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Controversial Court Ruling Strikes Blow Against Pharma Marketing

November 28, 2008
by Reece Hirsch
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On November 19, the First U.S. Circuit Court of Appeals in Boston handed down a decision that could have a far-reaching impact on the marketing of prescription drugs. The appeals court upheld a New Hampshire law that prohibits the sale of information about physicians' prescribing practices for use in prescription drug marketing.Â

The New Hampshire law prohibits pharmacies, pharmacy benefit managers, insurance companies and data mining companies that collect and analyze prescription information from selling or using that information for commercial purposes. The law was intended to reduce rising state health care costs that allegedly resulted when promotional activities of pharma representatives caused physicians to prescribe brand-name drugs rather than less expensive generics.

The appeals court decision overturns a 2007 ruling by a U.S. District judge in New Hampshire, who held that the law violated the First Amendment.

Appeals court Judge Bruce Marshall Selya wrote that the reselling of prescription information is "mind-boggling" in its scope, and results in "the overzealous prescription of more costly brand-name drugs regardless of both the public health consequences and the probable outcome of a sensible cost/benefit analysis."

It's important to note that the New Hampshire law applies to non-patient identifiable information, such as how often a physician prescribes a particular drug. HIPAA is generally premised upon the assumption that a patient's express written authorization of a use or disclosure of individually identifiable health information is sufficient to permit almost any activity. In contrast, the New Hampshire law assumes that certain commercial uses of medical-related information are inherently pernicious and must be completely prohibited.

The appeals court's decision could provide an impetus to other states considering this sort of legislation. In my view, this is a dangerous precedent. If lawmakers can make a valid case that a conduct is harmful, then they should pass a law prohibiting that specific conduct. Instead, the New Hampshire law restricts the flow of information that is often critical to creating a more efficiently functioning health care system. Enacting a law that seems to assume that marketing brand-name prescription drugs is inherently harmful is misguided and counterproductive.Â

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Reece Hirsch

Partner, Morgan, Lewis & Bockius LLP

Reece Hirsch's Health Care Privacy Law Blog offers a lively commentary on a wide range of...