IMS Health, Inc. v. Ayotte: Small Step For Privacy, Giant Leap Still Needed for Prescription Data Privacy

June 16, 2012

Electronic data use in United States industries provides a means by which businesses aggregate, track, and manage consumer information. In the health care industry, data mining companies, pharmacies, and pharmaceutical manufacturers have adopted electronic data use with prescription information. The use of electronic prescription data as a commodity raises privacy concerns which have prompted the formation of state laws restricting its use. Data mining companies recently challenged a New Hampshire law restricting the commercial use of prescription data. In IMS Health, Inc. and Verispan, L.L.C. v. Kelly A. Ayotte the First Circuit held that a state has the right to prohibit the transfer, sale, and use of patient and prescriber-identifiable drug data for commercial purposes. This Recent Development examines the authority of and need for Congress to enact federal legislation to achieve effective prescription data privacy, augmenting New Hampshire’s law and ensuring privacy throughout the country. This analysis considers the effects of the court’s narrow statutory interpretation and extent to which states can curtail the commercial use of prescription data. Moreover, existing federal health information privacy protections do not go far enough to protect prescriber-identifiable data, and federal law should address the gap, especially as the health care industry transforms and data management becomes borderless.