Law Limiting Sale of Customer Prescription Data Overturned by Supreme Court - Sorrell v. IMS Health
The U.S. Supreme Court examined a Vermont law that limited the use of patient information collected by pharmacies to determine whether or not 18 V.S.A. § 4631 violated pharmacies' First Amendment rights. The Supreme Court held that the Vermont law did place unnecessary limits on the speech of pharmaceutical companies and had failed to justify these limits within the law itself. Therefore, the Court found Vermont's Confidentiality of Prescription Information statute to be unconstitutional as it currently stands in Sorrell v. IMS Health, No. 10-779.
The Vermont law at issue, 18 V.S.A. § 4631, sought to limit pharmacies from selling their client's demographic information to pharmaceutical companies. Basically, whenever a patient fills a prescription at a pharmacy, information on that patient is generated. The pharmacy then sells that information to "data miners," who compile the data into coherent reports, which are then sold to pharmaceutical manufacturers. The drug companies then use this data for "detailing", a process through which they promote their medications to doctors in the hopes of increasing the sale and use of their drug.
The goal of §4631 was to limit the practice of detailing by eliminating the role of the data miners; under the law, pharmacies were no longer able to sell patients' information to data miners. The law sought to limit the commercial use of patient information and its sale to pharmaceutical companies. However, it did allow this information to be used in other ways, e.g., for medical research purposes. In fact, it was this arbitrary divide of what was allowed and what was not that led to the Supreme Court's ruling in Sorrell.
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