On June 9, 2007, the governor of Vermont, James Douglas, signed into law a bill limiting the use of prescription information that identifies health care providers for marketing or promoting a prescription drug. The new law permits use of such “prescriber-identifiable data” only where the health care provider consents to the use of the data and the marketer discloses information describing various benefits and risks of using alternative drugs and treatments.

The new Vermont law is functionally similar to a New Hampshire statute that recently was struck down by the US District Court for the District of New Hampshire on First Amendment grounds. Unlike the New Hampshire statute, however, the Vermont legislation allows a prescriber to give consent (“opt in”) to use prescriber-identifiable data for commercial purposes. Additionally, the Vermont law includes findings regarding the state’s interest in banning the use of prescriber information. These changes were designed specifically to address the District Court’s concern that the New Hampshire statute was overbroad and that the state lacked a substantial government interest in restricting such commercial speech. Because the Vermont law may still be interpreted as unnecessarily restricting commercial speech and because the legislative findings are generally similar to the arguments disregarded by the court in its decision to invalidate the New Hampshire statute, a successful constitutional challenge to the Vermont law is still possible.

Discussion of the Vermont Law

The new Vermont law limits the use of prescriber-identifiable data by stating that:

[a] health insurer, a self-insured employer, an electronic transmission intermediary, a pharmacy, or other similar entity may use regulated records which include prescription information containing prescriber-identifiable data for marketing or promoting a prescription drug only if:

1. A prescriber has provided consent for the use of that data and
2. The [pharmaceutical] marketer … disclose[s] to the prescriber evidence-based information … describing the specific health benefits or risks of using other pharmaceutical drugs … which patients would gain from the health benefits or be susceptible to the risks described, the range of prescription drug treatment options, and the cost of treatment options

Accordingly, a pharmaceutical marketer wishing to use data that monitors individual physicians’ prescription patterns in order to custom tailor communications (“detailing”) must first verify that the targeted physicians have consented to the use of prescriber-identifiable data. Assuming that the consent was given, the marketer must then disclose the full range of treatment options, the advantages and disadvantages of each treatment option, and the cost of each treatment option in order to use the data to market his or her drug.

The law states that by limiting the use of prescriber-identifiable data the general assembly intends “to advance the state’s interest in protecting the public health of Vermonters, protecting the privacy of prescribers and prescribing information, and [ensuring that] costs are contained in the private health care sector, as well as for state purchasers of prescription drugs, through the promotion of less costly drugs and ensuring prescribers receive unbiased opinions.”

Can the Vermont Law Survive First Amendment Scrutiny?

While functionally similar to a New Hampshire statute that was invalidated on First Amendment grounds, the Vermont law is specifically designed to address the two shortcomings of the New Hampshire law that led to its invalidation. Specifically, the Vermont law includes several legislative findings addressing the court’s determination that restricting the use of prescriber-identifiable data serves no substantial governmental interests. It also provides that prescribers may opt in to allowing commercial use of such data to address the court’s determination that the New Hampshire Prescription Information Law was more extensive than necessary to serve any substantial interests the state may have.

Despite these modifications the Vermont law may still be vulnerable to the same constitutional challenges that invalidated the New Hampshire law. The state interests listed in the Vermont statute are effectively the same interests used by the New Hampshire attorney general in defending New Hampshire’s version of the law. While invalidating the New Hampshire law, the court dismissed the interest in protecting provider privacy. It also determined that the general claim that public health is undermined by more effective detailing for brand-name drugs is counterintuitive and unproven. Moreover, the court listed several strategies to advance any legitimate interests that the state may have that are arguably narrower than prohibiting the transmission of prescriber-identifiable data, even if the prohibition has an opt-in provision. As such, the Vermont law is arguably vulnerable to judicial scrutiny because it is not meaningfully different from the invalidated New Hampshire statute.

Conclusion

Although the Vermont law is designed to address the constitutional challenges that invalidated the New Hampshire Prescription Information Law, it is not clear whether the addition of legislative findings and an opt-in provision will be sufficient to overcome judicial scrutiny. Nevertheless, until the statute is challenged and invalidated, data-mining companies and pharmaceutical marketers should obtain prescriber-identifiable data regarding only prescribers who are on the Vermont Department of Health’s list of consenting prescribers. Pharmaceutical marketers should also ensure that they disclose all required information regarding alternative drugs and therapies.

For further information, please contact:

Larri Short
202.775.5786
short.larri@arentfox.com