With law ban, marketing system for Rxs is safe... for now

WHAT IT MEANS AND WHY IT'S IMPORTANT — The law targeting data mining in Vermont, along with laws in New Hampshire and Maine, would have forced drug companies to significantly change the way they market drugs to physicians had the Supreme Court allowed them to stand in the case of Sorrell, Attorney General of Vermont, et al. vs. IMS Health Inc., et al.

(THE NEWS: Supreme Court strikes down Rx data mining law. For the full story, click here.)

When pharmacies fill prescriptions, they sell the data to such data mining companies as IMS Health, replacing patients’ identities with numbers but including their ages and genders, while retaining the prescribers’ names. The data mining companies then sell those data to drug companies, for which the data are critical to their marketing efforts because they allow the companies to determine such things as the demographics of various disease states, thus making it easier for them to tailor their sales pitches to physicians. IMS also provides a handy source of data for the charts illustrating sales and dispensing of drugs that frequently adorn the pages of Drug Store News.

But data mining has become controversial lately. In January, the Los Angeles Times ran an editorial attacking the practice, asserting that it violated patient privacy and expressing fears that it would allow drug companies to track individual patients. The controversy has led to efforts to enact laws that regulate it, requiring doctors’ consent before pharmacies can release prescribing data to data mining companies.

The Vermont law was well-intentioned in many ways: It was designed to encourage more prescribing of generic drugs by limiting the amount of data that branded drug companies can obtain, thus leveling the playing field. It’s well-known that generic drugs are cheaper for patients and can lower the cost of health care, but the Supreme Court decided that the law violated the free speech of drug companies and such data mining firms as IMS. As such, a critical component of the marketing system for prescription drugs appears safe, at least for now.