On June 23, 2011, the Supreme Court decided Sorrell v. IMS Health Inc., No. 10-779, holding that Vermont's justifications for a law limiting the sale and use of prescriber-identifying information did not withstand heightened scrutiny.
Vermont's Prescription Confidentiality Law, Vt. Stat. Ann., Tit. 18, § 4631(d), provides that, absent a drug prescriber's consent, prescriber-identifying information may not be sold by pharmacies and similar entities, disclosed by those entities for marketing purposes, or used for marketing by pharmaceutical manufacturers. The law hindered a process called "detailing," which pharmaceutical manufacturers use to promote their drugs to doctors. As part of the process, pharmacies that receive "prescriber-identifying information" sell such information to data miners, who in turn lease reports on prescriber behavior to pharmaceutical manufacturers. "Detailers" employed by the manufacturers then use the reports to better market drugs to doctors.
Data miners and an association of brand-name drug manufacturers sought declaratory and injunctive relief against state officials, contending that the law violated their free speech rights under the First Amendment. The district court denied relief, but the Second Circuit reversed, finding an unconstitutional burden on speech without adequate justification.
The Supreme Court affirmed, even as it acknowledged that "[t]he capacity of technology to find and publish personal information . . . presents serious and unresolved issues with respect to personal privacy and the dignity it seeks to secure."
The Court first held that the statute imposed content- and speaker-based burdens on protected expression—it disfavored marketing as well as detailers engaged in marketing—and was thus subject to heightened scrutiny. In so holding, it rejected Vermont's arguments that the statute was a mere commercial regulation, that it was akin to a restriction on access to government-held information, and that it regulated conduct rather than speech. The Court held that "information is speech," so that government cannot ban or regulate the sale of information with the same discretion that it could regulate the sale of goods like beef jerky.
The Court then held that the statute did not withstand heightened scrutiny—indeed, that it would not withstand even a special commercial speech inquiry. Vermont argued that the statute (1) was necessary to protect medical privacy, including physician confidentiality, avoidance of harassment and the integrity of the doctor-patient relationship and (2) was integral to the achievement of certain health-care related policies. The Court assumed that these might be legitimate governmental interests, yet found the statute was not designed to advance them. As to the first, it noted that pharmacies could share prescriber-identifying information with anyone for any reason except for marketing, which undercut Vermont's claim that the statute protected physician confidentiality. Likewise, the Court held that the statute was not necessary to help physicians avoid harassment, as they could simply decline to meet with detailers. As for the potential that detailers might impact treatment decisions, the Court held that the mere fear that speech might persuade is not a lawful basis to quiet it.
For similar reasons, the Court also found that the statute did not permissibly advance Vermont's second interest—achieving certain health-care related policies. Vermont sought to diminish detailers' ability to influence prescription decisions, but the Court held that the possibility that people will make bad decisions if given truthful information cannot justify content-based burdens on speech, especially when the audience consists of sophisticated and experienced physicians.
Justice Kennedy delivered the opinion of the Court, in which Chief Justice Roberts and Justices Scalia, Thomas, Alito, and Sotomayor joined. Justice Breyer filed a dissenting opinion, in which Justices Ginsburg and Kagan joined.