IMS Health Inc. v. Ayotte (Summary)

FREE SPEECH

IMS Health Inc. v. Ayotte, No. 07-1945 (1st Cir. Nov. 18, 2008)

The United States Court of Appeals for the First Circuit reversed the decision of the district court and held that New Hampshire’s Prescription Information Law, which banned the transfer and use of data on a physician’s prescribing histories, did not violate the Free Speech Clause of the First Amendment or the Commerce Clause.

The law is aimed at "data miners" or companies that buy data on physician prescribing histories from pharmacies and then sell those histories to pharmaceutical companies which, in turn, distribute them to their sales representatives to target certain physicians. The purpose of the law is to curb the inducement of physicians to prescribe expensive brand-name drugs in place of equally effective but less costly generic drugs. The First Circuit found that the data transfers the law seeks to regulate were restrictions on conduct and not speech and, thus, constitutionally valid. In the alternative, even if the law was treated as a restriction on protected speech, it was nonetheless constitutional because it is no more restrictive than necessary to accomplish the state’s substantial interest in reducing health care costs. Finally, the law was not violative of the Commerce Clause of the Constitution because it did not regulate conduct outside the state nor did it require out-of-state commerce to be conducted according to the terms of New Hampshire.