In the case, Sorrell v. IMS Health, No. 10-779, the Supreme Court handed down a 6-3 majority decision and ruled that the law interfered with the pharmaceutical industry's First Amendment right to market its products.
Marketing drugs to doctors is one of the more advantageous ways that pharmaceutical companies promote and sell their drugs, and collecting information--such as a doctor's name, the drug prescribed and how often the medication is ordered--can help pharmaceutical companies' better target their products to doctors.
To collect the data, pharmaceutical companies hire firms like IMS Health, which provides market intelligence to the pharmaceutical industry. Drug makers buy prescription records that reveal the prescribing practices of individual doctors from data mining companies and, based on the information, practice a type of marketing called "detailing," in which sales representatives, who already know which doctors prescribe certain kinds of medications, pitch information about new drugs they think will be of interest to the doctor.
A Vermont 2007 law restricted detailing by banning the use of prescription data for marketing purposes, and advocates said the measure would protect doctor and patient privacy as well as help to control drug costs.
While the law banned the use of prescription data for detailing, it allowed the information to be used for health care research, educational purposes, and noted that the data could also be used by law enforcement, insurance companies, and journalists.
The Vermont law was challenged by data mining and drug companies who said the law restricted doctors from learning about more expensive drugs while allowing the state to push less costly generic drugs.
The Supreme Court's majority opinion, written by Justice Anthony Kennedy, said the Vermont law was an unconstitutional infringement on pharmaceutical company's free speech rights.
"Speech in aid of pharmaceutical marketing, however, is a form of expression protected by the Free Speech Clause of the First Amendment," Justice Kennedy said. "As a consequence, Vermont's statute must be subjected to heightened judicial scrutiny. The law cannot satisfy that standard."
Chief Justice Roberts and Justices Scalia, Thomas, Alito, and Sotomayor joined the majority opinion.
Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg and Elena Kagan, dissented.
According to Justice Breyer, the majority mistakenly applied strict First Amendment standards in considering the case.
"The Vermont statute before us adversely affects expression in one, and only one, way. It deprives pharmaceutical and data-mining companies of data, collected pursuant to the government's regulatory mandate, that could help pharmaceutical companies create better sales messages," Justice Breyer said. "In my view, this effect on expression is inextricably related to a lawful governmental effort to regulate a commercial enterprise. The First Amendment does not require courts to apply a special "heightened" standard of review when reviewing such an effort."
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