A Subsidiary Of Wolters Kluwer Health Inc. v. Mills

• Decision Date: 04 August 2010
• Docket Number: No. 08-1248.,08-1248.
• Citation: 616 F.3d 7
• Parties: IMS HEALTH INCORPORATED, Verispan, LLC, and Source Healthcare Analytics, Inc., a subsidiary of Wolters Kluwer Health, Inc., Plaintiffs, Appellees, v. Janet T. MILLS, as Attorney General for the State of Maine, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

616 F.3d 7

IMS HEALTH INCORPORATED, Verispan, LLC, and Source Healthcare Analytics, Inc., a subsidiary of Wolters Kluwer Health, Inc., Plaintiffs, Appellees,

v.Janet T. MILLS, as Attorney General for the State of Maine, Defendant, Appellant.

No. 08-1248.

United States Court of Appeals,First Circuit.

Heard April 5, 2010.

Decided Aug. 4, 2010.

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Thomas A. Knowlton, Assistant Attorney General, with whom Janet T. Mills, Attorney General of the State of Maine, Paul Stern, Deputy Attorney General, Nancy Macirowski, Assistant Attorney General, and Thomas C. Bradley, Assistant Attorney General, were on brief for appellants.

Thomas C. Goldstein, with whom Thomas R. Julin, Jamie Z. Isani, Patricia Acosta, Hunton & Williams LLP, Jack H. Montgomery, Bernstein, Shur, Sawyer & Nelson, P.A., Mark A. Ash, and Smith Anderson Blount Dorsett Mitchell & Jernigan LLP, were on brief for appellees.

Before LYNCH, Chief Judge, LIPEZ and HOWARD, Circuit Judges.

LYNCH, Chief Judge.

This case involves constitutional challenges to a Maine statute enacted to reduce health care costs and protect prescribers' data privacy. In Maine and elsewhere, each time a prescription from a physician or other licensed prescriber is given to a pharmacy, the pharmacy obtains a number of facts that identify the prescriber. Data put together from multiple transactions involving the same prescriber reveal certain patterns and preferences, including her prescribing history, her choice of particular brand-name drugs versus their generic equivalents, and the likelihood she will adopt new brand-name drugs.

Plaintiffs challenge the constitutionality of Me.Rev.Stat. Ann. tit. 22, § 1711-E(2-A), which allows prescribers licensed in Maine to choose not to make this identifying information available for use in marketing prescription drugs to them. Section 1711-E(2-A) does not directly prohibit any marketing practices. Rather, it prohibits certain entities from licensing, using, selling, transferring, or exchanging this information for a marketing purpose if the prescriber has opted to protect the confidentiality of her prescribing data. Me.Rev.Stat. Ann. tit. 22, § 1711-E(2-A).

Plaintiffs, companies that collect vast amounts of identifying data about individual prescribers and aggregate the data into reports and databases for use when marketing pharmaceutical products, are covered in the text of the law, as are others. See id. § 1711-E(1)(A), (I). Immediately after section 1711-E(2-A)'s enactment in 2008, and before its enforcement, plaintiffs sued Maine's attorney general in the federal district court of Maine under 42 U.S.C. § 1983, claiming that section 1711-E(2-A)'s restrictions on the licensing, use, sale, transfer, or exchange of Maine prescribers' identifying data for a marketing purpose are unconstitutional limitations on protected speech under the First Amendment; that these restrictions are unconstitutionally vague and overbroad under the First and Fourteenth Amendments; and that the law also regulates transactions outside of Maine in violation of the dormant Commerce Clause. On December 21, 2007, the district court granted plaintiffs a preliminary injunction and prohibited Maine from enforcing section 1711-E(2-A) on the basis of plaintiffs' First Amendment claims. See IMS Health Corp. v. Rowe, 532 F.Supp.2d 153, 183 (D.Me.2007). ¹

This case comes to us in an unusual posture. Maine is not the only state to have restricted plaintiffs' use of prescriber-identifying data, and this is not the first time plaintiffs have made these constitutional claims. On November 18, 2008, after the district court granted plaintiffs a preliminary injunction in this case, this court upheld a similar, but not identical, New Hampshire statute against plaintiffs' constitutional challenges, a ruling that binds this panel. See IMS Health Inc. v. Ayotte, 550 F.3d 42 (1st Cir.2008), cert. denied, --- U.S. ----, 129 S.Ct. 2864, 174 L.Ed.2d 578 (2009). In the meantime, the district court's injunction has remained in effect during this appeal, and Maine has never implemented section 1711-E(2-A).

