Posts Tagged ‘detailers’
Data mining of prescription drug information is big business. Pharmaceutical manufacturers spend billions of dollars a year having their sales representatives make regular visits to prescribers nationwide. During these one-on-one visits, the representatives distribute up to $1 million worth of free product samples per year, along with branded promotional materials and pamphlets about the different conditions their particular products can be used to treat. They use data about that provider’s prescribing history to market more effectively. Every sales pitch can be tailored to what the sales rep, also known as a detailer, knows of the prescriber based on his prescribing history. Federal and state laws prohibit the use of patient-identifying data for marketing purposes in the name of privacy. But until very recently no law restricted the use of prescriber-identifying information for any purpose.
In 2008, the State of Maine adopted a statute that stated that “a carrier, pharmacy or prescription drug information intermediary…may not license, use, sell, transfer or exchange for value, for any marketing purpose, prescription drug information that identifies a prescriber who has filed for confidentiality protection.” The Maine law limits detailers’ access to an individual prescriber’s identifying data only if the prescriber has affirmatively registered with the relevant Maine licensing board for confidentiality protection. When a prescriber opts in, the relevant Maine licensing board must place the individual’s name on a list that is submitted monthly to the Maine Health Data Organization, an independent state executive agency. The statute is designed to protect only prescribers in the Maine health care systems. Only Maine prescribers can opt in, and even opted-in prescribers’ identifying data can be used for any purpose other than detailing.
A prescription drug information intermediary is a company that collects these vast amounts of identifying data about individual prescribers and aggregates the data into reports and databases for use when marketing pharmaceutical products. Violation of the statute is a violation of the Maine Unfair Trade Practices Act. The Maine Attorney General can enjoin the practice and levy civil penalties of $10,000 per violation.
Once pharmaceutical manufacturers obtain detailing-oriented databases and reports, they generate individualized reports for detailers, who then use individual prescribers’ data to target prescribers in Maine. In an effort to eliminate this type of sales pitch, Maine focused on the original transfer of the data for marketing purposes, rather than on a prohibition against a particular type of marketing speech.
The Maine statute was to become effective on January 1, 2008. Before its enforcement, the plaintiffs, all prescription drug data intermediaries, sued Maine’s Attorney General in the federal district court of Maine, claiming that the statute’s limitations on licensing, sale, use, transfer or exchange of Maine prescribers’ identifying data for a marketing purpose were unconstitutional limitations on protected speech under the First Amendment. They also claimed that the law regulates transactions outside of Maine in violation of the dormant Commerce Clause. On December 21, 2007, the district court granted plaintiffs a preliminary injunction and prohibited Maine from enforcing the statute based on the plaintiffs’ First Amendment claims.
In IMS Health, Inc., et al. v. Janet T. Mills, as Attorney General for the State of Maine (Aug. 4, 2010), available here http://tinyurl.com/2b9bnw9, the United States Court of Appeals for the First Circuit rejected the information intermediaries’ First Amendment challenge. It held that the statute regulates conduct, the sale of the data, not speech. It also held that, even if it regulates commercial speech, that regulation satisfies constitutional standards. The plaintiffs had also argued that the statute was unconstitutional under the “dormant Commerce Clause” if applied to their out-of-state use or sale of opted-in Maine prescribers’ identifying data. The First Circuit held that the statute does regulate prescription drug information intermediaries’ out-of-State use or sale of opted-in Maine prescribers’ data. But it held that the statute constitutionally reached the plaintiffs’ out-of-state transactions as a necessary incident of Maine’s strong interest in protecting opted-in Maine prescribers from unwanted solicitations, a policy that the court held Maine rationally believed would lower its health care costs. It also held that the regulation of prescription drug information intermediaries’ out-of-state use or sale of opted-in Maine prescribers’ identifying data is not a disproportionate burden on interstate commerce.
In November 2008, the Court of Appeals for the First Circuit upheld a similar but not identical New Hampshire statute in IMS Health Inc. et al. v. Ayotte available here http://tinyurl.com/2ccpyhs. The New Hampshire statute provides that records relative to prescription information containing patient-identifiable and prescriber-identifiable data shall not be licensed, transferred, used or sold by any pharmacy benefits manager, insurance company, electronic transmission intermediary, retail, mail order or internet pharmacy or other similar entity, for any commercial purpose, except for the limited purposes of pharmacy reimbursement; formulary compliance; care management; utilization and review by a healthcare provider, the patient’s insurance provider or the agent of either; healthcare research; or as otherwise provided by law. By its terms, the statute does not appear to apply to pharmaceutical manufacturers.
In the Ayotte case, the court dodged the most serious First Amendment argument by holding that the plaintiffs, the same information intermediaries as in the Maine case, had no standing to assert the First Amendment rights of third parties, i.e., the pharmaceutical manufacturers and their sales representatives or positions. They could not assert the right of detailers to use prescriber-identifiable information in communicating face-to-face with physicians, nor could they assert the rights of physicians to receive that information during such interactions.
The First Circuit held that what New Hampshire sought to regulate was conduct, not expression. “This case poses the relatively narrow question of whether the Prescription Information Law constitutionally may guard these plaintiffs (data miners) from aggregating, manipulating, and transferring data for one particular purpose only…” According to the First Circuit, the challenged portions of the statute principally regulate conduct, and to the extent that the challenged portions impinge at all upon speech, that speech is of scant societal value.
