The U.S. Supreme Court appeared split on Tuesday as it considered a case testing state limits on data mining. At issue is whether states can bar the buying, selling and profiling of a doctor's prescription records without the physician's consent.
Government regulations require pharmacies to keep records of all doctors' prescriptions. In most states, pharmacies can and do sell these records to data mining companies -— companies that in turn sell the information to drugmakers for use in targeted sales pitches to doctors.
When doctors in Vermont found out their prescription records were being sold this way, they went to the state Legislature, and the state enacted a law barring the practice.
The data miners and the pharmaceutical industry challenged the law in court. They contend it is unconstitutional because it makes it more difficult for drugmakers to identify doctors who would be good prospects for sales.
But Vermont contends the law constitutionally allows doctors to decide for themselves whether information about their prescription habits can be sold to data miners.
Conservative Justices Skeptical
Vermont Assistant Attorney General Bridget Asay told the justices on Tuesday that law does not discriminate. Insurers and the state, as Medicaid manager, get prescription information directly from doctors and patients in order to pay for the drugs. In contrast, she said, pharmacies sell the information to data miners for drug marketing.
But Asay faced a pummeling from the court's conservative justices.
Chief Justice John Roberts began by asking whether the "purpose" of the law isn't really "to prevent sales representatives from contacting particular physicians."
Asay said no, that "the purpose of the statute is to let doctors decide whether sales representatives will have access to this inside information" about physicians' prescribing habits.
To that, Justice Antonin Scalia replied, "Let's not quibble." The purpose of the law is to make the drug companies' marketing efforts "less effective."
Nor did Scalia buy the argument that the law is aimed at protecting doctor privacy. All the doctor has to do is refuse to talk to the drug representatives when they come calling, he said.
The Constitution allows limits on the effectiveness of speech, Asay replied. Drug companies could speak more effectively if they had access to patient information or to their competitors' trade secrets, but the law bars them from having access to that information.
Justice Sonia Sotomayor followed up on Justice Scalia's suggestion that doctors don't have a real privacy interest in their prescription information. "Assuming there's some form of privacy that relates to not being harassed," she asked, wouldn't it be better if the doctor were required to opt out of having his information sold? "Isn't an opt-out less restrictive?"
Asay responded that the state law is in fact an opt-out process because it asks a doctor to make a decision one way or the other on the form he fills out every two years for relicensing. In completing the form, the doctor checks off a box agreeing to have his prescription information disseminated, or not.
Justice Ruth Bader Ginsburg observed that the state does seek to promote the sale of less expensive generic drugs in place of more expensive brand names. That prompted Chief Justice Roberts to make his own observation: The state, he said, wants to lower health care costs "not by direct regulation but by restricting the flow of information to the doctors," and "censoring what they can hear."
But Asay responded that the statute does not limit any of the information that doctors receive. "The issue in this case is whether [the drug companies'] right trumps the right of the doctor," she said.
An Unconstitutional Law?
The federal government's lawyer, Deputy Solicitor General Edwin Kneedler, picked up that thread in his argument supporting the state.
He noted that pharmacies only have doctors' prescription information because the federal and state governments require them to have it. The patient's privacy is protected by federal law, he observed, and this law merely puts the doctor "on an equal footing" with the pharmacy in determining how the doctor's information is used in marketing.
The law is not an "all or nothing" statute, Kneedler said. Rather, "it's very much like a 'do not call' statute or a 'do not mail' statute."
Making the contrary argument was lawyer Tom Goldstein, representing the data mining and pharmaceutical industries. He told the court that the Vermont law unconstitutionally singles out pharmaceutical marketing.
Justice Sotomayor was skeptical. "Today with the Internet and with computers, there's virtually no privacy individuals have. Any transaction you do could be spread across the world instantaneously," she said. So if the state legitimately has an interest "in protecting that part of the public who says ... 'I didn't really want you to sell my name,' " why can't the state allow you to take steps to protect individual privacy?
It can, replied lawyer Goldstein. But he added that this statute was not intended to protect privacy, and he said it denies doctors important and truthful information about drugs. "What you can't do is have a rule that says one side is going to have a much harder time getting to their audience," Goldstein said, and that is what Vermont did here.
If this law is unconstitutional, and you really are concerned about physician privacy, wondered Chief Justice Roberts, how could you write a statute to avoid a constitutional problem? Goldstein answered that the statute would have to bar pharmacies from giving prescription information to anyone.
Justice Elena Kagan followed up: How about a bar on selling this information to anyone?
A ban on selling the information would not be constitutional, replied Goldstein, because it would protect against commercialization but not privacy. "We have a capitalist economy," he said, and "commercialization isn't a bad thing."
Chief Justice Roberts noted that the government frequently controls the use of information it requires. He asked, for example, how Vermont's law was any different from one barring a tax accountant from selling the information he has acquired to prepare a tax return.
Goldstein said that the government can bar tax preparers from giving out information to anyone, but it cannot bar tax preparers from giving out information just to certain people. "That's the main principle of our case," he said.
If the argument looked at first like a blowout victory for the industry, by the end of the day, the justices seemed to find the issues a bit trickier to resolve.