Wednesday, May 23, 2007

Data Mining, Pharmaceutical Style

Tuesday’s Washington Post had an interesting article discussing a recent decision by U.S. District Judge Paul Barbadoro involving a New Hampshire statute designed to limit the ability of the pharmaceutical industry to obtain information regarding the actions of prescribing physicians. According to the article, drugmakers contract with data-mining companies to obtain information from retail pharmacies allowing the pharmaceutical companies to determine which physicians are issuing prescriptions for their products and, perhaps even more importantly, for competing products. Although the identities of individual patients are protected, the identities of the individual prescribing physicians are revealed to the drug manufacturers, who then use this information to more precisely target their marketing efforts at those individual physicians. Some doctors object to the use of this information on privacy grounds, while others charge that “using such detailed data for drug marketing serves mainly to influence physicians to prescribe more expensive medicines, not necessarily to provide the best treatment.” Judge Barbadoro held the statute to be an unlawful restriction on constitutionally protected commercial speech.

 A quick computer search reveals the case to be IMS Health Inc. v. Ayotte, ___ F. Supp. 2d ___, 2007 WL 1244077 (D. N.H. April 30, 2007). The court described the statute as “expressly prohibit[ing] the transmission or use of both patient-identifiable data and prescriber-identifiable data for certain commercial uses.” Rejecting the state’s arguments that the statute was a permissible restriction on commercial speech that was “carefully crafted to directly serve the State’s substantial interests in protecting prescriber privacy, promoting public health, and controlling health care costs,” the court held that the statute imposed an unlawful restriction on constitutionally protected commercial speech.

This would be a straight constitutional law case of little or no interest to property profs were it not for the court’s brief mention of testimony by a government official that “commercial use of this information violates prescribers’ ‘trade secrets.’” The defendant State official waived this argument, however, so the question of whether such data are (or could be) intellectual property protected from public disclosure as trade secret information remains undecided.

It is essential to the data-miners’ business plan that the information they gather and transmit is the property of the individual pharmacy and that the pharmacies are free to sell this information to the data-miners and, ultimately, to the drugmakers. Even if the argument that this information is instead the intellectual property of the prescribing physicians may not have been tenable under the current state of New Hampshire property law, a matter not decided in IMS Health, it is interesting to speculate about the effect of a state (or perhaps federal) statute declaring (with prospective effect, to avoid Takings problems) that henceforth ownership of information regarding prescriptions filled within the relevant jurisdiction would rest with the prescribing doctor, who would be free to reveal or withhold it as he or she saw fit. Would such a statute avoid the Free Speech issue on which New Hampshire’s statute foundered without running afoul of some other constitutional hazard?

Carl Christensen
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