Sorrell v. IMS Health Inc.

Brief Fact Summary.

Three Vermont data miners and an association of pharmaceutical manufacturers brought suits against the Attorney General and other officials of the State of Vermont after Vermont enacted a law that prohibited pharmacies and health insurers from selling or marketing and pharmaceutical manufacturers from marketing prescriber-identifying information without the prescriber’s consent.

Synopsis of Rule of Law.

Whenever the government creates a “regulation of speech because of disagreement with the message it conveys,” heightened scrutiny is warranted by the First Amendment.

To satisfy the heightened scrutiny, a State must show that the statute directly advances a substantial governmental interest and that the measure is drawn to achieve that interest.

Facts.

In 2007, Vermont enacted the Prescription Confidentiality Law. This law prohibits pharmacies and health insurers from selling or marketing prescriber-identifying information without the prescriber’s consent. This prohibition also disallows pharmaceutical manufacturers from such information for marketing. Vermont claims that the law protects medical privacy and reduces the likelihood that marketing will lead to prescription decisions not in the best interests of patients or the State.

Issue.

Does the Vermont law that prohibits sale, disclosure and use of pharmacy records that reveal the prescribing practices of individual doctors violate the First Amendment’s free speech guarantee?

Held.

Yes, despite Vermont’s significant interests in protecting medical privacy and facilitating best prescription decisions, speech in aid of pharmaceutical marketing is a form of expression and shall be protected by the Free Speech Clause of the First Amendment. Thus, Vermont’s law must be subjected to heightened judicial scrutiny but the law has failed to meet the standard.

Dissent.

Justice Breyer

The Vermont law affects expression in only one way. It deprives pharmaceutical and data-mining companies of data – prescriber-identifying information – that could help pharmaceutical companies create better sales messages. Such effect is connected to a legitimate State effort to regulate a commercial enterprise. When reviewing such effort, the First Amendment does not demand courts to apply a “heightened scrutiny.” In any case, our precedents tell that when the government seeks to regulate commercial speech, the statute meets the First Amendment standard.

Discussion.

On its face, Vermont’s law enacts content and speaker-based restrictions on sale, disclosure and use of prescriber-identifying information. The law prohibits sale based on the content of a purchaser’s speech and bars any disclosure when recipient speakers will use the information for marketing. Essentially, the statute burdens disfavored speech by disfavored speakers. The law is thus subject to heightened scrutiny.

However, the statute does not drawn to serve Vermont’s stated interest. Vermont argues that its physicians have a “reasonable expectation” that their prescriber-identifying information will not be used for purposes other than processing information. However, the law only prohibits the information from being marketed and this allows pharmacies to share such information with anyone. Moreover, Vermont’s stated purpose of protecting doctors from “harassing sales behaviors” has no merit because the State has failed to offer explanation why remedies other than content-based rules would be inadequate. Vermont has burdened a form of protected expression and failed to demonstrate connection between their means and ends.