Judgment Day


In a 6-3 decision yesterday, the U.S. Supreme Court held in a case called Sorrell v. IMS Health that states may not prohibit the use of physician prescribing data for marketing purposes. The decision in this closely-watched case is seem as a strong win for all data publishers.

 

What's the background? Several states, including Vermont, passed laws prohibiting the use of physician prescribing data -- information on how many prescriptions doctors write for specific drugs -- for marketing purposes. That was a blow to the pharmaceutical industry, where this data is relied on heavily for deploying their field salespeople, called "detailers." It was an even bigger blow to data publishers such as IMS Health, who make a lot of money aggregating this data and selling it to the pharmaceutical industry, among others. No surprise: IMS Health sued, and with different courts deciding different ways, this case quickly made it to the U.S. Supreme Court

 

What was decided? Well, as noted, the Court came down in favor of IMS Health. What makes the decision interesting is that the Court saw this as a First Amendment, free speech issue. If I am boiling it down correctly, the Court said that IMS Health got the data legally, and the data are factual and accurate, so therefore, IMS Health can sell the data any way it wants, and government can't restrict how the data are used.

 

By the way -- both the Court and the lawyers involved refer to IMS Health and other data publishers as "data miners," but rest assured this case has nothing to do with web scraping. Further, this case has nothing to do with information relating to individuals; all the prescription data was "de-identified" as they like to say in healthcare, so it was all anonymous in terms of who the prescriptions were for. This is a case about purely commercial data.

 

So let's play lawyer -- What are the implications of this case? I'm still not clear how much the circumstances of the case influenced the Court's decision. That's because the Vermont legislation in particular was passed for the express purpose of making it harder for pharmaceutical companies to sell brand-name drugs to doctors, which pushes up healthcare costs. That's where a lot of the free speech issues come into play.

 

But the sense I get in the commentary I have seen so far from real lawyers is that this case is significant, and that it will be much harder for states to place restrictions on the sale and use of data for advertising and marketing purposes. Databases are now considered "speech" giving them strong First Amendment protections, and the rights of commercial speech generally have been further strengthened. And all this is generally good for data publishers in terms of both accessing and distributing data.

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