Supreme Court Strikes Decision on Prescription Drug Records: Victory for Marketers
June 24, 2011 — By a 6-3 vote, the Supreme Court came to the decision yesterday to eliminate a law prohibiting the use of prescription drug records for marketing — ruling for free-speech rights over a state government’s medical privacy concern. The Direct Marketing Association (DMA) supports the Supreme Court’s decision to strike down the law.
“Pharmaceutical marketers will now be able to promote their products to those who are interested,” said Linda Woolley, DMA executive vice president of Washington operations. “The collection of prescriber-identifiable information for marketing purposes better serves the needs of doctors who desire to make the best decisions for their patients without government interference. The plaintiffs in this case tried to make it a case about privacy, but the Supreme Court accurately decided in favor of commercial free speech. We applaud the Court for its decision.”
DMA will be presenting a free webinar Monday, July 11, at 3:00 p.m. ET, to discuss the topic in depth. Speakers Stu Ingis and Milo Cividanes, both partners at Venable LLP, will speak about the implications of the decision for marketers. To register for the webinar, please click here or visit http://bit.ly/dmaaction071111.
Data-mining companies IMS Health, Verispan, and Source Healthcare Analytics (a unit of Dutch publishers Wolters Kluwer), challenged the Vermont law that restricted the sale, transmission, or use of prescriber-identifiable information for marketing purposes without the prescribing physician’s consent. The justices upheld a ruling by a US appeals court that Vermont’s law infringed on commercial free-speech rights in violation of the First Amendment of the US Constitution. The Vermont law was adopted in 2007, and had also been enforced in Maine and New Hampshire. Similar legislation was proposed in about 25 states.
Pharmaceutical manufacturers use data regarding a doctor’s prescribing habits to allow their salespeople to market their products efficiently. The data is also used to help monitor safety issues of new medications, to reduce costs, and for research purposes such as studying treatment outcomes.
"Speech in aid of pharmaceutical marketing, however, is a form of expression protected by the Free Speech Clause of the First Amendment," Justice Anthony Kennedy wrote in the court's majority opinion. “The state may not burden the speech of others in order to tilt public debate in a preferred direction.”
The drug companies’ attorneys argued that the law discriminated against them, making it difficult to get their message across to doctors.
The Supreme Court case is Sorrell v. IMS Health, No. 10-779.
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About Direct Marketing Association (DMA)
The Direct Marketing Association (www.the-dma.org) is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents companies from dozens of vertical industries in the US and 48 other nations, including nearly half of the Fortune 100 companies, as well as nonprofit organizations.
In 2010, marketers – commercial and nonprofit – spent $153.3 billion on direct marketing, which accounted for 54.2% of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures generated approximately $1.798 trillion in incremental sales. In 2010, direct marketing accounted for 8.3% of total US gross domestic product. Also in 2010, there were 1.4 million direct marketing employees in the US. Their collective sales efforts directly supported 8.4 million other jobs, accounting for a total of 9.8 million US jobs.
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