UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

IMS Health Incorporated, et. al.

v. Case No. 06-cv-280-PB

 Opinion No. 2007 DNH 061 P

Kelly Ayotte, as Attorney General

 of the State of New Hampshire

MEMORANDUM AND ORDER

A lucrative market has developed in recent years for data

identifying the prescribing practices of individual health care

providers (“prescriber-identifiable data”). Pharmacies acquire

prescription data in the ordinary course of business. Data

mining companies such as the plaintiffs in this case, IMS Health

Incorporated and Verispan, LLC, purchase the prescription data, 

remove information identifying patients before it leaves the

pharmacy, combine what remains with data from other sources, and

sell the combined data to interested purchasers. The data

miners’ biggest clients by far are pharmaceutical companies,

which use the data to develop marketing plans targeted to

specific prescribers. 

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1 All factual findings in this Memorandum and Order are

based on evidence produced at trial. The facts have been

established by a preponderance of the evidence.

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The New Hampshire Legislature recently enacted a law that

bars pharmacies, insurance companies, and similar entities from

transferring or using prescriber-identifiable data for certain

commercial purposes. See 2006 N.H. Laws § 328, codified at N.H.

Rev. Stat. Ann. §§ 318:47-f, 318:47-g, 318-B:12(IV) (2006) 

(“Prescription Information Law”). IMS and Verispan have filed

this action contending that the new law impermissibly restricts

their First Amendment right to free speech.

In this Memorandum and Order, I explain why the new law

violates the First Amendment.

I. FACTS1

A. Prescription Information Collection

Approximately 1.4 million licensed health care providers are

authorized to write prescriptions in the United States for

approximately 8,000 different pharmaceutical products in various

forms, strengths, and doses. These prescriptions are filled by

approximately 54,000 retail pharmacies and other licensed medical

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facilities throughout the United States. 

Retail pharmacies acquire prescription data during the

regular course of business. For each prescription filled, a

record is kept that includes the name of the patient, information

identifying the prescriber, the name, dosage, and quantity of the

prescribed drug, and the date the prescription was filled. If

the pharmacy is part of a larger organization with multiple

retail outlets, each outlet’s prescription data is ultimately

aggregated with data from other outlets and stored in a central

location. 

B. Plaintiffs’ Acquisition of Prescription Information

IMS and Verispan are the world’s leading providers of

information, research, and analysis to the pharmaceutical and

health care industries. IMS, the largest business in the field,

purchases prescriber information from approximately 100 different

suppliers. Verispan, a company roughly one-tenth the size of

IMS, obtains its information from approximately thirty to forty 

suppliers. Plaintiffs collectively acquire and analyze data

from billions of prescription transactions per year throughout

the United States. 

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Plaintiffs purchase prescriber-identifiable data from

participating pharmacies and other sources. To comply with state

and federal laws protecting patient privacy, participating

pharmacies allow plaintiffs to install software on their

computers that encrypts any information identifying patients

before it is transferred to plaintiffs’ computers. After patient

information is “de-identified” in this way, a number is assigned

to each de-identified patient that permits prescription

information to be correlated for each patient but does not allow

the patient’s identity to be determined. The prescription

information is then transferred to the plaintiffs’ computers

where it is combined with data from other sources and made

available to plaintiffs’ customers. IMS and Verispan obtain all

of their prescription information, including information on

prescriptions filled in New Hampshire, from computers that are

located outside of New Hampshire. 

One way in which plaintiffs add value to prescriberidentifiable data is to combine it with prescriber reference

information. This allows plaintiffs to, among other things,

match each prescription to the correct prescriber, identify and

use the prescriber’s correct name, and add address, specialty,

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and other professional information about the prescriber to the

prescription data. Prescriber reference files are created using

information obtained from various sources, including the American

Medical Association’s (“AMA”) Physician Masterfile. The AMA’s

Masterfile contains demographic, educational, certification,

licensure, and specialty information for more than 800,000 active

U.S. medical doctors and over 90 percent of osteopathic doctors. 

Plaintiffs use the patient de-identified prescription data,

together with the reference file data, to produce a variety of

patient de-identified databases. 

The AMA recently adopted a program that gives participating

health care providers the power to limit access to their

prescribing information (“the Prescribing Data Restriction

Program” or “PDRP”). Under the PDRP, pharmaceutical companies

are permitted to acquire prescriber-identifiable data for

participating providers but they may not share the information

with their sales representatives. IMS and Verispan participate

in the PDRP and require their customers to abide by its terms. 

C. Uses of Prescription Information by Pharmaceutical Companies

Plaintiffs’ biggest clients by far are pharmaceutical

companies. According to IMS’s 2005 Annual Report, “[s]ales to

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2 Plaintiffs also make prescriber-identifiable data

available at little or no cost for non-marketing purposes to

academic researchers, medical researchers, humanitarian

organizations, and law enforcement authorities. These entities

use the information to track patterns of disease and treatment,

conduct research and clinical trials, implement best practices,

and engage in economic analyses.

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the pharmaceutical industry accounted for substantially all of

[IMS’s] revenue in 2005, 2004 and 2003.” Approximately 95

percent of Verispan’s sales of prescriber-identifiable data are

to pharmaceutical companies. Plaintiffs also provide

prescriber-identifiable information to biotechnology firms,

pharmaceutical distributors, government agencies, insurance

companies, health care groups, researchers, consulting

organizations, the financial community, manufacturers of generic

drugs, pharmacy benefit managers, and others. Some of these

entities use, license, sell, or transfer the information for

advertising, marketing, and promotional purposes, while others

use the information for non-commercial purposes.2 

Pharmaceutical companies commit vast resources to the

marketing of prescription drugs. In 2000, the pharmaceutical

industry spent approximately $15.7 billion on marketing, $4

billion of which was dedicated to direct-to-physician strategies. 

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More recent estimates suggest the industry currently spends

between $25 billion and $30 billion per year on marketing. The

large pharmaceutical companies spend roughly 30 percent of their

revenues on promotion, marketing, and administration, while

spending only approximately 13 percent on research and

development. 

Pharmaceutical companies market to both consumers and

prescribers. Companies rely primarily on print and television

advertising to reach consumers and depend more heavily on a

variety of direct marketing techniques to reach health care

providers. Among the companies’ direct marketing practices that

are most relevant to this case are their efforts to enlist the

support of “thought leaders” in the medical community and their

use of “detailing” to persuade individual health care providers

to prescribe specific brand-name drugs.

1. Thought Leaders

Thought leaders are physicians and researchers whose views

are accorded special weight in the medical community. 

