Ims Health Corp. v. Rowe
| Decision Date | 21 December 2007 |
| Docket Number | No. CV-07-127-B-W.,CV-07-127-B-W. |
| Citation | 532 F.Supp.2d 153 |
| Parties | IMS HEALTH CORP., et al., Plaintiffs v. G. Steven ROWE, Attorney General of the State of Maine, Defendant. |
| Court | U.S. District Court — District of Maine |
Jamie Zysk Isani, Thomas R. Julin, Hunton & Williams, LLP, Miami, FL, John H. Montgomery, Bernstein, Shur, Portland, ME, Mark A. Ash, Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan LLP, Raleigh, NC, for Plaintiffs.
Thomas A. Knowlton, Dept. of Attorney General, Nancy M. Macirowsld, Thomas C. Bradley, Office of the Attorney General, Paul Stern, Assistant Attorney General, Augusta, ME, for Defendant.
Bruce Vignery, Stacy Canan, AARP Foundation Litigation, Washington, DC, Sean M. Fiil-Flynn, Washington College of Law, Washington, DC, James B. Haddow, Petruccello, Martin & Haddow, LLP, Portland, ME, for AARP, Community Catalyst, National Legislative Association, on Prescription Drug Prices, and Dr. Daniel Summers.
AMENDED ORDER ON PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION1
Seeking to cure some ills in the healthcare system, the Maine Legislature enact ed a law that allows Maine prescribers to shield themselves and prevent others from being influenced by their prescribing history. In doing so, the Law restricts freedom of commercial speech. Since certain provisions violate the protections of the First Amendment, this Court grants, in part, a motion for preliminary injunction and enjoins the enforcement of portions of the Maine law.
On January 1, 2008, L.D. 4, "An Act to Amend the Prescription Privacy Law," will become effective in the state of Maine.2 The Plaintiffs, three prescription drug information intermediaries (PDIIs), move for a preliminary injunction against the enforcement of the law, claiming it violates the First Amendment.3
In the complex world of American health care, gaps among the traditional roles of physician, pharmacy, and patient in prescribing and filling medication have been filled by niche players who have assumed increasingly significant parts in the delivery of health care.4 PDIIs fill one of those gaps. As a patient fills a prescription, the pharmacy gains a wealth of information about the transaction, the prescriber, and the patient. This data is not simply useful; it is valuable. When aggregated and analyzed, this information demonstrates the normative prescribing patterns for health care professionals both as a whole and as individuals and is of considerable interest to government agencies, academic institutions, health insurance companies, health maintenance organizations, and other entities. Collectively these groups use the data to regulate, research, reimburse, and monitor prescribing patterns. In addition, these patterns are of particular interest and enormous value to the pharmaceutical companies as a powerful marketing tool, allowing them to focus their energies and money to effectively influence the prescribing practices of prescribers. The pharmaceutical companies are willing to pay huge sums for the information, especially when organized in a useful format.
Enter the PDIIs. These companies pay the pharmacies to transfer this information. As a consequence, upon entering an order, a pharmacy electronically sends to the contracting PDII certain salient information: (1) the medication, (2) the dosage, (3) the prescriber, (4) the year of birth of the patient, (5) the patient's gender, and (6) where the prescription was filled. Other information is either not sent or is encrypted. For instance, if the pharmacy obtains the diagnosis, it does not forward it to the PDII; other personal data — such as the patient's name, address, and health insurance information — is encrypted. The net effect is that the PDII does not have access to individual patient information; however, the PDII does obtain information about the individual prescriber which it processes, analyzes, and formats to sell to the pharmaceutical industry.
The pharmaceutical industry is one of the prime movers within the American health care system and its success in ameliorating and even curing numerous medical conditions has been virtually miraculous, transforming many painful and devastating illnesses into livable and treatable conditions. But, its success has come at a price. Pharmaceutical manufacturers routinely spend fortunes to vent and to obtain regulatory approval for a product with a limited useful commercial life. During a drug's period under patent, a pharmaceutical company enjoys the full benefit of its research, but upon expiration, generic drug manufacturers quickly enter the field, and produce the drug more cheaply. Sales by the originator of the once lucrative product invariably plummet. To do business, the pharmaceutical company must convince prescribers to write prescriptions for its newly-patented drugs. To this end, the pharmaceutical industry uses an array of marketing devices, the most obvious being direct to consumer marketing, reflected in ubiquitous advertisements. However, the central focus of this case is direct-to-prescriber marketing, aided by PDII information.
