Courts Will Have to Decide Who Owns Prescription Data

A parent who had his two daughters' prescriptions filled through a Walgreen Company drugstore has sued the company, charging that it had no legal right to sell the girls' prescription information to so-called data-mining companies that then sell it to pharmaceutical companies for marketing purposes.

In the class-action suit, which was filed in California in March, plaintiff Todd Murphy insists that such information is the property of the patient who pays for the prescription, and thus Walgreen sold something it did not own. This is a change of tactics from other lawsuits challenging the legality of data-mining practices, which were based on breaches of confidentiality of physician prescribing information.

As an indication of the value of the information Walgreen sells to data-mining companies, Murphy's suit indicates that Walgreen put a 2010 value of $749 million on the data in the company's report to the Securities and Exchange Commission, according to a March 11 report from Reuters. The suit was filed in California Superior Court, County of San Diego [Murphy et al. v. Walgreen Corp. et al., San Diego Superior Court, No. 37-2011-87162].

The information Walgreen sells to data-mining companies does not cite the name of a patient for whom a medication was prescribed, but does include, in addition to the name of the medication, the patient's gender, age group, and state of residence, as well as the ID number of the physician who wrote the prescription.

Murphy's suit against Walgreen is not the only recent one challenging the legality of selling prescription data. On March 7 the Philadelphia Federation of Teachers Health and Welfare Fund and Pennsylvania resident Arthur Steinberg sued CVS Caremark Corp., parent of the huge CVS drugstore chain, for allegedly selling customers' private information to four major pharmaceutical companies—Lilly, Merck, Astra-Zeneca, and Bayer.

The plaintiffs maintain that CVS profited from the sale of "confidential prescription information obtained from consumers and third-party payors purchasing or reimbursing prescriptions filled by" CVS, a practice that under Pennsylvania law "constitutes unfair and deceptive practices ... as well as unjust enrichment."

Specifically, the civil suit alleges that "in exchange for the receipt of funds, direct promotional letters were sent to physicians of consumers by Defendant CVS Caremark in order to promote and tout specific prescription drugs of pharmaceutical manufacturers who contract with [CVS] for the sale and/or use of prescription information."

The plaintiffs, who are seeking financial damages from the company and return of profits earned through this practice, want the court to grant their suit class-action status [Arthur Steinberg and Philadelphia Federation of Teachers Health and Welfare Fund v. CVS Caremark Corporation, Philadelphia Court of Common Pleas, No. 110300253].

In another case arising from prescription-related data-mining practices, in January the U.S. Supreme Court agreed to hear an appeal from Vermont regarding that state's law banning third-party access to physician prescribing data. A federal appeals court had struck down the law in November 2010, ruling that it violated the data-mining companies' commercial free-speech rights. Vermont had argued that its data-mining prohibition did not restrict constitutionally protected free speech, but rather the buying and selling of a commodity, namely prescribing data, which is within a state's regulatory rights (Psychiatric News, February 4).

Prior to the appeals court's rejection of the Vermont law's constitutionality, however, another federal appeals court had upheld the constitutionality of data-mining laws in New Hampshire and Maine.