Pharmaceutical companies enlist the support of thought leaders by

sponsoring their research, retaining them to serve as consultants

and speakers, and entertaining them at dinners and other events. 

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Although thought leaders rarely, if ever, are paid to endorse

particular drugs, their tacit support is deemed by pharmaceutical

companies to be highly valuable in persuading others to prescribe

their products. 

2. Detailing

Pharmaceutical detailing generally involves the provision of

promotional and educational information during face-to-face

contact between sales representatives and health care providers. 

Sales representatives provide prescribers with both written and

oral information about particular drugs in an effort to persuade

them to prescribe the drugs being detailed. They also offer

prescribers free samples that can then be distributed to patients

at no charge. Because many prescribers are reluctant to meet

with sales representatives, small gifts, free meals, and other

inducements are also frequently offered to health care providers

and their staffs in an effort to facilitate access and encourage

receptivity to the representative’s sales pitch. 

a. Promotional Information

Pharmaceutical companies strictly control the information

that detailers are authorized to present on their behalf. 

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3 For purposes of the study, an inaccurate statement was

defined as one that met all three of the following criteria: (i)

the statement clearly contradicted prescribing information in the

1993 Physicians’ Desk Reference or literature quoted or handed

out by the detailer; (ii) a pharmacist and a physician-clinical

pharmacologist independently assessed the statement as incorrect;

and (iii) a search of reference books, drug company brochures,

and MEDLINE files from 1985 through 1993 provided no support for

the statement. Seven of twelve pharmaceutical sales

representatives in the study made a total of twelve inaccurate

statements in their presentations. All twelve inaccurate

statements were about the drug being promoted, and all cast that

drug in a favorable light. 273 JAMA at 1296-98. 

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Although sales representatives generally provide prescribers with

accurate information, misstatements and omissions do occur. A

1995 study published in the Journal of the American Medical

Association concluded that 11 percent of the in-person statements

made to physicians by pharmaceutical sales representatives 

contradicted information that was readily available to them.3

Michael G. Ziegler, Pauline Lew, and Brian C. Singer, The

Accuracy of Drug Information From Pharmaceutical Sales

Representatives, 273 JAMA 1296, 1296-98 (1995). 

The Federal Food and Drug Administration (“FDA”) has broad

authority to regulate drug advertisements and promotional

labeling. See, e.g., Federal Food, Drug, and Cosmetic Act, 21

U.S.C. §§ 331(a), 352 (2000); FDA Prescription Drug Advertising

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Rule, 21 C.F.R. § 202.1 (1999). Existing regulations prohibit

prescription drug advertising and labeling information that is

false, misleading, or that lacks a “fair balance between

information relating to side effects and contra-indications and

information relating to effectiveness . . .” 21 C.F.R. §

202.1(e)(5)-(6). The agency is authorized to take enforcement

action against companies that use false and misleading

advertising materials. 21 U.S.C. §§ 332-337. This regulatory

authority also extends to oral misrepresentations by sales

representatives. See, e.g., FDA Priv. Ltr. Warning, available at

http://www.fda.gov/cder/warn/sep2000/dd9199.pdf (warning to cease

false and misleading oral statements by sales representatives).

b. Sampling 

Product sampling is widely used in the marketing of

prescription drugs. Published reports estimate that the total

annual retail value of sampled drugs exceeds $11 billion. 

Product sampling programs permit sales representatives to use

sampled drugs as inducements to facilitate access to prescribers. 

They also promote sales by allowing prescribers to become

familiar with the sampled drugs and by increasing the likelihood 

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that patients will continue to request prescriptions for sampled

drugs after their samples have been consumed. Many physicians

accept samples because it allows them to provide free medications

to patients who might not otherwise be able to afford them.

c. Gifts, Meals and Other Inducements

Prescribers are often reluctant to meet with sales

representatives. In an effort to overcome this reluctance, sales

representatives provide health care providers and their staffs

with small gifts, free meals, and other inducements. In addition

to facilitating access, such inducements help sales

representatives build relationships with prescribers that can

make them more receptive to the product information that sales

representatives provide. 

The Pharmaceutical Research and Manufacturers of America

(“PhRMA”) has adopted a voluntary “Code on Interactions with

Health care Professionals,” available at http://www.phrma.org/

files/PhRMA%20Code.pdf, in an effort to address public concern

with gift-giving by sales representatives. The 56-page Code

contains aspirational guidelines that are intended to ensure that

“[i]nteractions should be focused on informing healthcare 

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professionals about products, providing scientific and

educational information, and supporting medical research and

education.” Id. at 5. Although the PhRMA Code permits members

to hire health care providers to serve as consultants and

speakers, id. at 10-13, it discourages members from otherwise

offering inducements directly to health care providers unless

either the value of what is provided is insubstantial (less than

$100) and the inducement is primarily for the benefit of

patients, or the value of the inducement is minimal and the

inducement is directly related to the provider’s practice. Id.

at 17. For example, an occasional gift of a stethoscope is

acceptable under the Code because it is not deemed to be of

substantial value and the gift benefits patients. Id. at 23. In

contrast, an unrestricted gift certificate to a local bookstore

may not be offered under the Code regardless of its value because

it does not benefit patients and is unrelated to the health care

professional’s practice. Id. at 33. The Code draws similar

distinctions with respect to meals and entertainment. Id. at

28-37.

Pharmaceutical companies are not obligated to follow the

PhRMA Code in New Hampshire. Nevertheless, the United States

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4 The anti-kickback statute, 42 U.S.C. § 1320a-7b(b)(2),

makes it a federal crime to pay a health care provider to order

something for which payment may be made under a federal health

care program.

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Department of Health and Human Services, Office of Inspector

General (“OIG”) has endorsed the Code in guidance it has offered

to companies concerning the need for internal compliance programs

in the health care industry. OIG Compliance Program Guidance for

Pharmaceutical Manufacturers, 68 Fed. Reg. 23731-01 (proposed May

5, 2003). As the guidance states, “[a]lthough compliance with

the PhRMA Code will not protect a manufacturer as a matter of law

under the anti-kickback statute, it will substantially reduce the

risk of fraud and abuse and help demonstrate a good faith effort

to comply with the applicable federal health care program

requirements.” Id.4

d. Effectiveness of Detailing

Detailing is generally used only to market prescription

drugs that are entitled to patent protection. After the patents

on a brand-name drug expire, competitors can obtain approval to

sell generic bioequivalent versions of the drug. Generic drugs

are generally substantially less expensive than their brand-name 

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5 In some circumstances, a brand-name drug may be

preferable to a bioequivalent generic alternative. This is

primarily because generic drugs are not subjected to the same

rigorous study and testing as brand-name drugs, may have unknown

side effects, and bioequivalent generic alternatives need only

demonstrate absorption parameters falling between 80 and 125

percent of those obtained by their branded counterparts. As a

result, individual responses to treatment may vary significantly. 