We reject all of plaintiffs' constitutional challenges to section 1711-E(2-A). Plaintiffs' First Amendment challenges fail for the reasons stated in Ayotte: the statute regulates conduct, not speech, and even if it regulates commercial speech, that regulation satisfies constitutional standards. They also fail for reasons not present in Ayotte. The Maine statute constitutionally protects Maine prescribers' choice to opt in to confidentiality protection to avoid being subjected to unwanted solicitations based on their identifying data. We also reject the argument that the statute is void for vagueness.

Plaintiffs' argument that section 1711-E(2-A) is unconstitutional under the dormant Commerce Clause if applied to plaintiffs' out-of-state use or sale of opted in Maine prescribers' identifying data also fails. We interpret the Maine statute using Maine's principles of statutory construction and hold that section 1711-E(2-A) regulates prescription drug information intermediaries' out-of-state use or sale of opted-in Maine prescribers' data. We hold that this interpretation does not raise constitutional concerns under the dormant Commerce Clause, which might necessitate a narrower reading of the statute under the doctrine of constitutional avoidance.

The Supreme Court's current dormant Commerce Clause jurisprudence does not leave Maine powerless to protect Maine prescribers who have sought to prevent the use of their identifying data in transactions that also cause substantial in-state harms, including increased health care costs. The statute constitutionally reaches plaintiffs' out-of-state transactions as a necessary incident of Maine's strong interest in protecting opted-in Maine prescribers from unwanted solicitations, a policy that Maine also rationally believes will lower its health care costs. Nor, we hold, would section 1711-E(2-A)'s regulation of prescription drug information intermediaries' out-of-state use or sale of opted-in Maine prescribers' identifying data raise constitutional concerns as a disproportionate burden on interstate commerce under Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970).

I. Factual Background

The relevant facts are undisputed. ²

Prescriber-identifying data is used for many purposes, but this case concerns restrictions on only one of those uses: pharmaceutical manufacturers' use of the data to send their pharmaceutical sales representatives to personally market particular drugs to particular prescribers, a practice known as “detailing.” Section 1711-E defines “detailing” as “one-to-one contact with a prescriber or employees or agents of a prescriber for the purpose of increasing or reinforcing the prescribing of a certain drug by the prescriber.” Me.Rev.Stat. Ann. tit. 22, § 1711-E(1)(A-2).

Detailing is a massive and expensive undertaking for pharmaceutical manufacturers, which spend billions of dollars a year to have some 90,000 pharmaceutical sales representatives make weekly or monthly one-on-one visits to prescribers nationwide. Stephanie Saul, Doctors Object as Drug Makers Learn Who's Prescribing What, N.Y. Times, May 4, 2006, at A1. Each pharmaceutical manufacturer's detailers market particular pharmaceutical products in particular regions. A single prescriber is visited by an average of twenty-eight detailers a week; an average of fourteen detailers a week call on a single specialist.

Prescriber-identifying data is a valuable tool in a detailer's arsenal of sales techniques. With it, pharmaceutical manufacturers can pinpoint the prescribing habits of individual prescribers in a region and target prescribers who might be persuaded to switch brands or prescribe more of a detailer's brand of products. ³ See Saul, supra, at A1.

During their one-on-one visits to prescribers, detailers distribute upwards of $1 million worth of free product samples per year, along with branded promotional materials and pamphlets about the different conditions their particular products can be used to treat. Detailers use prescriber-identifying data to do these things more effectively; every sales pitch can be tailored to what the detailer knows of the prescriber based on her prescribing history. The central objective is to get prescribers to adopt the pharmaceutical product the detailer is marketing and to build brand loyalty. This goal is not only explicit; it is how detailers earn bonuses. See Saul, supra, at A1.

Some prescribers, in Maine and elsewhere, welcome these interactions. Detailers, they say, provide them with studies relevant to their practices, useful free samples, and targeted data about how widely certain new drugs have been prescribed by others. They find that detailers provide helpful comparisons of competing drugs used to treat the same conditions and information about new drugs or more effective alternatives to the prescriptions they currently prescribe. These prescribers say they are immune to detailers' influence and see no conflict of interest.

Significantly, though, other prescribers have strenuously objected that detailing intrudes into their prescribing decisions. Detailers, these prescribers insist, should not be able to use their prescribing histories to target them for unwelcome marketing calls. An article by a senior vice president of the American Medical Association (AMA) and an executive of plaintiff IMS Health noted that physicians “complain bitterly” about detailers “who wave data in their faces” and challenge them with their own prescribing histories when they fail to prescribe more of the product the detailer has been advertising. R.A. Musacchio & R.J. Hunkler, More Than a Game of Keep-Away, Pharmaceutical Executive, May 2006. The head of California's state medical association has...