Rx policy watchers and pharmaceutical industry executives alike are anxiously awaiting a 1st Circuit Federal Court of Appeals decision that could determine the fate of state legislative efforts to ban the use of physician prescribing information for marketing purposes (also known as “prescription data mining”). Most involved in the suit (Ayotte vs. IMS), which was precipitated by the industry’s challenge to New Hampshire’s 2006 first-in-the-country data mining law, anticipated a court decision this past summer. But it was not to be – leaving states’ efforts to put an end to the pharmaceutical marketing practice hanging in the balance.

In light of the Court’s any-day-now decision, we offer a refresher on the topic as well as our take on potential reverberations from the impending ruling.

At issue is whether states can prohibit pharmaceutical companies from using consumer’s prescription information for marketing purposes. In lawsuits against the three states that have passed data-mining bills, the industry argues that such prohibitions violate their right to free speech. However, as the New Hampshire attorney general’s office and law proponents argue, the law does not prevent companies from speaking to their customers about their products, which is protected speech. It simply prohibits companies from monitoring consumers’ health information to tailor and gauge the success of their sales pitches, which is unrelated to speech.

In addition, states have a clear interest in regulating data-mining because the practice drives up health care costs for the state and its residents (by increasing unnecessary prescribing of the most expensive drugs) and threatens quality of care (by interfering with prescribing decisions). (For more nitty gritty on the legal arguments, read this excellent analysis from Prescription Project consultant Sean Flynn, an American University Law professor and lawyer for the public interest amici in the appeal).

The court ruling could have the effect of ratcheting up or down state legislative activity on data mining, a controversial issues that’s gotten a lot of ink over the past year. In addition to bills considered this session in Massachusetts, bills have also been introduced in Washington, Hawaii, Maryland, Nevada, New York and the District of Columbia. In August, the Massachusetts House tacked a data mining proposal on to its version of the gift ban legislation, signaling a strong interest in the issue.

What’s the rub?

Indeed, passage of more state data mining bans would remove a major weapon in Big Pharma’s marketing arsenal. Use of consumers’ prescription data is central to their efforts to craft sales pitches and it drives the gravy train of other marketing practices such as gifts and offers of speaking engagements. Sales reps come into doctor’s offices armed with hand-held devices that contain detailed information about what physicians have prescribed and how often, charts and graphs. The importance of this tool is marketing is signaled by the all-out lobbying efforts in Massachusetts and Washington to defeat data mining ban legislation.

On the flip side, a Court decision to uphold the New Hampshire court ruling will likely put a crimp in efforts to pass ban legislation in other states, sending lawmakers back to the drawing board to find other ways to restrict this pernicious practice. And regardless of where the court comes down, there’s a good chance the U.S. Supreme may be the final arbiter on this issue. Stay tuned…
Kathy Melley, Prescription Project