On June 23, 2011, in a 6-3 decision, the United States Supreme Court ruled in IMS Health Inc. v. Sorrell that a Vermont law that prohibited the sale of prescriber-identifiable data to drug companies was an unconstitutional violation of the First Amendment right to free speech.  Thomas Julin, a partner at Hunton & Williams LLP, represented IMS Health in this case.  The Supreme Court’s ruling affirmed the holding of the U.S. Court of Appeals for the Second Circuit.  The ruling resolves a Circuit split that had occurred since the U.S. Court of Appeals for the First Circuit upheld a similar law in New Hampshire as constitutional and will likely prevent the enactment of similar restrictive laws across the country.

Vermont’s law states that health insurers, pharmacies and other entities “shall not sell, license, or exchange for value regulated records containing prescriber-identifiable information, nor permit the use of regulated records containing prescriber-identifiable information for marketing or promoting a prescription drug, unless the prescriber consents.”  The law also mandates that “[p]harmaceutical manufacturers and pharmaceutical marketers shall not use prescriber-identifiable information for marketing or promoting a prescription drug unless the prescriber consents.”  Vermont’s law was intended to limit the process of “detailing” in which pharmaceutical manufacturers use prescriber-identifiable information to “ascertain which doctors are likely to be interested in a particular drug and how best to present a particular sales message.”

In analyzing the constitutionality of the Vermont law, the Supreme Court first held that the Vermont law must be analyzed with heightened scrutiny because the law “imposes a speaker- and content-based burden on protected expression, and that circumstance is sufficient to justify application of heightened scrutiny.”  Under heightened scrutiny, Vermont was required to show “that the statute directly advances a substantial governmental interest and that the measure is drawn to achieve that interest.”  The two substantial government interests set forth by Vermont were to (1) “protect medical privacy, including physician confidentiality, avoidance of harassment, and the integrity of the doctor-patient relationship” and (2) improve public health and reduce healthcare costs.  The Court held that the first interest was not justified because Vermont “has conditioned privacy on acceptance of a content-based rule that is not drawn to serve the State’s asserted interest.”  In other words, to obtain privacy, prescribers would be “forced to acquiesce in the State’s goal of burdening disfavored speech by disfavored speakers” such as pharmaceutical marketing companies.  The Court held that while the second interest was substantial, the Vermont law did not directly advance that interest but rather “through the indirect means of restraining certain speech by certain speakers—that is, by diminishing detailers’ ability to influence prescription decisions.”

Read our previous coverage of the IMS Health case and listen to an audio recording of Thomas Julin discussing the case during the May 2011 First Friday call held by the Centre for Information Policy Leadership.