Supreme Court Seems to Side With Pharma in Big Advertising Case

Limits of data mining, commercial free speech at issue

WASHINGTON — Tuesday was a good day at the Supreme Court for healthcare industry researcher IMS Health, big pharma, and advertising. The day was tougher for the State of Vermont which defended a statute preventing prescription drug data from being used to market to doctors without their permission.

The advertising community is watching the case because it raises questions about what constitutes commercial free speech in advertising. A win for Vermont could have a chilling effect on other research firms that mine data for advertising and marketing. Naturally, IMS Health and its allies, including the Association of National Advertisers and 50 other organizations that together filed 16 friend of the court briefs, are hoping the court shoots down the Vermont statute.

The law deals with information about prescriptions and the doctors who prescribe them, which pharmacies are required by law to keep, stripped of patient information. Under it, medical researchers, insurers, and the government can still receive information about what individuals prescribe, but data mining and pharmaceutical companies that would like to use that data in order to target their marketing to doctors cannot, at least not without the doctors' permission. 

"This is one of the most important advertising cases to come before the Supreme Court in some time," said Dan Jaffe, executive vice president of the Association of National Advertisers. "The signals [by the Court] seem favorable, but we don't want to over-read them. We've got our fingers crossed."

The court's decision won't come until late June, but during oral arguments on Tuesday it seemed likely that the nine justices—or at least a majority of them—will side with IMS Health and uphold a 2010 decision by the Second Circuit Court of Appeals, which threw out the Vermont statute.

Bridget Asay, a Vermont assistant attorney general who was representing her state, didn't get very far into her argument before things started going downhill when Chief Justice John Roberts jumped in with his first question, in which he seemed to indicate that he's decided the statute violates the First Amendment's free speech protections.

"You want to lower Vermont healthcare costs by restricting the flow of information by censoring what [doctors] can hear when prescribing drugs," Roberts said.

Justice Ruth Bader Ginsburg, one of the court's liberals, seemed to agree with the conservative chief justice. "You can't lower the voice of one speaker so others can be heard better," she said.

Under fire, Asay had trouble putting together a coherent argument. Was the statute about protecting a doctor's privacy from big bad marketers? Or was it about Vermont’s goal of reducing medical costs?

By contrast, on the other side, there was Thomas Goldstein, the attorney for the respondents. This was Goldstein's 23rd time arguing before the nation's highest court, and it showed, as he bantered a bit with Justice Stephen Breyer (another liberal who seemed ready to side with IMS), even while driving home the First Amendment argument.

"You never try to predict the outcome based on oral argument. But most people interested in the First Amendment part of this case came out hopeful," said Bob Corn-Revere, who wrote a friend of the court brief for the ANA, 4A's, and American Advertising Federation. "The Court understood this as a First Amendment problem and addressed their questions to those concerns." 

IMS Health has been fighting the Vermont law and similar statutes in New Hampshire and Maine since 2006, though it has been able to ward off more than 100 bills in other states, noted Randy Frankel, the company's vice president of external affairs.