For example, when patients switch from a brand-name drug to a

generic drug, there is a risk that the patient will absorb

significantly more or less of the medication than the patient was

absorbing from the branded drug. Additionally, because there may

be numerous generic producers of a single brand-name drug, with

each generic alternative characterized by a different rate of

absorption of active ingredients and different side effects, a

patient’s response to treatment may vary substantially depending

on the generic alternative the pharmacist has in stock on a

particular day. In treating epilepsy, for example, these

variations may result in the patient experiencing seizures that

might have been avoided if the absorption rate had remained

steady. 

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equivalents, and bioequivalent generic drugs are equally

effective for most patients.5 New Hampshire law authorizes

pharmacies to substitute a bioequivalent generic drug for a

branded drug unless the prescriber specifies that the brand-name

drug is “medically necessary.” N.H. Rev. Stat. Ann. §

318-47(d)(2003). Accordingly, sales of brand-name drugs tend to

fall substantially after bioequivalent generic drugs become

available and detailing is no longer seen as a cost-effective

marketing technique. 

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Pharmaceutical companies continue to heavily market brandname drugs as treatments for conditions that can also be treated

with generic alternatives that are not bioequivalent. For

example, although depression can be treated for many patients

with a generic form of Prozac, several pharmaceutical companies

also market different brand-name medications as a treatment for

depression. Because brand-name medications are often

substantially more expensive than non-bioequivalent generic

alternatives, those patients who achieve the same benefits from a

non-bioequivalent generic medication can save money by

substituting the non-bioequivalent generic medication for a

branded alternative. 

Detailing can be an effective marketing technique for brandname drugs. It works by, among other things: (i) building name

recognition among prescribers for the drug being detailed; (ii)

providing information about the drug to prescribers in a form

that is designed to be persuasive; and (iii) providing

inducements to providers consisting of free samples, small gifts,

and meals that facilitate access and foster relationships between

the sales representatives and health care providers. 

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D. Uses of Prescriber-Identifiable Information in Detailing

Pharmaceutical companies use prescriber-identifiable data

for a variety of purposes. I focus here on the ways in which it

is used to target prescribers for detailing, to tailor detailing

messages, and to evaluate the effectiveness of detailing

practices. 

1. Targeting

Pharmaceutical companies use prescriber-identifiable data to

analyze the prescribing practices of specific health care

providers. For example, companies use prescriber-identifiable

information when introducing new drugs to identify “early

adopters” who have demonstrated by their past prescribing

practices that they are disposed to prescribe new medications. 

They also use prescriber-identifiable data to identify health

care providers who have recently changed their prescribing

practices with respect to specific drugs, those who are

prescribing large quantities of the drugs that the detailer is

selling, and those who are prescribing competing drugs. 

Targeting health care providers in this manner enables

pharmaceutical companies to efficiently allocate resources by

providing samples to and detailing for those providers who are

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most likely to be responsive to detailing for specific products. 

2. Tailoring

Pharmaceutical companies use prescriber-identifiable data to

tailor their marketing messages to specific health care

providers. For example, a sales representative might mention

during a detailing session that the drug she is detailing does

not have a specific side effect that is associated with a

competing drug that the health care provider is currently

prescribing. There is no evidence in the record, however, to

suggest that pharmaceutical companies use prescriber-identifiable

data to facilitate the distribution of false or misleading

information.

3. Measuring the Effectiveness of Detailing

Yet another use of prescriber-identifiable data is to

measure the effectiveness of detailing. Companies use the data

to identify the ratio of brand-name to generic drugs prescribed,

assess the success of or resistence to detailer visits, and

measure the effectiveness of larger marketing campaigns. In this

way, manufacturers can adjust the marketing message that

detailers bring to individual health care providers. 

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6 Plaintiffs do not challenge the law’s restriction on the

transmission and use of patient-identifiable data.

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E. The Statute

The Prescription Information Law became effective on June

30, 2006 and is codified at N.H. Rev. Stat. Ann. §§ 318:47-f, 

318:47-g, 318-B:12(IV) (2006). It expressly prohibits the

transmission or use of both patient-identifiable data and

prescriber-identifiable data for certain commercial purposes.6

The pertinent language of the statute reads:

Records relative to prescription information containing

patient-identifiable and prescriber-identifiable data

shall not be licensed, transferred, used, or sold by

any pharmacy benefits manager, insurance company,

electronic transmission intermediary, retail, mail

order, or Internet pharmacy or other similar entity,

for any commercial purpose, except for the limited

purposes of pharmacy reimbursement; formulary

compliance; care management; utilization review by a

health care provider, the patient’s insurance provider

or the agent of either; health care research; or as

otherwise provided by law. Commercial purpose

includes, but is not limited to, advertising,

marketing, promotion, or any activity that could be

used to influence sales or market share of a

pharmaceutical product, influence or evaluate the

prescribing behavior of an individual health care

professional, or evaluate the effectiveness of a

professional pharmaceutical detailing sales force....

The statute does not regulate the transmission or use of data for

non-commercial purposes. Further, although it defines 

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“commercial purpose” broadly, it expressly excludes from the

statute’s scope all conceivable commercial uses of the data

except those that are directly associated with advertising and

marketing. Nor does it prohibit pharmaceutical companies from

using prescriber-identifiable data in clinical trials. 

Violations of the statute are punishable as a misdemeanor if the

offender is a natural person and are treated as a felony if the

offender is any other person. Violators of the statute are also

subject to civil penalties. N.H. Rev. Stat. Ann. § 318:55.

F. Legislative History

The Prescription Information Law was introduced on January

4, 2006, as House Bill 1346 by New Hampshire Representative Cindy

Rosenwald. On May 11, 2006, following House and Senate hearings,

the New Hampshire Legislature passed the amended bill, which the

Governor signed into law on June 30, 2006. The law is the first

of its kind in the United States. 

According to the law’s legislative history, the legislature

passed the law to protect patient and physician privacy and to

save the State, consumers, and businesses money by reducing

health care costs. An Act Requiring Certain Persons To Keep the

Contents of Prescriptions Confidential: Hearing on H.B. 1346

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Before the S. Comm. on Exec. Departments & Administration, 159th

Sess. Gen. Ct. 1 (N.H. 2006) (statement of Rep. Cindy Rosenwald,

Member, House of Representatives). 

