State Prescription Privacy Law Challenged

Did you know that when your doctor prescribes a drug, any drug, that information is bought and sold?

And the value of all that information is estimated to be in the billions.

Here's how it works.

The drug store receives your prescription.

The store bundles all the information about those scripts, and sells that data to a company like IMS.

IMS is one of the lead plaintiffs in the case against the New Hampshire law.

The company's attorney Tom Julin describes the business.

:04 ...Like reporters go out and talk to sources. Our sources are pharmacies. They gather that information in. They assemble it. And they put it into a product that is very much like a newspaper.

In this case the reports produced by IMS and others detail the prescribing habits of physicians.

:26 the doctors are prescribing a lot of this drug or not as much of that drug. And then there are subscribers to our publication. And our subscribers are principally...manufacturers.

The sales people from those companies can then walk into a doctor's office knowing what doctors prescribe.

But what Julin sees as simple reporting, Dr. Marcia Angell sees as the negative side of the doctor drug sales rep. relationship.

2:56 if they can know what that doctor is prescribing, then they know exactly how to pitch a drug to that doctor. How to bad mouth a competitors drug. How to talk up their own drug. And then they can track how successful they have been in their sales pitch by looking at what the doctor prescribed after the visit compared to before the business.

Angell is lecturer at Harvard Medical School, and wrote a book about Drug company practices.

3:25 these sales people are not advertising, or pitching generic drugs. They are pitching the most expensive, newest, brand name drugs...those drugs that cost the most. even when there are cheaper drugs that are just as good. Or generic drugs that are just as good. So that is how it adds to the cost of the drugs.

In the past five years, the state's Medicaid program has paid more for prescription drugs than it has for hospitalization and physician costs combined.

The law's sponsors say the law is simply an effort to slow that growth.

Both sides agree arming drug reps with doctor's prescribing patterns works.

IMS, the world's largest data mining company earned 1.8 billion dollars in 2005.

And according to the firm's 2005 annual report, sales to the pharmaceutical industry accounted for most of the company's revenue for the previous three years.

Assistant Attorney General Richard Head will be defending the state law in court.

He says the hope is that the law will shift the conversation from the marketing of drugs to the science of drugs.

11:20 it should be about the drug, what is the drug. What does that drug do, how does that drug compare to another particular drug. And how does it compare to a generic drug.

IMS attorney Tom Julin says what makes the law unusual and ultimately unnecessary is that doctors can just close their doors to all drug sales reps.

And on top of that, Julin says the law violates his clients' freedom of speech.

He returns to his newspaper analogy.

16:22 even if there are people who are reading the newspapers and using information for bad purposes, it doesn't give a legislature any justification for banning a newspaper. Information is one of the most precious resources we have here. And is the most protected resource from legislative action.

The state counters that prescription information is not protected speech, but simply a stream of data.

If the New Hampshire law survives the legal challenge, another half dozen states are considering following suit.

Data mining companies, pharmaceutical manufacturers, drug store chains and even the American Medical Association have a financial interest in seeing the court strike the law down.

Industry analysts bet upholding the law could slightly change how drugs are marketed.

But most are convinced pharmaceutical company reps will find a new ways to hit their sales goals.

For NHPR News, I'm DG.