The U.S. Supreme Court heard oral argument last week in Sorrell v. IMS Health, Inc.  As described in our earlier post, the case involves a constitutional challenge to a Vermont law prohibiting the use or sale of doctors’ identifying information in prescription records—i.e., prescriber-identifiable data—without the doctor’s express consent.

The key legal issue, as framed by the Vermont Attorney General in the cert petition, is whether “laws that restrict access to or commercial use of non-public drug prescriber information implicate First Amendment rights and, if so, what type of First Amendment review applies.”  The Court of Appeals for the Second Circuit had ruled that the law is an impermissible restriction on commercial speech under the First Amendment.

At the oral argument on April 26, the assistant state attorney general characterized the law as meant to protect a privacy interest of physicians.  She asserted that physicians should be allowed to choose whether information they’re required to give to pharmacies may be used in marketing directed toward them.  The lawyer for IMS Health countered that the State may not restrict the speech of one type of stakeholder to favor another.

Press reports of the oral argument indicate that, like the Second Circuit, a majority of the Supreme Court seemed to be troubled by the law.  The Court seemed to be leaning toward a determination that the commercial use of the data is protected commercial speech.  The concept that the law served to protect a privacy interest of the physicians seemed to gain very little traction, since it was noted that the same information that Vermont seeks to prevent the branded pharmaceutical industry from using is generally available for use by other stakeholders in the health care industry.  A number of the justices also reportedly expressed concern with the way Vermont sought to lower health care costs through the law—not by direct regulation, but by restricting the flow of information to doctors.

A decision in the case is expected by June.

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Photo of Anna D. Kraus Anna D. Kraus

Anna Durand Kraus advises on issues relating to the complex array of laws governing the health care industry. Her background as Deputy General Counsel to the U.S. Department of Health and Human Services (“HHS”) gives her broad experience with, and valuable insight into…

Anna Durand Kraus advises on issues relating to the complex array of laws governing the health care industry. Her background as Deputy General Counsel to the U.S. Department of Health and Human Services (“HHS”) gives her broad experience with, and valuable insight into, the programs and issues within the purview of HHS, including Medicare, Medicaid, fraud and abuse, and HIPAA privacy and security. Anna is co-chair of the firm’s Health Care Industry practice group.

Anna regularly advises clients on Medicare reimbursement matters, particularly those arising under Part B and the Part D prescription drug benefit. She also has extensive experience with the Medicaid Drug Rebate program. She assists numerous pharmaceutical and device manufacturers, health care providers, pharmacy benefit managers, and other health care industry stakeholders to navigate the challenges and opportunities presented by the Affordable Care Act.

Anna is a trusted adviser on health information privacy, security and breach notification issues, including those arising under the Health Insurance Portability and Accountability Act (“HIPAA”) and the Health Information Technology for Economic and Clinical Health (“HITECH”) Act. Her background in this area dates back to the issuance of the original HIPAA privacy regulations.

Anna’s clients depend on her to guide them through compliance with the Anti-Kickback statute, the Stark regulations, and other laws preventing fraud and abuse in the health care industry. Her deep knowledge of these laws has made her an important component of the firm’s representation of pharmaceutical companies and health care organizations under federal investigation or facing allegations under the False Claims Act. In addition, clients contemplating acquisitions in the health care sector rely on her to guide due diligence efforts.