Magnus PI: Supreme Court Hears Data Mining Case

A dispute between Big Pharma and Vermont may impact legal precedent on information technology and privacy for years to come

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Big Pharma takes on little Vermont at the United States Supreme Court Tuesday morning in what ought to be a fascinating oral argument about the lucrative practice of corporate data mining for information about prescription drugs. In Sorrell v. IMS Health, the justices will determine under First Amendment law whether and to what extent a state may ban the use of "prescriber-identifiable data" (a.k.a "'PI') to market or promote those drugs to doctors. 

The closely-watched case will give the justices yet another opportunity (or excuse, depending upon your point of view) to explore the contours of free speech rights of corporations when those rights happen to collide with earnest legislative action. And no matter which way they vote, the justices will offer a trove of new talking points (and legal precedent) to everyone else who pays attention to this particular corner of the world of information technology.

The story begins in 2007 when Vermont's duly-elected representatives took a crack at 1) protecting the privacy rights of doctors; 2) restricting the dissemination of patient information, and; 3) encouraging the prescription of generic drugs. The state legislature passed a provision-- Section 17 of Act 80, to be exact-- to stop one particular kind of data mining that impact all three of those policy priorities. From the lower court's order:

When filling prescriptions, pharmacies in Vermont collect information including 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 this PI data to the data mining appellants.... These data mining companies, all located outside of Vermont, aggregate the data to reveal individual physician prescribing patterns and sell it outside of Vermont, primarily to pharmaceutical manufacturers.

The idea behind Section 17 was to restrict commercial access to the information pharmacists gather and then sell. In its "factual findings" in support of its measure, Vermont declared among other things that it wanted to try to correct the "massive imbalance" it was seeing "in the information provided to doctors and other prescribers" as a result of the data mining and subsequent use of information. The health care data miners immediately challenged the law. 

The federal trial judge who first looked at the case ruled Vermont's statute a permissible restriction on "commercial" speech rights. And the 1st U.S. Circuit of Court of Appeals, dealing with similar statutes in New Hampshire and Maine, has declared both of those efforts constitiutionally permissible. But last November, 13 months after hearing oral argument in the case, a divided (2-1) panel of the 2nd U.S. Circuit Court of Appeals struck down Section 17. 

The 2nd Circuit majority said that the provision was an impermissible restriction on first amendment rights because it was not "narrowly tailored" and did not "directly advance" Vermont's professed interest in regulating PI data. Because Vermont's statute "influenced" the supply of "truthful information" made commercially available to the data miners, the judges wrote, it required a heighentened level of judicial scrutiny which it could not withstand.

Presented by

Andrew Cohen is a contributing editor at The Atlantic. He is a legal analyst for 60 Minutes and CBS Radio News, a fellow at the Brennan Center for Justice, and Commentary Editor at The Marshall Project

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