Following passage in the House by a unanimous vote, various

representatives spoke in support of the bill at a Senate

Committee hearing. According to Representative Rosenwald, the

law would accomplish its goals by prohibiting the sale or use of

individual patient or prescriber-identifiable information for

marketing brand-name prescription drugs. Id. A section of a

written attachment to Representative Rosenwald’s testimony

entitled “What H.B. 1346 will do,” states that the law will

“hopefully reduce the prescription drug costs for patients,

employers & the State Medicaid program.” Id. at Attachment 1. 

Representative Pamela Price also testified at the hearing

and compared the annual costs to Medicaid of a branded calcium

channel blocker and a generic calcium channel blocker to

purportedly demonstrate state savings that would occur under the

law. Id. at 6, Attachment 4 (chart and statement of Rep. Pamela

Price, Member, House of Representatives). She claimed that a

one-year supply of the branded drug Dynacirc would cost Medicaid

$1,047, while a one-year supply of the generic drug Verapamil

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would cost Medicaid only $162. Id. Because Medicaid insures a 

hundred thousand patients, she said, the potential cost savings

could be substantial. Id. 

Representative Price also submitted a short research paper

written by Emily Clayton, a health care advocate for the

California Public Interest Research Group (CALPIRG). Id. at

Attachment 13; Emily Clayton, Tis Always The Season For Giving: A

White Paper on the Practice and Problems of Pharmaceutical

Detailing, CALPIRG, Sept. 2004, available at http://calpirg.org/

reports/TistheSeasonForGiving04.pdf. In the report, Clayton

briefly explained that pharmaceutical companies purchase

aggregated prescriber information from data mining companies and

then use it “to specifically target their sales pitches when they

meet with doctors.” Id. at 3. 

She described the size and growth of the pharmaceutical

marketing industry, the competitiveness of detailing, and the

effective use of gifts as inducements. Based on Clayton’s review

of several other studies that were not a part of the legislative

record, she concluded that detailing causes public mistrust of

prescriber decisions, increased drug costs, and the provision of

incomplete and/or misleading information to prescribers. Id. at

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4-5. Next, she outlined the AMA and PhRMA guidelines and the

OIG’s related guidance, and criticized them as overly narrow,

vague, discretionary, and lacking in enforcement mechanisms. To

address these problems, she advocated three potential solutions:

(i) caps and bans on gifts from pharmaceutical manufacturers to

doctors, (ii) disclosure requirements with respect to all gifts

from pharmaceutical manufacturers to doctors, and (iii)

codification and enforcement of existing guidelines. 

A representative of the Department of Health and Human

Services (“DHHS”) briefly discussed the large commercial market

for prescriber-identifiable data, and said that commercial use of

this information violates prescribers’ “trade secrets.” Id. at 9

(statement of Gregory Moore, representative of the DHHS, speaking

on behalf of Commissioner John Stephen). According to Moore, the

DHHS 

believes that these activities ultimately drive up the

cost of prescription drugs and the cost of health care

in the aggregate. Since no other state has passed

legislation like this, it would be hard for us to

quantify what that impact might be, but I find it

unlikely the drug companies are sending detail[ers]

into doctors’ offices for the purpose of selling

doctors cheaper medication. In fact, I’m confident

that, if you’re a doctor, that one of the best ways to

get a detailer into your office would be if you

switched to prescribing a generic drug over a branded

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drug.

Id. at 8. 

In addition, President-elect of the New Hampshire Medical

Society, Dr. Seddon Savage, said the law “will deter marketing

intended to manipulate the practice of individual physicians that

is intended to increase market share for the individual

companies, possibly at the expense of appropriate decision-making

for the patients.” Id. at 16-17. Janet Monahan, also

representing the New Hampshire Medical Society, said that because

pharmaceutical companies focus their marketing efforts on their

newest, most expensive medicines, successful promotions lead to

higher health care costs. Id. at 27, Attachment 13 (discussing

Clayton, supra). Bill Hamilton, an advocacy director for AARP

said “we did an analysis and we don’t feel [the law] necessarily

will increase the cost of drugs.” Id. at 21. 

According to testimony offered at this hearing, some

detailers use prescriber-identifiable information to put improper

pressure on prescribers. One anecdote shared by a nurse

practitioner speaking in favor of the Prescription Information

Law highlights this alleged problem. 

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7 Preceptorships are consulting arrangements with doctors. 

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For the past several months, a drug rep has been

bringing coffee to our office on Tuesday mornings. We

have never asked her to continue doing this since we

have a coffee pot, and we routinely make coffee for our

staff and our patients. But she does it anyway, which

is very nice of her. She calls this “Two for Tuesday.”

The problem is that every week she also says to me, “If

you don’t write 2 more prescriptions for my brand

today, I’m not going to be able to continue bringing

coffee.” I prescribe her drug when it is right for my

patients. There are many times when it is not right.

We feel pressure from her to prescribe her product

even though we have never asked her to bring coffee. 

This may sound like a small thing, but I feel that

since she knows exactly how many prescriptions I write

each week for her drug versus the competition, she is

expecting a quid pro quo. 

Id. at 33, Attachment 15. A similar anecdote, as described in a

January 2006 article in The New York Times, was also included in

the legislative record. According to the article, a district

manager for a pharmaceutical company sent an e-mail to detailers

in which she stated that 

[o]ur goal is 50 or more scripts per week for each

territory. If you are not achieving this goal, ask

yourself if those doctors that you have such great

relationships with are being fair to you. Hold them

accountable for all of the time, samples, lunches,

dinners, programs, and past preceptorships7 that you

have provided or paid for and get the business!! You

can do it!! 

Id. at 27, Attachment 13 (quoting Gardiner Harris & Robert Pear,

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8 As of the time of the hearing, the PDRP was not yet in

place. 

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Drug Maker’s Efforts to Compete in Lucrative Insulin Market Are

Under Scrutiny, N.Y. TIMES, Jan. 28, 2006). 

Others spoke in opposition to the bill. A representative of

the New Hampshire Association of Chain Drug Stores expressed

concern that the bill struck too broadly and, among other

problems, would prevent prescriptions from being transferred from

one pharmacy to another. Id. at 11. Representatives of IMS

Health and Verispan also spoke in opposition, arguing that the

law would do nothing to advance patient privacy, that prescriber

privacy could be adequately addressed by the PDRP,8 and that the

legislature should consider other ways to address privacy

concerns to avoid losing out on the value of prescriberidentifiable information. Id. at Attachment 10. They suggested

that the law would cause unintended harms, including increased

health care costs caused by the need for higher drug prices to

make up for inefficient marketing, inefficient sampling, and

increased compliance and enforcement costs. Id. at 22,

Attachment 12.

