WASHINGTON (AP) – When most patients go to the pharmacy to fill a new prescription, they don’t think twice about turning over the note from their doctor.

After all, how much could the scrawled handwriting on that tiny slip be worth?

Not much to the average consumer – but to the world’s largest drugmakers, the information is an invaluable sales tool that they use to track which drugs individual doctors are prescribing all across the country.

Companies like IMS Health Inc. have built an industry around gathering prescription data and selling the information to pharmaceutical companies for millions of dollars each year. Pfizer Inc., Merck & Co. Inc. and nearly every other drugmaker uses the data to identify which doctors are prescribing their drugs and which are prescribing the competition. When freebie-wielding salespeople show up at their offices, most doctors don’t know they’re being targeted based on their own prescribing habits.

But the political tide may be turning against IMS Health and competitors like Verispan, a unit of Surveillance Data Inc. After years of steady growth, they are fighting against laws in three New England states to keep prescribing information out of their hands.

Judges in Maine and New Hampshire have handed the companies early victories, declaring laws aimed at stopping the commercial use of prescription data unconstitutional. But an impending decision by a federal appeals court could overturn those actions and open the door to more restrictions nationwide.

As many as 18 states considered data restrictions this year, though analysts said they held off to see if New Hampshire’s law survives legal scrutiny.

The challenges to so-called data-mining companies are part of a larger backlash against pharmaceutical marketing efforts, which involve courting doctors with gifts, meals and other perks.

State advocates say the sales push drives up the cost of health care by convincing doctors to prescribe the latest, most expensive medications – instead of cheaper, sometimes better, options.

“Obviously these companies want doctors to prescribe the medicines they’re marketing,” said New Hampshire Assistant Attorney General Laura Lombardi. “We want doctors to make their decisions based solely on their best medical judgment, rather than the best interests of pharmaceutical manufacturers.”

IMS Health executives argue that without their products drug companies would have to hire even larger sales forces, because they wouldn’t be able to target their efforts.

But state lawmakers note that in the decade since 1993, when IMS launched its prescription tracking system, spending on drug promotion rose 300 percent and company sales forces doubled to more than 100,000 representatives.

“The word for how I felt is ‘violated,”‘ said Dr. Gary Sobelson, a New Hampshire doctor who supports the data restriction efforts. “They knew things about my prescribing habits that I didn’t know myself.”

Attorneys for New Hampshire and Maine say their laws, which ban or limit the sale of prescription data, protect the privacy of doctors and patients. But judges in both states rejected that argument, noting that all patient names are deleted from prescribing records. They also said that restricting access to the information violates the First Amendment guarantee to free speech. Vermont delayed implementing its own law until 2009, after seeing the challenges its neighbors faced.

“We have no privacy issues here,” said Randolph Frankel, vice president with Norwalk, Conn.-based IMS Health. “What we do have are organizations using this as a platform for their own political agendas,” He said national groups, including AARP, continue supporting the data restriction effort despite court judgments against it.

The 1st U.S. Circuit Court in Boston heard an appeal of New Hampshire’s case earlier this year and is expected announce a decision this month. If the court decides the law is in fact constitutional, it could open the flood gates to similar efforts across the country.

And while no federal lawmakers are discussing a national ban on data mining, the issue has attracted scrutiny from some on Capitol Hill.

Sen. Herb Kohl has begun pressing the American Medical Association about its role in helping data-mining companies identify individual doctors.

After IMS and other companies buy prescribing data from pharmacies, they rely on AMA’s databases to match the numbers with individual physician identities. The AMA generated more than $46 million from the sale of database information last year.

But the group pointed out in an April letter that doctors can ask that their information not be shared with drug salespeople. Kohl fired back, noting that less than a third of physicians are aware of that option. The Wisconsin Democrat, who chairs the Senate Committee on Aging, is pressuring the group to make it easier for doctors to keep their prescribing information confidential.

“By selling data that allows pharmaceutical sales representatives to see which doctors are prescribing which drugs, the AMA is giving drugmakers what they need to exert more influence,” Kohl said.

With controversy swirling around its pharmaceutical industry business, IMS has begun highlighting other uses for its data, including government and academic research. Frankel said government demand for prescribing data will only increase as policymakers across the country try to control mounting health care costs.

“What we’ve done has served the public extraordinarily well over the last decade, but the reality is that cost has become an issue,” Frankel said. “That’s changed the paradigm and we are changing with it.”

AP-ES-08-19-08 1440EDT

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