Privacy

Sorrell v. IMS: Because Nothing Says ‘Freedom of Speech’ Like Selling Your Prescription Records

Can the sale of prescription records be protected by the First Amendment? This analysis explores Sorrell v. IMS Health, one of the Supreme Court's most influential—and controversial—privacy and commercial speech decisions.

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This case makes me sad. What makes me sad is not just the outcome, but how profoundly out of step this decision is with the values of most Americans.

Computerized records showing which physicians prescribe what drugs have long been the most potent weapon for pharmaceutical sales in the U.S. The practice of selling them is virtually unknown to consumers but is widespread.

In 2006, the leading compiler and vendor of prescription data was IMS Health, a publicly traded company based in Fairfield, Connecticut, with revenue of $1.75 billion as of 2005 — and a party to this lawsuit.

Here’s how the process works: pharmacies (and others) sell prescription records to data brokers, categorized by doctor (excluding patient information). Brokers compile the data and resell it to pharmaceutical manufacturers and marketers. Drug sales representatives — armed with detailed information about which doctors prescribe which drugs — then persuade physicians to prescribe the most profitable products. This, in turn, drives up drug prices and related Medicaid costs.

Drug companies use these data to decide which doctors to reward with gifts, meals, and other perks, and which ones to sign as paid speakers or consultants.

From a legal perspective, patient information is protected under U.S. federal healthcare privacy law — the Health Insurance Portability and Accountability Act (HIPAA) and related statutes — and under state healthcare privacy laws. But those protections do not extend to doctors’ prescribing data.

The practice is widely opposed by doctors. A Gallup poll commissioned by the American Medical Association in 2004 found that two-thirds of physicians surveyed opposed the release of prescription data to pharmaceutical representatives.

Through this case, the U.S. Supreme Court made it impossible for the States or the Federal Government to require the consent of physicians before their prescribing information could be bought and sold. The Court held that such a requirement would restrict the freedom of speech of pharmacies and pharmaceutical companies — treating the sale and use of this data as a form of protected expression under the First Amendment.

I can’t help but think that if we could resurrect the actual “Founding Fathers” for one day and ask them to vote on this case, the decision likely would have gone the other way — by a landslide. The “Founding Mothers” (if there was such a thing — and I suppose there was, maybe in the shadows but still there,) I am certain would not have granted constitutional protection as “freedom of speech” to a commercial practice that has been proven to fuel drug addiction in America. In the end, it’s up to all of us to change this for our children. And I hope we do.

This case in a nutshell

In 2007, Vermont enacted the Prescription Confidentiality Law (Vt. Stat. Ann., Tit. 18, § 4631), which prohibited pharmacies from selling or using records revealing the prescribing practices of individual doctors for marketing purposes without the doctor’s consent.

In a 6–3 decision authored by Justice Anthony Kennedy — with Justice Breyer dissenting, joined by Justices Ginsburgand Kagan — the Supreme Court struck down the law on June 23, 2011.

Why? The Court held that requiring pharmacies to obtain doctors’ consent before selling records of their prescribing practices was an unconstitutional restriction on the freedom of speech of pharmacies and data brokers who bought and resold the information.

Case Overview

Citation: Sorrell v. IMS Health Inc., 564 U.S. 552 (2011)
Decided: June 23, 2011
Majority Opinion: Justice Kennedy (joined by Roberts, Scalia, Thomas, Alito, Sotomayor)
Dissent: Justice Breyer (joined by Ginsburg and Kagan)

At issue was whether Vermont’s Prescription Confidentiality Law(Vt. Stat. Ann., Tit. 18, § 4631) — which prohibited the sale, disclosure, or use of pharmacy records revealing individual doctors’ prescribing practices for marketing without the doctor’s consent — violated the First Amendment.

Legislative Context

The law followed a 2006 Vermont Medical Society resolution titled “Ensuring the Privacy of Prescription Information.”The Society urged legislators to stop the sale of prescribing histories to drug marketers, calling the practice “an intrusion into the way physicians practice medicine.” Vermont’s statute mirrored New Hampshire’s earlier effort to block commercialization of prescribing data.

The statute barred:

Pharmacies, insurers, and similar entities from selling or licensing prescriber-identifiable data.
Pharmaceutical manufacturers and marketers from using such data for marketing.
Exceptions permitted disclosure for “health care research,” insurance compliance, or public health reporting

The law was enacted in response to Ensuring the Privacy of Prescription Information, an October 14, 2006 resolution by the Vermont Medical Society that identified the dangers of existing practices and included a commitment to work with the Attorney General and the Vermont Legislature to enact “legislation, similar to legislation recently enacted in New Hampshire that would prohibit the disclosure of physician’s prescribing information for any commercial purpose while permitting legitimate uses such as reporting requirements and research.”

Facts and Procedural History

Data-mining firms (IMS Health and others) and brand-name drug manufacturers sued, claiming the law restricted their ability to engage in pharmaceutical marketing and thus infringed their free-speech rights.

District Court (D. Vt. 2009): Upheld the law.
Second Circuit (2010): Reversed, finding the law burdened commercial speech.
Supreme Court: Granted certiorari to resolve a split with the First Circuit, which had previously upheld similar laws in Maine and New Hampshire

Majority Opinion (Justice Kennedy)

Key Holding:
The Court struck down Vermont’s law as an unconstitutional, content- and speaker-based restriction on speech. It held that:

Heightened scrutiny applied.
The law disfavored specific speakers (pharmaceutical marketers) and specific content (marketing speech) while allowing others to use the same information for favored purposes like “research” or “public health.” Such targeting required heightened judicial scrutiny.
Information as speech.
The Court rejected Vermont’s argument that data-sharing was mere commercial conduct. “The creation and dissemination of information are speech within the meaning of the First Amendment,” Kennedy wrote.
Justifications failed scrutiny.
Vermont’s two stated interests — (a) protecting physician confidentiality and (b) improving public health and lowering costs — were deemed insufficient. The statute was too underinclusive: the same data could be shared freely for research or state-sponsored counter-marketing, undermining its claimed privacy rationale.
Viewpoint discrimination.
The Court found the law’s true effect was to suppress marketing speech that conflicted with the state’s policy goals of encouraging generic drug use.

Dissent (Justice Breyer)

Justice Breyer viewed the law as a legitimate economic regulation, not a speech restriction.
He argued that:

The law’s “modest” impact on expression was outweighed by the state’s public health and cost-control objectives.
Applying strict First Amendment scrutiny to ordinary regulation would give courts undue power to strike down routine legislative programs.
Breyer warned that turning data-privacy or marketing regulations into First Amendment cases risks “constitutionalizing” vast areas of commercial law.

Broader Implications

Commercial Speech Expansion: Sorrell marked a significant expansion of First Amendment protection for corporate and data-driven speech, building on Virginia Pharmacy Board v. Virginia Citizens Consumer Council(1976) and Central Hudson Gas & Electric Corp. v. Public Service Commission (1980).
Data Privacy vs. Free Speech: The ruling framed data about prescribing habits — even when anonymized of patients — as protected information flow, complicating state efforts to regulate data brokerage.
Post-Sorrell Landscape: The decision has been cited in challenges to restrictions on data collection, targeted advertising, and consumer-information markets, influencing debates over privacy laws and algorithmic regulation.