On January 7, 2010, the U.S. Supreme Court granted the petition for writ of certiorari filed by the State of Vermont seeking to overturn the decision from the Second Circuit which held that Vermont’s prescription confidentiality law was unconstitutional.
The section of the Vermont law at issue in the appeal, codified at 18 V.S.A. § 4631, prohibits the sale, license, or exchange for value of prescriber-identifiable data for marketing or promoting a prescription drug unless the prescriber consents. The Vermont legislature passed the law in 2007, intending to protect public health, to protect prescriber privacy, and to reduce health care costs.
The law was challenged by companies, commonly referred to as “data miners,” which purchase information regarding prescriptions from pharmacies, 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. The data miners aggregate this information and sell it to pharmaceutical research and manufacturing companies to assist in their marketing efforts to prescribing physicians. The law was also challenged by the Pharmaceutical Research and Manufacturers of America.
The Second Circuit overturned the district court’s decision, 631 F. Supp. 2d 434 (D. Vt. 2009), upholding the Vermont law as a constitutional restriction of commercial speech. The Second Circuit determined that the Vermont law did not pass intermediate scrutiny under Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980) because the Vermont law did not “advance the state’s interests in public health and reducing costs in a direct and material way” and there were less speech-restrictive means which Vermont could have used.
The Second Circuit’s decision created a split with the First Circuit, which had previously upheld similar laws from New Hampshire (IMS Health Inc. v. Ayotte, 550 F.3d 42 (2008)) and Maine (IMS Health Inc. v. Mills, 616 F.3d 7 (2010)).
According to a statement from Vermont Attorney General, the case, Sorrell v. IMS Health Inc., No. 10-779, will likely be argued in April of this year and decided before the end of the Court’s term in June.