Federal Appeals Court Upholds NH Anti-Data-Mining Law

Stephanie Saul of the New York Times writes--

http://www.nytimes.com/2008/11/19/business/19drug.html?ref=business

--that a Federal appeals court 3-judge panel in Boston overturned a ruling of a lower court and upheld the law passed by New Hampshire, forbidding the sale of data on prescriptions written by individual doctors for use by drug reps.

The data-mining giants, IMS Health and Verispan, had brought suit to challenge the law, and efforts to pass similar laws in other states were largely on hold awaiting the outcome of this action.

The data-mining companies had basically two arguments. First, they claimed that the data had other valuable uses such as health services research, apart from their use by drug reps. Second, they claimed a first amendment right of free commercial speech.

The appeals court panel ruled that the state had made its case that there was a direct public benefit of prohibiting the sale of such data. The judges were persuaded by the evidence that these practices led to "the overzealous prescription of more costly brand-name drugs regardless of both the public health consequences and the probable outcome of a sensible cost/benefit analysis." They thus concluded that there was a substantial state interest in prohibiting the sale of data, and no overriding basic right of the companies to sell the data.

The companies are mulling their next legal challenges to the law, and meanwhile, especially with a more friendly administration about to take office in Washington, states considering the passage of such laws will probably be encouraged to do so.