The pharmaceutical industry employs a small army of sales representatives, often referred to as detailers.5 Dr. Erik Steele, the Chief Medical Officer of Eastern Maine Healthcare, testified that the pharmaceutical industry employs one drug representative for every four to five physians in the United States.6 The detailers regularly visit prescribers at their clinics and medical offices to persuade them to prescribe their products. The prescriber-witnesses described periodic visits from detailers, ranging from weekly to monthly, often with the sales representatives bringing along free lunch. During the lunch meetings, the pharmaceutical representatives describe the drug product, provide brochures about its properties, and answer questions. After lunch, detailers will Often leave behind trademarked reminders, such as pens, coffee cups, writing pads, and other product-identified material, and they commonly give free samples of selected drugs. The sales force is directed toward pitching patented drugs, since there is no advantage to selling off-patent products. Randolph Frankel, a Vice President at IMS, agreed that pharmaceutical companies annually spend a total of four billion dollars in direct-to-physician marketing, though he did not further break down categories of expenditure.7
The detailers come armed with a considerable advantage: they have access to the PDII information and they know the exact prescribing patterns of each prescriber. The PDII information is an extraordinarily valuable marketing tool in that it tells the detailer which prescriber is likely to accept the pitch. Knowing the prescriber's patterns, the detailer can determine whether the prescriber is likely to be an "early adopter," a prescriber, who tends to begin prescribing a new drug relatively soon after it has been patented. Also, they can pitch the product by comparing their preferred drug to the drugs they know the prescriber has routinely prescribed. This information also tells the detailer who is unlikely to accept the pitch. By knowing prescriptive practices, the detailer can avoid trying to sell a doctor on a drug outside his or her narrow sub-specialty or making a case for a brand-new medicine to a doctor who by habit is a "late adopter," one who invariably waits for a new drug to gain general acceptance before prescribing it. In short, the PDII information allows the pharmaceutical companies to target their expenditure of marketing dollars to influence the individual prescribers most likely to be receptive to the message.
Critics of the pharmaceutical industry point to several concerns about direct-to-prescriber marketing. A primary complaint is cost. Their argument is that by marketing drugs still under patent, detailers tend to steer prescribers away from cheaper, but equally effective, generic drugs, thereby generating unnecessary costs to an already burdened health care system. Indeed, in enacting the Law, the Maine Legislature found that the pharmaceutical companies use the prescription information "to attempt to influence prescribers to prescribe higher priced drugs, thus increasing the market share and profitability of the manufacturers and driving up the cost of health care." 22 M.R.S.A. § 1711-E(1-A)(C). It also found that "[r]estricting the use of prescriber identifying information will act to decrease drug detailing that targets the prescriber, thus increasing decisions to prescribe lower priced" drugs and decisions made on the basis of medical and scientific knowledge and driving down the cost of health care." Id. at § 1711-E(1-A)(D). Finally, when describing the purposes of the Law, the Legislature stated that "[r]estrictions on the use of personally identifying information for marketing purposes will ... decrease unnecessary marketing costs." Id. at § 1711-E(1-B)(B).
The second quarrel is with drug company methods. Drug company representatives inundate prescribers with gifts, running from writing pads, pens, and coffee cups emblazoned with the name of a drug to free lunches. The same is true of free samples. Though the prescribers recognize the value of free samples, particularly for poorer patients, they also sense that the samples are not truly free. The samples often become the drug of choice for patients who later face the dilemma of how to obtain a drug they cannot afford. Further, by prescribing free samples, the prescribers become familiar with the medication and tend to prescribe it more readily for patients who can afford it.
Even if the prescriber is...
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