Law Restricting Drug Marketing Overturned

The U.S. Court of Appeals for the Second Circuit in New York has ruled as unconstitutional a Vermont law banning the sale, transmission, or use of prescriber-identifiable data for marketing or promoting a prescription drug unless the prescriber consents.

Drug database firms IMS Health Inc., Verispan LLC, and SDI Health LLC, along with the Pharmaceutical Research and Manufacturers of America trade association, filed the suit.

The appeals court, with one dissenting judge, overturned a U.S. District Court in Vermont ruling that the statute was constitutional. The district court judge, citing precedent in an earlier case between a New York utility (Central Hudson) and the state regulatory agency, found the disputed section of the Vermont law to be a constitutional restriction on commercial speech and not in violation of the Commerce Clause of the U.S. Constitution.

The appeals court disagreed. "We conclude that because section 17 is a commercial speech restriction that does not directly advance the substantial state interests asserted by Vermont, and is not narrowly tailored to serve those interests, the statute cannot survive intermediate scrutiny under Central Hudson," the Appeals Court ruled. "Therefore, we reverse and remand the judgment of the district court."

While more than 100 bills similar to the Vermont law have been introduced in state legislatures, only two other states--Maine and New Hampshire--have enacted such bills into law, according to SDI Health.

The Court of Appeals decision is available at http://courtlistener.com/ca2/VqT/ims-health-inc-v-sorrell/.

--Joseph Goedert