Pharmaceutical companies landed a big win in Vermont yesterday, after a three-judge panel for the U.S. Court of Appeals for the 2nd Circuit ruled that a Vermont law restricting the mining drug prescription data violates the First Amendment.
Three companies that mine information on the prescription patterns of physicians and sell the data to pharmaceutical companies sued the Green Mountain State over the law, which bans the use of prescriber-identifiable data for drug marketing unless the prescribing caregiver consents.
Vermont pharmacies collect information including the prescriber’s name and address; the name, dosage and quantity of the drug; the date and place the prescription is filled; and the patient’s age and gender. The law banned pharmacies from releasing the information on privacy grounds.
The plaintiffs, IMS Health Inc. (NYSE:RX), SDI and Source Healthcare Analytics, a division of Wolters Kluwer Health (AMS:WKL), argued that the law is a commercial free speech restriction, saying the data helps them monitor the safety of new drugs and study treatment outcomes. State officials argued that drug companies were using the medical data as a “covert marketing tool.”
Vermont has some of the nation’s most stringent rules on the marketing of medical devices and drugs. In June 2009, the state signed into law the nation’s most restrictive gift ban. The state’s rules imposed even more stringent rules than the famously strict regulations then newly enacted in Massachusetts. Both states restrict nearly all gifts to physicians, including meals. But unlike the Bay State, which requires public disclosure of all payments and gifts worth more than $50, Vermont’s rules call for full transparency for all gifts and payments to doctors by device makers and drug companies and bars free meals altogether.
Massachusetts this week released the first round of data on healthcare industry payments to physicians from filings by medical device, pharmaceutical, biotech and other healthcare companies mandated by the state’s gift ban law.