Freedom of Information

IMS and Verispan sue New Hampshire to buy prescriber data—and to protect the data sellers' free-speech rights.
Sep 01, 2006

The long-running battle over sales reps' use of prescribing data escalated sharply this summer. New Hampshire passed the Prescription Restraint Law, which makes it illegal to sell or license prescription data that identifies the prescribing doctor, to keep the data away from pharma. Then IMS and Verispan, the companies that buy the data, sued the state, alleging among other claims that the law violates the free-speech rights of data sellers—from pharmaceutical benefits managers to retailers and Internet pharmacies. The issue isn't marketing, the suit says, but sellers' First-Amendment right to convey the "truthful information" they own.

The case did not have a court date at press time. But for now, the two sides are waging a war of words. Supporters of the New Hampshire statute claim that sales reps from pharmaceutical companies use prescriber data to pressure doctors to prescribe their products—drugs that might be more expensive than the ones patients are using. "These practices continue to increase the bottom line of the pharmaceutical companies," says John Stephen, commissioner of New Hampshire's health department, adding that when drug reps pressure physicians to prescribe more expensive drugs, taxpayers bear the cost. "The only benefit is the benefit to the manufacturers' pocketbooks," he said.

IMS and Verispan do not dispute that many of their clients—pharmaceutical companies—deploy sales teams based on where a drug is (and is not) being prescribed. But they argue that nothing in the New Hampshire law guarantees that restricting access to such data will lower drug prices.

What it may do is shift the way pharma markets drugs, and not necessarily for the better, argues Randall Stafford, MD, an assistant professor of medicine at the Stanford Prevention Research Center. Companies that are prohibited from using prescribing data as a sales tool are likely to simply shift dollars to other marketing activities, such as direct-to-consumer (DTC) advertising. "There's certainly ample evidence that physician selection of drugs doesn't correspond to best practices, [but] there are better ways of addressing these concerns," says Stafford, who often uses prescriber-level data in his research, which IMS provides free of charge to many academics. "I actually believe that greater restrictions on DTC advertising ... is a better choice of public policy as opposed to restricting physician-level information," Stafford says.

"It's a Constitutional Right!"

Whether or not the law affects drug prices, IMS and Verispan say it violates the free-speech rights of their data suppliers—PBMs, managed care organizations, and pharmacies. These organizations, according to the suit filed against state Attorney General Kelly Ayotte in US District Court in Concord, have a constitutional right to aggregate and sell prescribing information. The Prescription Restraint Law is "indirectly imposing restrictions on the dissemination of truthful information," the suit states. "The State should not be permitted to achieve indirectly by suppression of constitutionally protected speech what it is prohibited from regulating directly," i.e., the cost of drugs or physician–sales rep interactions.

Moreover, IMS and Verispan argue that data sharing in and of itself is not a marketing activity. Rather than "proposing a commercial transaction," the suit states, the pharmacists, PBMs, and insurers "are conveying truthful information that lawfully is in their possession." The suit goes on to draw a comparison to the newspaper industry: Even though publications profit from disseminating information, the information in question isn't commercial.

"The New Hampshire bill prohibits the speaking of something that's lawful," says Fred Cate, a senior policy advisor at the Center for Information Policy Leadership. The center is affiliated with Hunton & Williams, the law firm representing IMS and Verispan. "That's a first in the nation."

Cate, an attorney who is not working on the case, notes that states are free to regulate marketing activities—such as gifts to doctors—and even drug prices. But he questions the constitutionality of curbing speech to accomplish those objectives.

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