Supreme Court hears case: Is Vermont restricting drug companies' speech?

The US Supreme Court on Tuesday began examining whether Vermont legislators went too far when they enacted a 2007 law designed to shield drug-prescribing records from use by pharmaceutical companies seeking to sell new drugs to the state’s doctors.

Vermont Assistant Attorney General Bridget Asay defended the statute, telling the justices it was designed to allow doctors to decide for themselves whether prescription information retained by pharmacies could be sold and used by drug companies as a marketing tool.

This is no minor side-business. Drug companies spend an estimated $8 billion a year in such marketing. It includes studying doctor-specific prescription drug data obtained from pharmacies. They then use those findings to tailor sales pitches to persuade physicians to prescribe new, more expensive, drugs for their patients. The data purchased by the drug companies do not include the identities of patients.

The 2007 law allows the prescription drug information to continue to be distributed for research and insurance verification purposes. But it barred drug companies from using the data for marketing unless the prescribing doctor had agreed beforehand to permit the marketing.

Vermont lawmakers justified the measure in part as a means to keep health-care costs down. They found that by deploying marketing teams whose job is to replace cheaper generic drugs with the more expensive products, drug companies were driving up the cost of health care.

Discrimination by Vermont

A Washington lawyer representing the pharmaceutical industry, Thomas Goldstein, told the justices Tuesday that the measure amounted to discrimination by the State of Vermont against the constitutionally protected commercial speech of drug companies.

He said the companies were engaged in truthful and accurate speech about life-saving medicines.

He urged the high court to strike the statute down as a violation of free speech protections of the First Amendment.

“The way the First Amendment works in the marketplace of ideas is that both sides get to tell their story,” Mr. Goldstein said.

“If the message is accurate,” he added, “the drug companies can go make their pitch. Vermont can come along and make the opposite pitch. So can insurance companies.”

“But what you can't do is have a rule that says one side is going to have a much harder time getting to their audience,” Goldstein said.

Several justices appeared sympathetic to the argument.

“You want to lower your health-care costs not by direct regulation but by … censoring what they can hear to make sure they don’t have full information [about new drugs],” Chief Justice John Roberts told Vermont’s lawyer, Ms. Asay.

“The statute does not limit the information doctors receive,” Asay responded. Drug companies may still contact the physician and deliver a sales pitch, just not the targeted pitch from the analyzed prescription data.

'Restricting access to information'

“You are making it more difficult for them to speak by restricting access to information that would enable their speech to be most effective,” Justice Antonin Scalia said.

Asay said the drug makers have no right to demand a doctor’s prescription information without first obtaining that doctor’s consent.

“But you are making a judgment about whether or not their speech will be more effective or not,” Chief Justice Roberts said. “Don’t you think they’re the ones who are entitled to make that judgment?”

Deputy Solicitor General Edwin Kneedler argued in support of the Vermont law. He said the measure protects important interests in physicians maintaining autonomy over data reflecting his or her history of prescribing medications.

'Put the physician ... on equal footing'

“Prior to the time this statute was enacted, the pharmacy had complete control of the disposition of that information,” he said. “What this statute does is put the physician, the prescriber, on equal footing with respect to the pharmacy.”

He said the Vermont law is similar to consumer efforts to block receipt of unwanted junk mail and telemarketing calls. But the Vermont law is more limited, he said.

The case is Sorrell v. IMS Health Inc. (10-779). A decision is expected by the end of June.