining can boost overall drug profits 3 percentage points and sales of new-to-market drugs by 30%.
Pharmaceutical marketing works, in large part, because the detailers walk into doctors’ offices with the doctor’s profiles in hand to fine tune their message. Detailers rely on this information and find it critical to ‘making the sale’. The companies spend money now on marketing because it works and they get a good return on their investment. The ban on data mining will change that.
By banning data mining, we remove the ability of industry detailers to be so specific in their message. The sales detailers will be forced to be more generic and objective in the information they present to prescribers because they will no longer have access to data mined information. The result is that there will be less prescribing of new, costly drugs.
Vermont predicted at least a 1% savings as a result of this ban– huge money in a tight state budget year. How much do you think Massachusetts could save?
Georgia J. Maheras
