The question in Sorrell is whether a state can require market research firms, or "data miners," to get doctors' permission before selling their prescribing history to drug companies. Drug companies use these histories -- which detail a patient's medications and how much of them a particular doctor prescribes -- to tailor their marketing efforts. Vermont's law requiring doctors to opt-in to sharing their data with marketers was struck down by the Court of Appeals for the Second Circuit as an unconstitutional restriction on commercial free speech, and Sorrell is Vermont's effort to get its law reinstated.
The Supreme Court likely took the case, in part, because the First Circuit upheld similar Maine and New Hampshire laws. When the court renders its decision, it could clarify whether data-mining is conduct or protected speech, and it could clarify just how protected commercial speech -- speech proposing a commercial transaction -- is. Because of the specific speech and data-mining activity in this case, the decision could affect health care costs, treatment effectiveness and, more broadly, the regulation of data-mining in other contexts.
Helping Prioritize Sales Efforts
Drug companies want unfettered access to a doctor's prescribing data to maximize their marketing efficiency. Prescribing histories allow pharmaceutical representatives to question doctors about prescriptions and ask, for example, why one doctor may be prescribing less of one company's drug and more of a competitor's.
Or the information could allow sales reps to thank doctors for prescribing their drugs by inviting them to, say, join a speaker's circuit. Prescribing data can also help determine which doctors might be most willing to adopt new drugs. In short, the information lets the sales force prioritize their sales calls and hone their messages.
Vermont wants to reduce the efficiency of pharmaceutical representatives' marketing because their efforts shift prescriptions from generic drugs to generally much more expensive brand-name drugs at significant cost to the state through Medicaid. Evidence also supports the idea that the marketing leads to bad prescribing decisions, not least because of how false and misleading pharmaceutical marketing can be. In addition, Vermont seeks to protect doctors' privacy.
Beyond the Drug Industry
The court's decision could reach far beyond prescribing data, however. Data-mining is central to business models in the Internet age, although unlike the prescribing data, typically mined data -- about shopping habits or search queries -- isn't supposed to be tied to a person's name and address.
While states and the federal government haven't moved to regulate most of that data collection, in several areas both levels of government have acted, as Vermont explains in its petition to the Supreme Court. Moreover, as the Internet and the data-mining opportunity it represents continue to grow in commercial importance, the government is likely to make more efforts to regulate the collection and sale of the data.
The court hasn't yet set a due date for briefs or a date for arguments in the case, so a decision is months away.