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Thursday, April 28, 2011

Guest Blogger Leslie Francis: Supreme Court Hears Oral Argument in Sorrell

Francis-Leslie Sorrell v. IMS Health Inc. was argued before the U.S. Supreme Court on April 26th. The issue in the highly-publicized case is whether Vermont’s statute concerning the sale of provider-identifiable prescribing information is an unconstitutional limitation on speech.  Vermont’s Prescription Confidentiality Law, 18 Vt. Stat. Ann. § 4631 (2011), prohibits the sale of provider-identifying information to data miners for marketing purposes unless the provider opts in to the practice.   Vermont advanced three state interests in support of the statute:  protecting the privacy of physicians and indirectly of patients, reducing health care costs, and protecting patient safety. The Second Circuit, applying the Central Hudson test for commercial speech,  concluded that the statute did not further the state’s interests in a sufficiently direct manner.  This decision, Vermont claimed, failed to recognize the state’s very strong interest in protecting privacy, especially when the pharmacies are required by the state to collect the information in the first place.  In this regard, Vermont’s petition for certiorari implores, “the Second Circuit's decision invalidating Vermont's law calls into question the constitutionality of numerous federal and state laws that protect information privacy by restricting access to or use of private information.”

It should be noted that the First Circuit had upheld New Hampshire’s Prescription Information Law, which prohibited the transfer of prescription information containing provider-identifiable or patient-identifiable information for any commercial purpose, with limited exceptions, see N.H. RSA 318:47-f(2011),  IMS Health Inc. v. Ayotte, 550 F.3d 42 (Cir. 2008); and Maine’s prohibition on the sale of provider-identifiable prescription information regarding physicians who file for confidentiality protection, 22 M.R.S. 1711-E (2011), IMS Health Inc. v. Mills, 616 F.3d 7 (2010). 

A decision in the Sorrell case is, unsurprisingly, expected by the end of the Supreme Court’s term in late June or early July.  It is of course risky to predict how the Court will rule, so I will not.  (But four Justices appeared sympathetic to the view that the case was about defending commercial speech—Chief Justice Roberts, Justice Alito, Justice Kennedy, and Justice Scalia—and four asked questions that brought out strengths of the State’s argument, while noting limits as well—Justice Breyer, Justice Ginsburg, Justice Kagan, and Justice Sotomayor.  Justice Thomas was silent as is his wont during oral argument.) Those concerned with the implications of any decision for the privacy rights of patients or consumers—or for that matter health care providers—would do well, however, to pay attention to several themes in the oral argument.

First, there’s a difference between privacy and autonomy.  The State argued that the statute protects privacy by giving physicians control over certain uses of information about them.  Critical Justices did not see the statute in this way.  Instead, they pressed the concern that the statute aimed to make certain types of speech—marketing communications to physicians—more difficult.  Justice Kennedy asked whether physician-identifiable prescription information could be sold for research and was told by Bridget Asay, arguing the case for the State, that although it was not, it potentially could be (subject to other Vermont statutory restraints).  Chief Justice Roberts asked Thomas Goldstein (a sympathetic voice, as he was arguing for the respondents) whether the statute would permit data aggregators to sell provider-identifiable information to journalists interested in exposing physicians who prescribe a great deal of controversial medications, and was told that it would.   Petitioners were hard pressed to explain how the statute protects privacy when it requires an opt-in for one, but not for other, uses.  They replied by understanding privacy as autonomy in the sense of control over particular uses. Despite the analogy to HIPAA, which also singles out a group of opt-in uses, critical Justices seemed unconvinced.  (Careful readers will note that the value at issue here really is confidentiality—control over how information is shared—not privacy; and if the Justices had recognized this, they might have been more sympathetic to the view that some forms of control might be important to people when other forms are not.)

Second, opt-in is not opt-out.  Justice Sotomayor asked why a statutory design that allowed providers to opt-out of the commercial use of their identifiable prescribing information wouldn’t be less restrictive and serve the state’s interests equally well.  There seemed to be general agreement among all participants that opt-out mechanisms offered to consumers, such as “do not call” and, potentially, “do not track,” would be constitutional.  On this reasoning, the Court’s grant of cert. because of a conflict between the First and the Second Circuits would be somewhat misleading; the First Circuit upheld an opt-out statute (Maine’s) and a more general prohibition (New Hampshire’s), rather than Vermont’s targeted opt-in statute.

Third, more may be less. A number of the Justices were troubled by the statute’s targeting of a particular use of the information for the opt-in requirement.  Ironically, it may be that more general prohibitions on information sales (perhaps with limited exceptions as for certain research) would be constitutional, when opt-ins for certain uses are not.  Another strategy may be state laws concerning data ownership. Justice Ginsburg asked Edwin Kneedler, Deputy Solicitor General arguing as amicus for Vermont, who owns the data.  She was told that the data was in the possession of the pharmacy and that the state has recognized that the physician also has a stake in the information.  Presumably, states could do more to recognize property rights in data for both providers and their patients.

Fourth, there may be some real play for deceptive or unfair trade practice law in this area. Justice Breyer asked—just as a hypothetical—whether it would be constitutional for the FTC to (after appropriately studying the evidence) to determine that it was a deceptive trade practice to market drugs to physicians on the basis of information about their prior prescribing history, because this information is irrelevant to the safety and efficacy of the drug.  Mr. Goldstein was pressed to admit that the FTC, or Vermont, could prohibit “false” (but not “biased”) speech as a deceptive trade practice.

Fifth, bad reasons are worse than no reasons. Arguing for Vermont, Ms. Asay took particularly pointed questions about the state’s goals in enacting the statute.  During her rebuttal, she was pressed by Chief Justice Roberts to explain that the statutory finding that “does seem to say that the State is doing this because it doesn’t like an imbalance in the marketplace of ideas” was adopted in support of the statute in a different, more sweeping form.  In general, the Justices seemed more inclined to accept legislative findings in support of privacy (as they conceived of it) rather than Vermont’s asserted interests in reducing health care costs and promoting patient safety.  Justice Ginsburg, for example, asked why pursuing these goals isn’t really just “lowering the decibel level” of one speaker. 

Sixth, there may be more protection for data in the hands of the state than for data in private hands.  Vermont tried to make the argument that because the government required the information to be collected in order for prescriptions to be filled, this was an especially favorable case for regulation.  The Justices appeared unconvinced by the efforts to draw the analogy between state-required data collection, and state collection of data itself. 

Finally, I can’t resist noting two quite unpleasant features of the oral argument.  “Prescribers” were identified with physicians, although the statute specifically defines them as any “individual allowed by law to prescribe and administer prescription drugs in the course of professional practice.”  And physicians were always referred to with the male pronoun.

 

- Leslie Francis

 

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