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G. The Statute’s Impact

IMS and Verispan have substantially altered their business

practices to comply with the Prescription Information Law. IMS

has entered into agreements with its sources of prescription

information to ensure that it will not use the information in

ways that violate the law. It removes prescriber-identifiable

information from New Hampshire prescriptions and no longer sells

prescriber-identifiable data from New Hampshire to third parties. 

To avoid inadvertent violations, it examines every prescription

record it receives and removes all identifying data for

prescriptions that originate from a pharmacy or a health care

provider with a New Hampshire zip code. Verispan has modified

its databases so that it can identify and suppress all

prescriber-identifiable data from New Hampshire prescriptions

before the information is released to third parties.

II. ANALYSIS

Plaintiffs argue that the Prescription Information Law is a

content-based restriction on non-commercial speech that is

subject to strict scrutiny. They then assert that the law

violates the First Amendment because it is not narrowly tailored

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 26 of 54
9 The Attorney General also contends that plaintiffs lack 

standing to sue because they are not subject to prosecution under

the Prescription Information Law. I am not persuaded by this

argument. First, it is at least arguable that plaintiffs could

be prosecuted under the law because they acquire prescriberidentifiable data and resell it for commercial purposes and thus

are “other similar entit[ies]” that are subject to prosecution

under the law. In any event, they are plainly subject to

prosecution as conspirators if they conspire with covered

entities to violate the law. See N.H. Rev. Stat. Ann. § 629:3

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to serve compelling state interests. Their fall-back position is

that the law is unconstitutional even if it is a commercial

speech restriction subject only to intermediate scrutiny because

it does not directly advance a substantial governmental interest

in a manner that is narrowly tailored to serve that interest. 

The Attorney General attacks the plaintiffs’ claim at every

turn. She first argues that the Prescription Information Law is

not subject to the First Amendment because it does not regulate

speech. Alternatively, she argues that the law is a commercial

speech restriction that is subject only to intermediate scrutiny. 

She then claims that the law readily passes the intermediate

scrutiny test because it has been carefully crafted to directly

serve the State’s substantial interests in protecting prescriber

privacy, promoting public health, and controlling health care

costs.9

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 27 of 54
(1999). More fundamentally, it is undisputed that plaintiffs

have incurred substantial costs to comply with the law and face

revenue losses if they are unable to acquire and resell

prescriber-identifiable data. This kind of economic injury is

sufficient to give them standing to sue. See Gen. Motors Corp.

v. Tracy, 519 U.S. 278, 286-87 (1997). 

-28-

I resolve this dispute by examining each of the Attorney

General’s arguments in turn. As I explain below, I ultimately

conclude that the Prescription Information Law violates the First

Amendment because it improperly restricts commercial speech. 

A. Does the Challenged Statute Restrict “Speech”?

The Attorney General first argues that the Prescription

Information Law does not restrict “speech” protected by the First

Amendment. This argument takes two forms, neither of which has

merit. First, she argues that the First Amendment does not apply

to the Prescription Information Law because it targets

unprotected factual information rather than constitutionally 

protected speech. This argument is contradicted by Supreme Court

precedent. See, e.g., Fla. Star v. B.J.F., 491 U.S. 524, 540-41

(1989) (rape victim’s name); Va. State Bd. of Pharmacy v. Va.

Citizens Consumer Counsel, Inc., 425 U.S. 748, 762 (1976) (drug

prices); see also Miller v. California, 413 U.S. 15, 34 (1973)

(stating that First Amendment protects speech that has scientific

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 28 of 54
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value). As the Second Circuit has acknowledged in discussing

this precedent, “[e]ven dry information, devoid of advocacy,

political relevance, or artistic expression, has been accorded

First Amendment protection.” Universal City Studios, Inc. v.

Corley, 273 F.3d 429, 446-47 (2d Cir. 2001) (citing Supreme Court

cases). Here, the challenged law restricts the transmission of

truthful information concerning the prescribing practices of New

Hampshire’s health care providers. It is not exempt from First

Amendment review merely because it targets factual information

rather than viewpoints, beliefs, emotions, or other types of

expression.

The Attorney General next argues that the Prescription

Information Law does not restrict speech because it regulates

“uses” of prescriber-identifiable information rather than the

disclosure of such information. This argument is based on the

mistaken premise that the law restricts only the uses to which

prescriber-identifiable data may be put. In fact, the challenged

statute provides that prescriber-identifiable information “shall

not be licensed, transferred, used or sold” for a prohibited

purpose. N.H. Rev. Stat. Ann. § 318:47-f (emphasis added). A

transfer of information to a third party is a form of disclosure. 

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 29 of 54
10 Although a plaintiff ordinarily cannot base a claim to

relief on the rights of third parties, the Supreme Court has

recognized an exception to the general rule when vendors who have

suffered their own injuries also assert the rights of their

customers. See Craig v. Boren, 429 U.S. 190, 194-95 (1976). 

This exception applies here and permits plaintiffs to assert the

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The law is thus a speech restriction because it limits both the

use and disclosure of prescriber-identifiable data for commercial

purposes. Bartnicki v. Vopper, 532 U.S. 514, 526-27 (2001)(a

“prohibition against disclosures is fairly characterized as a

regulation of pure speech.”). 

The Attorney General’s argument would fail even if the

Prescription Information Law did not directly restrict the

disclosure of prescriber-identifiable data. A law is not

automatically exempt from the First Amendment merely because it

regulates protected speech only indirectly. See, e.g.,

Minneapolis Star & Tribune Co. v. Minn. Comm’n of Revenue, 460

U.S. 575, 585 (1983) (special tax on ink and paper used in

production of a publication violates First Amendment). Here, the

challenged Law restricts speech by preventing pharmaceutical

companies from using prescriber-identifiable information both to

identify a specific audience for their marketing efforts and to

refine their marketing messages.10 Such laws are subject to

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 30 of 54
First Amendment interests of their pharmaceutical company

customers.

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First Amendment scrutiny because they affect both the speaker’s

ability to communicate with his intended audience and the

audience's right to receive information. U.S. West, Inc. v. Fed.

Commc’n Comm’n, 182 F.3d 1224, 1232 (10th Cir. 1999) (regulations

restricting use of customer information for marketing purposes

regulate speech protected by the First Amendment). Accordingly,

I reject the Attorney General’s argument that the Prescription

Information Law is not subject to the First Amendment. 

