PharmExec Blog

Commercial Use of Physician Information Law Overturned

The ruling is likely to force state legislatures considering such bans to reconsider or fine tune their approach, as the First Amendment right to communicate appears to have trumped more parochial concerns about saving money on drugs.

The US Court of Appeals for the Second Circuit recently ruled that a Vermont law restricting the commercial use of data relating to physician prescribing patterns is unconstitutional. Judge John G. Koeltl wrote the majority opinion overturning an April 2009 US District Court decision, concluding the Vermont law “is a commercial speech restriction that does not directly advance the substantial state interests asserted by Vermont.”

The federal appeals court ruled in favor of IMS Health, SDI, and Source Healthcare Analytics, three health information companies that jointly filed a lawsuit seeking to prevent Vermont from enforcing the state law enacted in July 2009.

Vermont and other states in favor of laws restricting the use of prescription data believe, according to John Kamp, executive director of the Coalition for Healthcare Communication, that with limited knowledge about which brand-name drugs are selling, physicians will more often prescribe cheaper generic drugs, thus saving states money on medications for Medicare patients. “The theory from the states’ point of view is that ignorant doctors prescribe cheaper drugs than doctors educated by a commercial sales force,” says Kamp. According to the Coalition for Healthcare Communication and others who oppose such laws, this ban on sharing such data violates the First Amendment.

“We are very pleased with today’s decision. Patients will benefit from a more transparent, safer, and more competitive healthcare system as a result of this ruling,” said Harvey Ashman, IMS senior vice president and general counsel. “These types of laws do nothing to advance public health and in fact pose a risk to patients by arbitrarily delaying information on new medicine or warnings on existing medicines.”

While more than 100 similar bills have been introduced in state legislatures across the country, only three have been passed into law and none since 2007 when Vermont and Maine joined New Hampshire as the only three states to do so.

The three companies that brought the suit and others affirm that commercial access to physician prescribing patterns has great public health value. That particular information is used for a wide variety of purposes, including to study prescribing trends, monitor the safety of new medications, support safety-oriented risk management programs, prevent prescription drug abuse, expedite drug recalls, recruit for clinical trials, and study treatment variability and outcomes.

“These laws are bad public policy,” says Kamp. “They put a premium on ignorance of doctors. And, the laws violate the First Amendment rights of companies to tell the truth about their product.”

To read the full Second Circuit Court of Appeals decision, click here.

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