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Supreme Court Health Data Case Could Sway Online Privacy Debate

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The Supreme Court has announced it will hear Sorrell v. IMS Health, a case relating to the sale of health data. Though not obvious at first glance, it’s a case that’s likely to have some influence on the growing debate over online privacy. In the case, pharmaceutical and data-mining companies are pushing back against a Vermont regulation that prohibits the selling of certain prescription information. The corporations’ argument in the case-that buying and selling of consumer data is really a form of commercial “free speech”-may well mirror the tactic that ad-tech companies could take if they decide to mount a legal challenge to new regulations around online privacy that they see as onerous.

So far, the battle against these new “prescription privacy” laws, which have passed in Vermont, Maine and New Hampshire, has produced mixed results — so what the Supreme Court has to say will likely be decisive.

The controversial practice of selling prescription information works like this: Three big data-mining companies-IMS Health, VeriSpan, and a division of Wolters Kluwer –purchase data about which doctors prescribe what drugs to patients. The data doesn’t include patients’ names, but it does include the names of individual doctors. They then match that data with database information purchased from the American Medical Association, which allows drug companies to create powerful sales software programs with detailed information that helps their sales force craft individualized pitches to doctors. In particular, it helps drug companies look for doctors most likely to quickly adopt new drugs.

Even though the data being bought and sold here doesn’t include patient names, advocacy groups like the Electronic Privacy Information Center (EPIC) object to it, saying that “the data miners’ de-identification practices do not, in fact, protect patient privacy.” The patient records at issue contain more than enough data to be “re-identified” if someone chose to do so, EPIC says.

Three states-New Hampshire, Vermont, and Maine-have passed “prescription privacy” laws in recent years, banning the data-mining companies from collecting information about doctors’ prescription records for drug-marketing purposes. The data-mining companies, joined by a pharmaceutical trade group, have challenged all three, saying that the database transactions are actually a constitutionally-protected form of corporate “free speech.” The state laws for New Hampshire and Maine, which are part of the 1st Circuit of U.S. appeals courts, were upheld. But in November, the data-mining companies were able to win a victory at the U.S. Court of Appeals for the 2nd Circuit, which covers Vermont. With two appeals courts clearly in conflict on the issue, the Vermont Attorney General asked the Supreme Court to take the case, and it agreed to do so last week.

So how does this all affect online privacy? Well, if regulations are passed limiting some of the more controversial practices in online privacy-such as tracking internet users, and sharing or selling their browsing data-it looks like the argument that such transactions are part of corporate free speech rights may well be the go-to defense for corporations.

The issue of corporate free speech is a dynamic, and politically hot, area of the law right now. Most notably, in the recent Citizens United decision, a 5-4 conservative majority of the Supreme Court ruled that corporate spending in political campaigns should be practically without limit, because otherwise it would interfere with a corporation’s “free speech” rights, which are worthy of protection just as an individual’s rights are.

It’s tough to predict how the high court might come down on the corporate free speech issue in the context of prescription databases. The fact that they declined to take the case when the data-mining companies lost suggests they weren’t overly upset by that result; but at the same time, the Citizens United decision indicates a majority of justices are willing to give corporate free speech broad leeway. It will be interesting to see if the corporate free speech rights the court upheld in the context of an election seem as compelling to the justices when those similar speech rights are being used to defend the practice of aggregating medical data to find the doctors most susceptible to pitches for new drugs.

»  Supreme Court documents for the Sorrell v. IMS Health case are available via SCOTUSblog

»  Also read: Ruling favoring IMS Health By U.S. Court of Appeals for the 2nd Circuit [PDF]

»  Friend-of-the-court brief by EPIC privacy organization [PDF]