Supreme Court Takes On Information Privacy, Data Mining

It’s not common knowledge, but pharmacies often sell prescription records to pharmaceutical companies for use in marketing. Information about the patients picking up the prescriptions is protected by federal law, but information about which doctors prescribe which drugs is not, and in 2007 the Vermont state government enacted a law that prohibited pharmaceutical companies from buying prescription records from pharmacies for use in “detailing,” or marketing directly to doctors based in their prescription history.

Today in the Supreme Court, data mining companies argued that the Vermont law violates their rights under the First Amendment of the Constitution. Because the information is already available to insurers, and because the Vermont law does not prohibit disclosure or sale of the records to academic researchers, the companies argue that the doctors had already given up their privacy.

At least one Justice agreed with them. Justice Antonin Scalia is always an advocate of strong First Amendment rights, and he vociferously pushed the view that the law’s real purpose was to keep marketers away from doctors. Further he argued that doctors already had the power to simply tell marketers to “go away,” and that power threatened no one’s First Amendment rights.

Other Justices, most notably Sonia Sotomayor, the Court’s second-newest member, were more open to Vermont’s argument that it was proper to give doctors some control over what happened to prescription information after it left their pads. Doctors had asked the state for this restriction, Vermont’s lawyer argued, and it gave them the choice of opting in to allowing disclosure if they wanted.

The biggest hurdle for Vermont, though, is probably the unequal application of the law: while pharmaceutical companies cannot use the information for marketing, the state government and insurance companies are allowed to use the information to promote the use of generic drugs instead of brand-names.

The law also still allows pharmacies to give away the information for free instead of selling it.

Justice Sotomayor and others hinted that a rewritten law, applying equally to the state government, might pass constitutional muster, and even the lawyer for the pharmaceutical companies was willing to consider it, though such a concession would not be binding on them in a future challenge.

In addition to the law directly before them today, the Justices were also considering a possible change in the way privacy rights are seen under American law. While American jurisprudence looks at privacy as a right that is given up as soon as a piece of information is made public—so control of the information rests in the hands of whoever has the information—many European courts have recognized an ongoing privacy interest on the part of the person who is the subject of the information. Under that view, the patients and doctors would have some say in how the prescription records are used and disclosed even after the prescription is filled.

Vermont stated that as part of their argument today, and a few of the Justices seemed to consider it. If the Court decides to address the broader issue of privacy rights, rather than limiting their ruling to Vermont’s focus on pharmaceutical companies, it could have widespread effects on privacy laws across the country.

The case is Sorrell v. IMS Health. A decision should be handed down in the next two months.