B. What Level of Scrutiny Applies?

Having determined that the Prescription Information Law

restricts speech, I must next decide whether to apply strict

scrutiny or intermediate scrutiny in evaluating plaintiffs' First

Amendment claim. Plaintiffs argue that strict scrutiny applies

because the Prescription Information Law is a content-based

restriction on non-commercial speech. The Attorney General

responds by claiming that intermediate scrutiny is the

appropriate standard of review because the challenged provision

regulates commercial speech. I agree with the Attorney General.

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 31 of 54
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Commercial speech regulations ordinarily are subject to

intermediate scrutiny. Cent. Hudson Gas & Elec. Corp. v. Pub.

Serv. Comm'n of N.Y., 447 U.S. 557, 564 (1980). The case law,

however, is unclear as to how commercial speech is defined. 

Sometimes it is deemed to be speech “related solely to the

economic interests of the speaker and its audience.” Id. at 561. 

Other times it is defined more narrowly to encompass only speech

that “propose[s] a commercial transaction.” Bd. of Trs. of the

State Univ. of N.Y. v. Fox, 492 U.S. 469, 473-74 (1989); see also

Eugene Volokh, Freedom of Speech and Information Privacy: The

Troubling Implications Of A Right To Stop People From Speaking

About You, 52 STAN. L. REV. 1049, 1082-83 (2000). 

Plaintiffs contend that the Supreme Court repudiated Central

Hudson’s broader definition of commercial speech in City of

Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 423-24

(1993). I reject this argument both because the Supreme Court’s

holding in Discovery is more limited than plaintiffs suggest, id.

at 424, 428, and because the First Circuit continues to apply

Central Hudson’s broader definition. See Pharm. Care Mngt. Ass’n 

v. Rowe, 429 F.3d 294, 309 (1st Cir. 2005) (applying test in case

that presented a “close question” whether speech at issue was

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 32 of 54
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commercial); El Dia, Inc. v. P.R. Dep’t of Consumer Affairs, 413

F.3d 110, 115 (1st Cir. 2005). Accordingly, I will evaluate the

Prescription Information Law by using the definition of

commercial speech described in Central Hudson.

The Prescription Information Law plainly qualifies as

commercial speech under Central Hudson. In understanding why

this is so, it is important to bear in mind that the challenged

law only restricts the transmission or use of prescriberidentifiable information for certain commercial purposes. It

does not prevent anyone from transmitting or using the

information for law enforcement purposes, research purposes,

educational purposes, compliance review purposes, or for any

non-commercial purpose. In short, the law is a commercial speech

restriction under Central Hudson because it restricts only speech

that is “solely in the individual interest of the speaker and its

specific business audience,” Dun & Bradstreet, Inc. v. Greenmoss

Builders, Inc., 472 U.S. 749, 762 (1985) (plurality opinion); see

also Trans Union Corp. v. Fed. Trade Comm’n, 245 F.3d 809, 818

(D.C. Cir. 2001) (applying intermediate scrutiny to ban on sale

of targeted marketing lists). 

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 33 of 54
11 I also reject plaintiffs’ alternative argument that

strict scrutiny is required because the Prescription Information

Law is a content-based commercial speech restriction. “[G]iven

the Supreme Court’s commercial speech doctrine, which creates a

category of speech defined by the content but afforded only

qualified protection, the fact that a restriction is contentbased cannot alone trigger strict scrutiny.” Trans Union Corp.

v. Fed. Trade Comm’n, 267 F.3d at 1141-42 (citing City of

Cincinnati, 507 U.S. at 410); see also Consol. Cigar Corp. v.

Reilly, 218 F.3d 30, 41-43 (1st Cir. 2000)(applying intermediate

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I would reach the same conclusion even under the narrower

definition of commercial speech used in Fox. Although the data

that the Prescription Information Law directly restricts does not

itself propose a commercial transaction, the law’s primary

purpose is to affect commercial transactions by making it more

difficult for pharmaceutical companies to convince health care

providers to prescribe brand-name drugs when less expensive and

equally effective alternatives are available. The law is thus

squarely aimed at speech that proposes a commercial transaction

even though it does not explicitly bar such speech. Because the

only use of prescriber-identifiable data that the law prohibits

is its use in connection with speech that proposes a commercial

activity, the Prescription Information Law qualifies as a

commercial speech restriction even under Fox’s more narrow

definition of the term.11

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 34 of 54
scrutiny to regulation of tobacco-related advertising even though

the restriction was content-based), aff’d in pertinent part,

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001).

12 The Attorney General contends that I must defer to the

New Hampshire legislature’s predictive judgments in holding her

to this burden. When a quality record establishes that the

legislature conducted an extensive investigation, acquired

considerable expertise in the regulated area, and incorporated

express findings into the approved statute, a court must accord

substantial deference to the legislature’s predictive judgments,

even when legislation affects protected speech. See Turner

Broad. Sys., Inc. v. Fed. Commc’n Comm, 520 U.S. 180, 186 (1997)

(“Turner II”). In contrast, if the legislative record lacks this

kind of support, considerably less deference is warranted. See

Sable Commc’ns of Cal. v. Fed. Commc’n Comm’n, 492 U.S. 115, 129-

30 (1989) (no deference where legislative record “contains no

evidence as to how effective or ineffective the . . . regulations

were or might prove to be”); Landmark Commc’ns, Inc. v. Virginia,

435 U.S. 829, 843 (1978) (no deference where statute was devoid

-35-

C. Does the Statute Pass Intermediate Scrutiny?

1. The Intermediate Scrutiny Test

Truthful commercial speech that does not promote unlawful

activity can be limited under Central Hudson only if it “(1) is

in support of a substantial government interest, (2) ‘directly

advances the government interest asserted,’ and (3) ‘is not more

extensive than is necessary to serve that interest.’” El Dia,

413 F.3d at 113 (quoting Cent. Hudson, 447 U.S. at 566). The

party seeking to uphold a commercial speech restriction bears the

burden of proof with respect to all three elements.12 Thompson

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 35 of 54
of “actual facts” and contained only “legislative

declaration[s]”). 

Here, the New Hampshire legislature determined that the

Prescription Information Law was necessary to protect prescriber

privacy and save money for the State, consumers, and businesses. 

There is nothing in the record, however, to support a conclusion

that the legislature had established expertise in the regulation

of prescriber-identifiable data. Moreover, it acted quickly

after the bill was introduced, received hearing testimony by

numerous individuals who had yet to review proposed amendments,

made no express findings either on the record or incorporated

into the statute, failed to discuss alternative measures that

would not restrict speech, and cited no evidence as to how

effective the restriction might prove to be. Principles of

federalism and separation of powers counsel respect for the New

Hampshire legislature at all times, including here. In light of

the particulars of this case, however, I am not free to simply

endorse its actions without careful analysis. See Sable, 492

U.S. at 129 (quoting Landmark, 435 U.S. at 843) (“Deference to a

legislative finding cannot limit judicial inquiry when First

Amendment rights are at stake.”). 

