Sorrell v. IMS Health Inc.

564 U.S. 552, 131 S. Ct. 2653, 180 L. Ed. 2d 544, 22 Fla. L. Weekly Fed. S 1246, 2011 U.S. LEXIS 4794, 67 A.L.R. 6th 755, 79 U.S.L.W. 4591
Supreme Court of the United States·Decided June 23, 2011·No. No. 10-779·Published·Cited by 501 cases

Opinions

OPINION OF THE COURT

[564 U.S. 557]

Justice Kennedy

delivered the opinion of the Court.

Vermont law restricts the sale, disclosure, and use of pharmacy records that reveal the prescribing practices of individual doctors. Vt. Stat. Ann., Tit. 18, § 4631 (Supp. 2010). Subject to certain exceptions, the information may not be sold, disclosed by pharmacies for marketing purposes, or used for marketing by pharmaceutical manufacturers. Vermont argues that [551]*551its prohibitions safeguard medical privacy and diminish the likelihood that marketing will lead to prescription decisions not in the best interests of patients or the State. It can be assumed that these interests are significant. Speech in aid of pharmaceutical marketing, however, is a form of expression protected by the Free Speech Clause of the First Amendment. As a consequence, Vermont’s statute must be subjected to heightened judicial scrutiny. The law cannot satisfy that standard.

I

A

Pharmaceutical manufacturers promote their drugs to doctors through a process called “detailing.” This often involves

[564 U.S. 558]

a scheduled visit to a doctor’s office to persuade the doctor to prescribe a particular pharmaceutical. Detailers bring drug samples as well as medical studies that explain the “details” and potential advantages of various prescription drugs. Interested physicians listen, ask questions, and receive followup data. Salespersons can be more effective when they know the background and purchasing preferences of their clientele, and pharmaceutical salespersons are no exception. Knowledge of a physician’s prescription practices—called “pre-scriber-identifying information”—enables a detailer better to ascertain which doctors are likely to be interested in a particular drug and how best to present a particular sales message. Detailing is an expensive undertaking, so pharmaceutical companies most often use it to promote high-profit brand-name drugs protected by patent. Once a brand-name drug’s patent expires, less expensive bio-equivalent generic alternatives are manufactured and sold.

Pharmacies, as a matter of business routine and federal law, receive prescriber-identifying information when processing prescriptions. See 21 U.S.C. § 353(b); see also Vt. Bd. of Pharmacy Admin. Rule 9.1 (2009); Rule 9.2. Many pharmacies sell this information to “data miners,” firms that analyze prescriber-identifying information and produce reports on prescriber behavior. Data miners lease these reports to pharmaceutical manufacturers subject to nondisclosure agreements. Detailers, who represent the manufacturers, then use the reports to refine their marketing tactics and increase sales.

In 2007, Vermont enacted the Prescription Confidentiality Law. The measure is also referred to as Act 80. It has several components. The central provision of the present case is § 4631(d).

“A health insurer, a self-insured employer, an electronic transmission intermediary, a pharmacy, or other similar entity shall not sell, license, or exchange for value regulated records containing prescriber-identifiable information, nor permit the use of regulated
[564 U.S. 559]
records containing prescriber-identifiable information for marketing or promoting a prescription drug, unless the pre-scriber consents .... Pharmaceutical manufacturers and pharmaceutical marketers shall not use prescriber-identifiable information for marketing or promoting a prescription drug unless the prescriber consents . . . .”

The quoted provision has three component parts. The provision begins by prohibiting pharmacies, health insurers, and similar entities from selling prescriber-identifying information, absent the prescriber’s consent. The [552]*552parties here dispute whether this clause applies to all sales or only to sales for marketing. The provision then goes on to prohibit pharmacies, health insurers, and similar entities from allowing prescriber-identifying information to be used for marketing, unless the prescriber consents. This prohibition in effect bars pharmacies from disclosing the information for marketing purposes. Finally, the provision’s second sentence bars pharmaceutical manufacturers and pharmaceutical marketers from using prescriber-identifying information for marketing, again absent the prescriber’s consent. The Vermont attorney general may pursue civil remedies against violators. § 4631(f).

Separate statutory provisions elaborate the scope of the prohibitions set out in § 4631(d). “Marketing” is defined to include “advertising, promotion, or any activity” that is “used to influence sales or the market share of a prescription drug.” § 4631(b)(5). Section 4631(c)(1) further provides that Vermont’s Department of Health must allow “a prescriber to give consent for his or her identifying information to be used for the purposes” identified in § 4631(d). Finally, the Act’s prohibitions on sale, disclosure, and use are subject to a list of exceptions. For example, prescriber-identifying information may be disseminated or used for “health care research”; to enforce “compliance” with health insurance formularies

[564 U.S. 560]

or preferred drug lists; for “care management educational communications provided to” patients on such matters as “treatment options”; for law enforcement operations; and for purposes “otherwise provided by law.” § 4631(e).

Act 80 also authorized funds for an “evidence-based prescription drug education program” designed to provide doctors and others with “information and education on the therapeutic and cost-effective utilization of prescription drugs.” § 4622(a)(1). An express aim of the program is to advise prescribers “about commonly used brand-name drugs for which the patent has expired” or will soon expire. § 4622(a)(2). Similar efforts to promote the use of generic pharmaceuticals are sometimes referred to as “counter-detailing.” App. 211; see also IMS Health Inc. v. Ayotte, 550 F.3d 42, 91 (CA1 2008) (Lipez, J., concurring and dissenting). The counterdetailer’s recommended substitute may be an older, less expensive drug and not a bioequivalent of the brand-name drug the physician might otherwise prescribe. Like the pharmaceutical manufacturers whose efforts they hope to resist, counterdetailers in some States use prescriber-identifying information to increase their effectiveness. States themselves may supply the prescriber-identifying information used in these programs. See App. 313; id., at 375 (“[W]e use the data given to us by the State of Pennsylvania ... to figure out which physicians to talk to”); see also id., at 427-429 (Director of the Office of Vermont Health Access explaining that the office collects prescriber-identifying information but “does not at this point in time have a counter-detailing or detailing effort”). As first enacted, Act 80 also required detailers to provide information about alternative treatment options. The Vermont Legislature, however, later repealed that provision. 2008 Vt. Laws No. 89, § 3.

Act 80 was accompanied by legislative findings. 2007 Vt. Laws No. 80, § 1. Vermont found, for example, that the “goals of marketing programs are of[553]*553ten in conflict with the

[564 U.S. 561]

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Sorrell v. IMS Health Inc., 564 U.S. 552, 131 S. Ct. 2653, 180 L. Ed. 2d 544, 22 Fla. L. Weekly Fed. S 1246, 2011 U.S. LEXIS 4794, 67 A.L.R. 6th 755, 79 U.S.L.W. 4591 (2011).

564 U.S. 552 (Sorrell v. IMS Health Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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