Remember those statutes that some New England states adopted over the last few years (no, not those having to do with gay marriage) that prohibited pharmaceutical companies from using pharmacy prescription data – sold by data miners – for commercial purposes?  Well the Second Circuit just declared Vermont’s statute an unconstitutional restriction on commercial speech in IMS Health, Inc. v. Sorrell, Nos. 09-1913-cv(L), 09-2056-cv(CON), slip op. (2d Cir. Nov. 23, 2010).

In doing so, the Second Circuit created a direct circuit split on the issue with the First Circuit, which had earlier affirmed the constitutionality of similar statutes in New Hampshire and Maine. See IMS Health Inc. v. Ayotte, 550 F.3d 42 (1st Cir. 2008) (New Hampshire statute); IMS Health Inc. v. Mills, 616 F.3d 7 (1st Cir. 2010) (Maine statute). This issue could well go to the Supreme Court.

Vermont was quite explicit that its statute was intended to intervene in the informational marketplace in order to put a thumb on the scales against drug company’s marketing of brand name drugs.  It hoped that, by depriving brand name manufacturers of information that helped them identify which doctors were prescribing what drugs, it would make pharmaceutical detailing less effective.  Slip op. at 15-16, 21-22.  Having explicitly stated that the state’s intent to reduce the effectiveness of certain commercial speech, the legislature made it was hard for its lawyers later to attempt to pass off the statute as some sort of regulation of mere “conduct”.  Slip op. at 18-23.  Didn’t work.  The would-be censors couldn’t get their pretexts lined up in a row.

The Sorrell court left open the possibility that the regulation may well regulate non-commercial speech because it found that the restriction couldn’t even survive the intermediate scrutiny to which commercial speech restrictions are judged.  Slip op. at 28.  That would be a very interesting question if the commercial speech ruling was ever reversed, but for now it’s a footnote.

As with promotion of off-label use, we’re once again dealing with speech that is undeniably truthful.  The stats concerning physician prescription histories wouldn’t have any value if they were false.  That means there’s not much to say about part one of the hoary Central Hudson test, and the court didn’t.  Slip op. at 28.

On to “substantial interest.”  Vermont claimed three:  (1) protecting public health, (2) protecting prescribers’ privacy, and (3) reducing health care costs by reducing the sale of expensive brand name drugs.

Sorrell found that these restrictions were a bizarre way of protecting anyone’s privacy.  It only bans one of many uses of prescribing data and allows its collection.   If anybody wanted to, it would be perfectly legal under the statute for the New York Times to obtain and publish a story about “who’s prescribing what.”  Clearly a pretext.  Again, the would-be censors couldn’t line their pretexts up straight.  Slip op. at 29-31.  Further, the state’s speculation that pharmaceutical manufacturers use the prescribing data to intrude on the privacy of the physician-patient relationship was just that – rank speculation.  Slip op. at 31-32.

Vermont’s own expert was unaware of any instance in which a detailing interaction caused a doctor to prescribe an inappropriate medication. To the extent that the record might suggest PI data has damaged the relationship between doctors and patients, the evidence is either speculative or merely indicates that some doctors do not approve of detailing or the use of PI data in detailing.

Slip op. at 32.  We would go further.  We think this is another example of nanny-statism.  What’s really going on is the state trying – very indirectly – to reduce the amount of information doctors get from a particular source (pharmaceutical companies) for the paternalistic reason that they don’t trust doctors or patients to use the information wisely.  But that’s just us.

Actually, it isn’t just us.  Sorrell found the statute blatantly paternalistic, too.  Slip op. at 35-36.  It just waited until prong three to do it.  We sort of write these posts stream of consciousness, and sometimes get ahead of the court.  So be it.  We’re glad to have our instincts proven right.

