Ruling on Prescriber Data Law Creates Circuit Split

In 2007, Vermont passed a controversial new law known as section 17, banning the sale of prescriber-identifiable data (PI data) for marketing or promoting prescription drugs.

Pharmacies in Vermont and other states collect PI data when filling prescriptions. The information includes 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. Pharmacies sell PI data to data-mining companies, which aggregate it and strip it of patient information. The data miners sell the data mostly to pharmaceutical manufacturers, which use the trends revealed in the data to tailor their marketing to doctors.

Preventing Paternalism

For a variety of reasons, the court was unconvinced by Vermont's stated motives of protecting privacy, lowering health care costs and improving public health. In its analysis, the judges used the test outlined by the Supreme Court in Central Hudson Gas & Electric v. Public Service Commission, which states that the government may only regulate truthful commercial speech when restriction directly advances the state's interest.

A Definitive Opinion

Resolving the split between Sorrell and the 1st Circuit's IMS Health v. Ayotte has national implications because many organizations use PI data for marketing or otherwise. Other states have introduced legislation that would restrict its use.

Assistant Editor

Christopher Danzig

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.