-36-

v. W. States Med. Ctr., 535 U.S. 357, 373 (2002). 

To satisfy the first two elements of the Central Hudson

test, the party defending a commercial speech restriction must

identify a substantial governmental interest that underlies the

restriction. Id. at 367. It then “must demonstrate that the

harms it recites are real and that its restriction will in fact

alleviate them to a material degree.” Edenfield v. Fane, 507

U.S. 761, 770-71 (1993). A restriction that provides “only

ineffective or remote support for the government's purpose” will

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 36 of 54
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not be sustained. Id. at 770 (quoting Cent. Hudson, 447 U.S. at

564). Although empirical data supporting a commercial speech

restriction need not be “accompanied by a surfeit of background

information,” Fla. Bar v. Went For It, Inc., 515 U.S. 616, 628

(1995), “mere speculation or conjecture” that a speech

restriction will cure a purported harm is insufficient to justify

it. Edenfield, 507 U.S. at 770.

The test’s third element focuses on the fit between the

challenged speech restriction and the governmental interest it is

designed to serve. Absolute precision is not required. Instead,

a restriction will suffice if the fit is both “reasonable” and

“‘in proportion to the interest served.’” Fox, 492 U.S. at 480

(quoting In re R.M.J., 455 U.S. 191, 203 (1982)). Nevertheless, 

“if the Government could achieve its interests in a manner that

does not restrict speech, or that restricts less speech, the

Government must do so.” Thompson, 535 U.S. at 371.

2. Application

The Attorney General contends that the Prescription 

Information Law is a permissible commercial speech restriction

because it is narrowly drawn and directly advances the State’s

substantial interests in protecting prescriber privacy, promoting

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 37 of 54
13 It is not surprising that the Attorney General does not

seek to defend the Prescription Information Law as an information

privacy measure. First, the challenged provisions target

professional information rather than personal information. This

distinction is important because most information privacy laws

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public health, and containing health care costs. Plaintiffs

challenge the Attorney General’s contention that the State has a

substantial interest in protecting prescriber privacy. They also

argue that the law cannot be justified as either a public health

law or a cost containment measure because the evidence in the

record fails to prove that the law will directly serve either

interest. Finally, they argue that the law is invalid even if it

is effective because its purposes could be achieved as well or

better through alternatives that do not restrict protected

speech. I address each argument in turn.

a. Is Protecting Prescriber Privacy a

 Substantial Governmental Interest?

In arguing that the State has a substantial interest in

protecting prescriber privacy, the Attorney General makes a very

narrow claim. She does not argue that prescriber-identifiable

data is personal or private information that the State has a

substantial interest in helping health care providers shield from

public view.13 Nor does she contend that the data is

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 38 of 54
protect the privacy of personal information. See, e.g., Health

Insurance Portability and Accountability Act of 1996, Pub. L. No.

104-191, 110 Stat. 1936 (codified in scattered sections of 18

U.S.C., 26 U.S.C., 29 U.S.C., and 42 U.S.C.) (patient medical

information); Fair Credit Reporting Act, 15 U.S.C. § 1681 et

seq.(2000) (credit reporting information); Family Educational

Rights and Privacy Act of 1974, 20 U.S.C. § 1232g (2000 & Supp.

III 2003) (educational information); Video Privacy Protection Act

of 1988, 18 U.S.C. 2710 (2000) (video rental information); Cable

Communications Policy Act of 1984, Pub. L. No. 98-549, 98 Stat.

2779 (subscriber information). Any argument that the State’s

interest in protecting business information is equivalent to its

interest in protecting personal information would require a

substantial extension of existing precedent. See Vega-Rodriguez

v. P.R. Tel. Co., 110 F.3d 174, 183 (1st Cir. 1997) (Fourteenth

Amendment right to information privacy “has not extended beyond

prohibiting profligate disclosure of medical, financial, and

other intimately personal data”). Second, health care providers

cannot credibly claim that they have a reasonable expectation

that their prescribing practices will remain private because

prescriber-identifiable data is routinely disclosed to patients,

pharmacies, insurance companies, medical review committees, and

government agencies. In other words, because health care

providers work in a “closely-regulated” industry, they have at

best a diminished expectation of privacy with respect to their

prescribing practices. New York v. Burger, 482 U.S. 691, 702

(1987) (operators of closely regulated business have diminished

expectation of privacy). Finally, it is difficult to see how the

law’s restriction on the transmission and use of prescriberidentifiable data can be successfully characterized as an

information privacy measure because, as the Attorney General

concedes, the law does not “attempt to keep prescriberidentifiable data secret or entirely private.” Def.’s Trial

Memorandum at 20 n.10 (Doc. No. 66).

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intellectual property that may be protected from public

disclosure as trade secret information. Instead, she claims only

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 39 of 54
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that the law serves the State’s substantial interest in

protecting prescriber privacy by “limiting unwarranted intrusions

into the decision-making process of prescribing physicians.”

Def.’s Trial Memorandum at 20 (Doc. No. 66). 

The case law that the Attorney General relies on to support

the State’s claimed interest in protecting the decision-making

process of prescribers recognizes that the State has a

substantial interest in regulating speech that: (i) intrudes upon

“the well being, tranquility, and privacy of the home,” Carey v.

Brown, 447 U.S. 455, 471 (1980); (ii) is “pressed with such

frequency or vehemence as to intimidate, vex, or harass the

recipient,” Edenfield, 507 U.S. at 769; or (iii) involves

“willful or knowing affront to or invasion of the tranquility of

bereaved or injured individuals,” Fla. Bar, 515 U.S. at 630. The

present case is far different, however, from other cases in which

the state’s interest in protecting citizens from improper

commercial solicitation has been recognized as substantial. 

First, although the Attorney General asserts that pharmaceutical

companies use prescriber-identifiable data to “pressure” health

care providers, she did not even attempt to prove at trial that

they use the data to improperly coerce or harass health care

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 40 of 54
14 The Prescription Information Law’s legislative history

includes two references that arguably support the view that

prescriber-identifiable data can be used to coerce health care

providers. The first consists of testimony from a nurse

practitioner who was told by a sales representative that her

once-a-week deliveries of free coffee and donuts would be

discontinued unless the practitioner wrote more prescriptions. 

