Once again, a drug-related legal battle stands to change the business landscape. The Supreme Court may hear a pharma case--namely, a court fight over data-mining--that could revamp the way all sorts of businesses gather and use consumer information, BusinessWeek reports. At the heart of the case is IMS Health, that enterprising data-collector that amasses information on physician prescribing practices and sells it to drugmakers for their marketing pleasure.
State legislatures have been questioning whether IMS's data-mining is in fact constitutional. And the firm has been fighting a case in New Hampshire, which passed a law in 2006 to bar companies from collecting data on which drugs specific doctors prescribe and then using that info as a sales tool. New Hampshire's AG says that collecting scrip data endangers physician and patient privacy, even though patients' personal info is kept anonymous. IMS and fellow data-collector Verispan sued to challenge the law on First Amendment grounds.
A U.S. circuit court upheld the New Hampshire law late last year, ruling that data and speech aren't the same thing. In this case, data amounts to a product, just like beef jerky, Judge Bruce Selya said, and states have the right to govern companies' sale of goods.
Enter the Supreme Court. If the justices decline to hear the case, that Circuit Court ruling will stand, perhaps inspiring other states to restrict data collection and sales--which could have wide-ranging consequences. "This issue far transcends prescription drugs," Dan Jaffe, executive vice-president at the Association of National Advertisers, told BusinessWeek. "In a difficult economy, virtually every segment of the business community is concerned about preserving the ability to use marketing dollars in an efficient way."
- read the BusinessWeek article