Should drug marketing count as free speech?
posted Wed, 4 May 2011The Supreme Court heard arguments last week about whether data mining companies should have the right to compile and sell information about what drugs doctors are prescribing to pharmaceutical companies for use in drug marketing (Sorrell v. IMS Health, 10-779).
Pharmaceutical companies spend billions of dollars on marketing each year—even more than they spend on research and development. Marketing directly to doctors is a big part of this—they spend an average of $8,800 per physician per year.
There’s a reason for this targeted marketing. It’s very lucrative. Research from the data mining industry has shown that “winning just one more prescription per week from each prescriber yields an annual gain of $52 million in sales.”
To perfectly hone their sales pitches to doctors, pharmaceutical companies pay big bucks to data mining companies for information about what doctors are currently prescribing.
This information is not simple or cheap to compile. But pharmacies and the American Medical Association (AMA) support and benefit from the process.
Each time a prescription gets filled at a major pharmacy, that information goes into a database. That information is sold to data mining companies and aggregated. This prescription data has been stripped of consumer names but includes doctor identification numbers. When this information is combined with a list of doctors provided by the AMA, it becomes a valuable marketing tool.
Armed with this extensive collection of doctor profiles that shows specialties and prescribing patterns, sales reps aggressively target doctors in an effort to convince them to prescribe a particular drug.
The AMA has been criticized for selling this information. Most doctors aren’t even aware that this personal information is even being sold. The AMA makes a handsome profit from the sale of its doctor database each year ($44.5 million in 2006).
Data mining for prescription information brings up a host of concerns, the obvious one being privacy—not only for doctors but possibly for patients as well. Supposedly, patient names are stripped from the prescription information, but we’ve all heard of databases being compromised. And this information would obviously be very valuable to drug companies.
Privacy aside, there is also the issue of public health. Pharmaceutical companies should not be influencing what gets prescribed. Drug reps don’t have a patient’s best interests in mind, nor do they have the medical training to comprehend the risks of various treatment regimens to particular patients.
Since drug prices are at an all time high, it’s also worth mentioning that the aggressive marketing of new and brand name drugs—even when cheaper and equally effective options are available—also has a significant impact on overall drug pricing.
Vermont (and a handful of other states) has been trying to stop the process of prescription data mining. By Vermont law, physicians have to give their consent before prescribing information can be sold to companies. But this law is being challenged in our highest court. Data mining companies and PhRMA (the drug company lobby) have banded together to argue that the Vermont law limits free speech.
Unfortunately, the testimony so far seems to indicate that the justices will side with the corporations on this one. We at RxRights are not surprised by this probable outcome, but we find it ironic that big pharma’s underhanded marketing tactics would be deemed worthy of protection under the First Amendment. In any case, we will watch the Sorrell v. IMS Health case with interest.
More information on this matter:
Supremes Hear Vermont Data-Mining Case, Postscript
US top court questions state drug data limits, Reuters
Drug-Marketing Limits May Be Voided by U.S. Supreme Court in Vermont Case, Bloomberg
Supreme Court Considers Prescription Privacy Case, PBS Newshour