Although this holding could have ended the First Amendment analysis, the First Circuit also reached the same conclusion assuming that the acquisition, manipulation and sale of prescriber-identifiable data come within the compass of the First Amendment. “If speech at all, these transactions are commercial speech; that is, they at most embody ‘expression related solely to the economic interest of the speaker and its audience.’” Citing a 1980 U.S. Supreme Court case, Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, available here http://tinyurl.com/24eg2bg, the First Circuit noted that statutory regulation of commercial speech is constitutionally permissible only if the statute is enacted in the service of a substantial governmental interest, directly advances that interest and restricts speech no more than is necessary to further that interest.
The First Circuit restricted its analysis to New Hampshire’s governmental interest in containing costs. It discussed in some detail the State’s evidence showing that detailing increases the cost of prescription drugs. New Hampshire was the first State in the country to enact such a statute, so there were no hard data to confirm the assumptions that detailing increases costs. However, testimony by a Harvard professor and a report of the New Hampshire Medical Society sufficiently justified the State’s interest in that goal. “…[T]he District Court’s demand that the state prove that the substitution of generic drugs for brand-name drugs would not lead to higher net health care costs subjected the state to a level of scrutiny far more exacting than is required for commercial speech.”
This conclusion left the final First Amendment issue to be decided: whether the regulation was no more extensive than necessary to serve the State’s interest in cost containment. The plaintiffs suggested alternatives such as a ban on gifts between detailers and physicians, a campaign to educate physicians to prescribe generic drugs whenever possible and a retooling of New Hampshire’s Medicaid programs so that non-preferred drugs – such as expensive brand name drugs for which no bioequivalent generic substitutes exist – would only be dispensed upon a physician’s consultation with a pharmacist. The First Circuit rejected all of these alternatives as impractical and unlikely to achieve the State’s goal of cost containment.
The First Circuit then considered the dormant Commerce Clause issue. “The proper mode of analysis under this so-called single ‘dormant Commerce Clause’ depends upon the scope of the challenged statute. A law that purports to regulate conduct occurring wholly outside the enacting state ‘outstrips the limits of the enacting State’s constitutional authority and, therefore, is per se invalid.’” This is the weakest part of the court’s analysis. The Attorney General “… urged [the court] to interpret the law as governing only in-state transactions,” and the First Circuit agreed without examination. If that interpretation is correct, there is no dormant Commerce Clause issue. The statute applies primarily to New Hampshire based pharmacies, which are permitted to transfer data for reimbursement purposes, etc. Unless transferred to a New Hampshire PBM, billing intermediary or insurance company, the data end up outside New Hampshire. These data are then collected by data miners outside New Hampshire into reports and databases sold to pharmaceutical manufacturers outside New Hampshire. The manufacturers then send salesmen to New Hampshire physicians to market drugs using information about each physician’s prescribing patterns. This marketing does not appear to be prohibited by the New Hampshire statute. As long as the data miners physically stay out of New Hampshire, data may be routinely transferred to out-of-state facilities where they can then be aggregated and sold legally to others. This interpretation limits, if not guts, the effectiveness of the law. There was little discussion of the Attorney General’s contention that the act governs only transactions that take place within New Hampshire versus the plaintiffs’ (in my opinion more reasonable) contention that all of the conduct that the act purports to regulate occurs outside the State. Of course, it would be difficult for a federal district court to disagree with a state attorney general on an interpretation of a new state law. A dissenting judge held that he did not believe the court had an adequate foundation for evaluating the implications for the Commerce Clause analysis and he would remand the case to the District Court with instructions to address the Commerce Clause issue in the first instance.
The New Hampshire case is not very well reasoned and can be criticized in a number of ways. The New Hampshire Attorney General may have a difficult time enforcing the statute against detailers marketing in New Hampshire to New Hampshire prescribers. The plaintiffs petitioned the Supreme Court for certiorari, but that petition was denied.
The Maine statute was much more narrowly tailored and the case more clearly reasoned. When patients of an opted-in Maine prescriber fill their prescriptions, the pharmacy still collects the prescriber’s identifying data and may transfer them to a central data center outside the State of Maine as long as the pharmacy is doing so for one of the permitted purposes (formulary compliance, reimbursement, etc.). The law does not, by its terms, affect this transfer. But the statute does regulate transactions between those pharmacy data centers and prescription drug information intermediaries like the plaintiffs. It prohibits them from selling, transferring or licensing opted-in Maine prescribers’ identifying data for a marketing purpose. The statute does not explicitly limit detailers’ use of prescriber-identifying data, but the earlier stages of regulation are meant to prevent this information from getting to detailers for use in marketing.
So far there is no subsequent appellate history of this case, but the time to file a petition for a writ of certiorari has not yet expired. Given the denial in the New Hampshire case, it is unlikely that the Supreme Court would grant the writ. We will probably have to wait until a state outside the First Circuit enacts such a law, which law is then struck down on appeal in that circuit. Then there would be a conflict among the circuits for the Court to resolve.