The old adage “it’s not what you know but who you know” has been turned on its head because data mining information has become the raison d'etre. Companies spend millions to obtain, manage and control customer information, considered by many to be the ‘lifeblood of marketing’. With the recent growth of Face book, Twitter and other social marketing mediums, it is becoming clear that customer information or profiles are at the root of advertising messages and promotions as we move into the next phase of our economy.
The problem? Some of that information is ‘private’ and should not be shared. The issue? Making that determination.
HIPAA (The Health Insurance Portability and Accountability Act), was passed in an attempt to regulate the use and transfer of information about medical patients and their records. HIPAA recognized that as we moved further into the creation of automated data systems, patient records would contain immense volumes of data that could be commercialized, easily revealing information long considered private.
Despite the intent of HIPAA, many other medical care providers have been looking for ways to mine or commercialize related data so that marketing campaigns could be more targeted and effective. One method involved obtaining information from pharmacists concerning the prescription practices of the physicians while omitting patient identifying information.
The US Supreme Court held, in Sorrell v. IMS Health Inc. (June 23, 2011), that a Vermont law that precluded pharmacies from selling information on physician drug-prescribing practices for marketing purposes violated the First Amendment of the Constitution. The exchange of information about the prescriber (rather than the patient), more than regulating a commodity transaction, involves protected “commercial speech”. The State of Vermont had asserted that the law was necessary to protect medical privacy.
Conclusions of the Court
The test applied by the Court requires that the government prove that the regulation “advances a substantial governmental interest and that the measure is drawn to achieve that interest.” The Court determined that the law was not needed to protect medical privacy because the prescriber data did not contain any patient information (confidential or otherwise) and the State already allowed the exchange of this type of information for other than marketing purposes. Enforcement of the law would have created a class of “disfavored speakers”, the brand name drug marketers, which would have been unconstitutional.
Additionally, the Court also rejected the State’s claim that a ban on marketing information was required to protect the physicians from unsolicited marketing efforts and/or attempts to get them to use low-cost generic drugs. These purposes could be better achieved by using far less restrictive measures at the States disposal.
The Court did acknowledge that given current technology capabilities to data mine personal information from both non-governmental and governmental records that there remained serious issues regarding personal privacy that were not addressed by the State of Vermont. The dissenting judges discussed the concept that data mining can be used for “secret and manipulative activities” by marketers.
The Take Away?
The Court may have left the door open for a broader attack on the unrestricted concept of data mining and privacy. It is unclear today which concept will emerge victorious; a more restrictive environment regarding privacy or whether commercial free speech, which seems to be an area that the current Court is expanding, will continue it’s increased position in public policy.
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