Vermont upholds commercial data ban

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Vermont stiffens gift ban, disclosure policy
Vermont stiffens gift ban, disclosure policy

A federal court in Vermont quashed the efforts of several marketing research firms to overturn a statewide ban that restricts the use of prescriber-identifiable (PI) data. 


The ban, which prohibits companies from “selling or using PI data for marketing or promoting prescription drugs unless the prescriber consents [by opting-in],” is scheduled to become effective in Vermont on July 1, 2009.


Cathy Betz, vice president, government affairs at Wolters Kluwer Health, said the company is “currently evaluating its legal options, which may include an appeal of Judge Murtha's decision with the Second Circuit Court of Appeals, as well as seek an injunction against the law's implementation…pending the appeal review.”


Unlike IMS Health vs. Ayotte in New Hampshire, the Vermont decision (here, in pdf) does view PI data as commercial speech protected under the First Amendment. However, the court upheld the “opt-in” provision – the meat of the ban – citing an allowance for the restriction of commercial information if it supports a substantial government interest; directly advances the asserted interest; and is not more extensive than is necessary to serve that interest.


Accordingly, the court recognized two substantial government interests according to the decision: “The law is sustainable on [Vermont's] cost containment and public health interests, which are substantial.”


The court's suggestion that the use of PI data, dubbed “data-mining,” facilitates increased drug costs through direct marketing of branded drugs and not cheaper generics or bioequivalents was disputed by Betz. “There is no evidence – empirical or otherwise – that the specific use of PI information for commercial purposes increases healthcare costs,” said Betz. “Likewise, assertions that these data are used to influence physicians to prescribe only more expensive brand name drugs are unfounded,” she said, citing the steady growth of the generics market since 2005.


The Vermont case involved IMS Health; Verispan; Source Healthcare Analytics (a subsidiary of Wolters Kluwer Health) and PhRMA, all of whom filed suit against the ban when it was passed by the state Legislature last year.


In March, IMS Health and SDI filed a petition asking the Supreme Court to review the IMS Health vs. Ayotte decision in New Hampshire. In April, Wolters Kluwer Health filed a friend-of-the-court brief with the US Supreme Court concurring with IMS and SDI's request for a review, according to Betz.

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