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Selling of prescription information questioned
Drug-makers buy data to learn which medicines individual doctors prefer
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Published: August 20, 2008
WASHINGTON - When most patients go to the pharmacy to fill a new prescription, they don't think twice about turning over the note from their doctor.
After all, how much could the scrawled handwriting on that tiny slip be worth?
Not much to the average consumer -- but to the world's largest drug-makers, the information is an invaluable sales tool that they use to track what drugs individual doctors are prescribing all across the country.
Such companies as IMS Health Inc. have built an industry around gathering prescription data and selling the information to pharmaceutical companies for millions of dollars each year. Pfizer Inc., Merck & Co. Inc. and nearly every other drug-maker use the data to identify which doctors are prescribing their drugs and which are prescribing the competition. When freebie-wielding salespeople show up at their offices, most doctors don't know that they are being targeted based on their own prescribing habits.
But the political tide may be turning against IMS Health and such competitors as Verispan, a unit of Surveillance Data Inc. After years of steady growth, they are fighting against laws in three New England states to keep prescribing information out of their hands.
Judges in Maine and New Hampshire have handed the companies early victories, declaring laws aimed at stopping the commercial use of prescription data unconstitutional. But an impending decision by a federal appeals court could overturn those actions and open the door to more restrictions nationwide.
As many as 18 states, including North Carolina, considered data restrictions this year, though analysts said they held off to see if New Hampshire's law survives legal scrutiny. The challenges to so-called data-mining companies are part of a larger backlash against pharmaceutical-marketing efforts, which involve courting doctors with gifts, meals and other perks.
State advocates say that the sales push drives up the cost of health care by persuading doctors to prescribe the latest, most expensive medications -- instead of cheaper, sometimes better, options.
"Obviously these companies want doctors to prescribe the medicines they're marketing," said Assistant Attorney General Laura Lombardi of New Hampshire. "We want doctors to make their decisions based solely on their best medical judgment, rather than the best interests of pharmaceutical manufacturers."
IMS Health executives argue that without their products, drug companies would have to hire even larger sales forces, because they wouldn't be able to focus their efforts.
But state legislators note that in the 10 years since 1993, when IMS began its prescription-tracking system, spending on drug promotion rose 300 percent and company sales forces doubled to more than 100,000 representatives.
"The word for how I felt is ‘violated,'" said Dr. Gary Sobelson, a New Hampshire doctor who supports the data-restriction efforts. "They knew things about my prescribing habits that I didn't know myself."
Attorneys for New Hampshire and Maine say that their laws, which ban or limit the sale of prescription data, protect the privacy of doctors and patients. But judges in both states rejected that argument, noting that all patient names are deleted from prescribing records. They also said that restricting access to the information violates the First Amendment guarantee to free speech. Vermont delayed implementing its own law until 2009, after seeing the challenges its neighbors faced.
"We have no privacy issues here," said Randolph Frankel, a vice president with IMS Health, which is based in Norwalk, Conn.
"What we do have are organizations using this as a platform for their own political agendas,"
Frankel said that national groups, including AARP, continue supporting the data-restriction effort despite court judgments against it.
The 1st U.S. Circuit Court in Boston heard an appeal of New Hampshire's case earlier this year and is expected to announce a decision this month. If the court decides the law is constitutional, it could open the flood gates to similar efforts across the country.
And although no federal legislators are discussing a national ban on data mining, the issue has attracted scrutiny from some on Capitol Hill. Sen. Herb Kohl has begun pressing the American Medical Association about its role in helping data-mining companies identify individual doctors.
After IMS and other companies buy prescribing data from pharmacies, they rely on AMA's databases to match the numbers with individual physician identities. The AMA generated more than $46 million from the sale of database information last year.
But the group pointed out in an April letter that doctors can ask that their information not be shared with drug salespeople.
Kohl fired back, noting that less than a third of physicians are aware of that option. A Wisconsin Democrat, he is chairman of the Senate Committee on Aging, which is pressuring the group to make it easier for doctors to keep their prescribing information confidential.
"By selling data that allows pharmaceutical sales representatives to see which doctors are prescribing which drugs, the AMA is giving drug-makers what they need to exert more influence," Kohl said.
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