On to the “directly advance” prong of Central Hudson.  Here’s where it really starts getting fun, because the state’s true motives start being exposed.  The state offered a real Tinker to Evers to Chance sort of justification.  How does preventing pharmaceutical companies from using prescribing information in their marketing save the state money in health care costs?  How does it protect public health?  As the court put it, the statute:

can advance the state interests in protecting public health and reducing health costs only by the following route: the statute prevents PI data from being transferred from data miners to pharmaceutical manufacturers for marketing purposes, who in turn are prevented from using the data in their marketing efforts. Failure to use PI data in marketing results in less effective marketing for brandname prescription drugs, some of which – although not all – are more expensive yet provide no therapeutic advantage over generic alternatives.  Less effective marketing will result in doctors writing fewer prescriptions for brand-name prescription drugs, thereby reducing health care costs and protecting public health by minimizing prescriptions for more expensive or less tested medications.  The state’s own explanation of how [the statute] advances its interests cannot be said to be direct.

Slip op. at 33-34.  The court noted that there is no case, anywhere, in which this indirect approach – achieving some public good indirectly by making some speaker’s speech less persuasive or effective – has been upheld.  Id. at 34.  In the court’s words “the statute seeks to alter the marketplace of ideas by taking out some truthful information that the state thinks could be used too effectively.”  Id. at 35.

Here the court does it’s riff on paternalism.  Vermont can’t restrict information, especially so indirectly, because it fears that doctors will be too greatly influenced by it.  Slip op. at 36.  Maybe Vermont could ban in-office detailing, maybe not, but it certainly couldn’t claim that it was preventing “harassment” of doctors by drug companies.  Id. at 37-38.  “Physicians . . . can always choose to decline to be visited by detailers, even without [the statute.”  Id. 38.

Again the state tripped all over its own pretexts.

The concept of reducing health costs by preventing physicians from getting overly persuasive information about brand name drugs was hopelessly indirect:

Because [the statute] is an attempt to influence the prescribing conduct of doctors by restricting the speech of others – namely data miners and pharmaceutical manufacturers – it does not directly advance the state’s interests in protecting public health and reducing health care costs.  Instead, the statute restricts protected speech when uttered for purposes the government does not approve of in order to reduce the effectiveness of marketing campaigns and, ultimately, alter the behavior of prescribers, who are not regulated by the statute.  This route is too indirect to survive intermediate scrutiny.

Slip op. at 38-39.  We note, with interest, that much of the same could be said about the FDA’s prohibition of truthful promotion of off-label uses on the basis of patient “safety.”

On to the final “more limited restriction” prong of Central Hudson.

The indirect means of pursuing the purported state interests necessarily entailed a blunderbuss approach to commercial speech.  (1) all brand name drugs are affected, even those with no cheaper generic competition; (2) all brand name drugs are affected, even those that aren’t supposedly “new” and with less of a safety track record.   Slip op. at 40.  The statute thus restricted way more speech than it’s justifications could justify.  Id. at 41.  And there were obvious non-speech alternatives available, such as favoring the prescription of generic drugs where available.  Id. at 42.

The statute’s categorical ban on speech that the state found unduly persuasive was not saved by a physician opt in option.  The ban itself, and thus the speech for which opt in was required, still went way beyond anything that could be supported by the cost or safety justifications offered by the state.  Slip op. at 44.

In closing, the court also points out that “the statute restricts speech even with regard to prescriptions of breakthrough brand-name medications for which there are no generic alternatives.  Slip op. at 46.

At this point we would argue (although the court does not), that the statute could affirmatively harm public health in pursuit of it’s goal of reducing brand name prescriptions.  Detailing – because it is backed by commercial as well as altruistic interests – is particularly effective in getting the the news out to doctors about such “breakthrough” products.  And “breakthrough” products save lives, that’s why they’re called “breakthrough.”

Basically, we see the whole public health justification as pretextual.  The state’s just trying to save medical costs by reducing prescriptions – even if those prescriptions actually help patients (which the overwhelming majority do).

Anyway, good riddance to a bad statute.  And, possibly, hello to the Supreme Court getting another chance to review governmental speech restrictions on pharmaceutical detailing.

Can the off-label promotion ban be far behind?