S. Comm. Hearing on H.B. 1346 at 33, Attachment 15. The second

is a newspaper article that describes an email in which a

pharmaceutical sales manager exhorted her sales staff to hold

their doctors accountable for the samples, gifts, meals, and

other inducements they had received. Id. at 27, Attachment 13

(quoting Harris & Pear, supra). The Attorney General did not

follow up on this evidence at trial, and those witnesses who

discussed the issue of coercion were not aware of any instances

in which health care providers were coerced into writing

prescriptions. Thus, I do not find any credible evidence in the

record that supports the notion that pharmaceutical companies are

routinely using prescriber-identifiable data to coerce health

care providers. 

-41-

providers.14 Second, it is obvious that the current case does

not involve solicitations that invade the tranquility of the home

or that target vulnerable victims. Finally, although the

Attorney General asserts that prescriber-identifiable data is

used to intrude upon the doctor-patient relationship, she does

not claim that the data is being exploited to compromise patient

privacy. Instead, she argues only that pharmaceutical companies

are using the data to help persuade doctors to make inadvisable

prescribing decisions. In short, what the Attorney General

claims as a distinct interest in protecting prescriber privacy is

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 41 of 54
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nothing more than a restatement of her contentions that the law

can be justified because it prevents pharmaceutical companies

from using prescriber-identifiable data in ways that undermine

public health and increase health care costs. Accordingly, I

reject the Attorney General’s argument that the law can be

justified on the distinct basis that it promotes prescriber

privacy. 

b. Does the Prescription Information Law

Directly Advance the State's Interests in 

Promoting Public Health and Containing 

Health Care Costs?

The Attorney General contends that the Prescription

Information Law is a valid commercial speech restriction because

it prevents pharmaceutical companies from using

prescriber-identifiable data in ways that undermine public health

and increase health care costs. The chain of reasoning that

leads to this conclusion begins with the major premise that

prescriber-identifiable data allows pharmaceutical companies to

target health care providers for marketing and tailor marketing

messages in ways that make detailing more persuasive. Next, it

assumes that because prescriber-identifiable data makes detailing

more persuasive, it inevitably leads to more prescriptions for

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 42 of 54
-43-

brand-name drugs when compared with generic alternatives because

only branded drugs are detailed. Finally, it assumes that any

increase in the number of prescriptions written for brand-name

drugs when compared to generic alternatives harms the public

health and increases health care costs because branded drugs

often turn out to be more harmful than generic alternatives and

almost always are more expensive. Accordingly, a ban on the use

of prescriber-identifiable data for marketing purposes promotes

public health and contains health care costs by prohibiting

pharmaceutical companies from using prescriber-identifiable data

to promote the sale of brand-name drugs. 

I am unpersuaded by the Attorney General’s ultimate

conclusion that the Prescription Information Law directly

promotes public health and contains health care costs even though

I accept her major premise that pharmaceutical companies use

prescriber-identifiable data to make detailing more persuasive. 

Any general claim that the public health is undermined when the

effectiveness of detailing for brand-name drugs is increased

depends upon the counterintuitive and unproven proposition that,

on balance, brand-name drugs are more injurious to the public

health than generic alternatives. Moreover, although the

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 43 of 54
15 I refer only to non-bioequivalent generic drugs because

the parties agree that a ban on the use of prescriberidentifiable data will not affect a prescriber’s choice between a

brand-name drug and a bioequivalent generic alternative. This is

-44-

Attorney General specifically claims that the State is entitled

to ban the use of prescriber-identifiable data because it is

being used to target “early adopters” for the marketing of

dangerous new drugs, her argument is unpersuasive because the

record does not establish either that early adopters are more

likely to be influenced by detailing than other health care

providers or that new drugs are generally more injurious to the

public health than existing medications. Accordingly, the

Attorney General has failed to prove that the Prescription

Information Law directly promotes public health.

I am also unconvinced by the Attorney General’s argument

that the Prescription Information Law directly promotes the

State’s interest in containing health care costs. The Attorney

General appears to assume that any health care cost savings that

will result from a ban on the use of prescriber-identifiable data

can be achieved without compromising patient care. However, this

proposition is far from self-evident. Non-bioequivalent generic

drugs are not always as effective as brand-name alternatives.15

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 44 of 54
because, as the Attorney General acknowledges, pharmaceutical

companies generally stop detailing branded drugs when

bioequivalent generic drugs become available.

-45-

Moreover, even in cases where non-bioequivalent generic drugs

will work as well or better than a brand-name alternative for

most patients, there may be some patients who will benefit by

taking the branded medication. Yet, a ban on the use of

prescriber-identifiable data affects both helpful and harmful 

brand-name prescribing practices in the same way. Because the

Attorney General has failed to prove that any reductions in

health care costs that may result from a ban on the use of

prescriber-identifiable data can be achieved without compromising

patient care, I am unable to endorse her argument that the

Prescription Information Law can be justified as a cost

containment measure. 

The Attorney General’s argument also suffers from a

fundamental flaw that would prevent me from endorsing it even if

the assumptions on which it is based were true. Although the

Attorney General complains that pharmaceutical companies use

prescriber-identifiable data to “manipulate” health care

providers, it is important to understand that she does not assert

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 45 of 54
-46-

that the data is being used to propagate false or misleading

marketing messages. Instead, she argues that pharmaceutical

companies manipulate health care providers by using prescriberidentifiable data to enhance the effectiveness of highly

persuasive but truthful commercial speech. As the Supreme Court

has recently explained, however, “[w]e have previously rejected

the notion that the Government has an interest in preventing the

dissemination of truthful commercial information in order to

prevent members of the public from making bad decisions with the

information.” Thompson, 535 U.S. at 374; see also, 44

Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 503 (1996)

(“[B]ans against truthful, non-misleading commercial speech . . .

usually rest solely on the offensive assumption that the public

will respond ‘irrationally’ to the truth. The First Amendment

directs us to be especially skeptical of regulations that seek to

keep people in the dark for what the government perceives to be

their own good.”) (citation omitted); Va. State Bd. of Pharmacy,

425 U.S. at 770. Health care providers are highly trained

professionals who are committed to working in the public

interest. They certainly are more able than the general public

to evaluate truthful pharmaceutical marketing messages. 

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 46 of 54
16 The Attorney General has presented testimony, a written

declaration, and published reports of numerous studies conducted

by Dr. Jerry Avorn, Professor of Medicine at Harvard Medical

School and Chief of the Division of Pharmaco-epidemiology and

Pharmaco-economics in the Department of Medicine at Brigham and

Women’s Hospital. Dr. Avorn is a renowned expert on the effects

of pharmaceutical marketing on drug utilization and prescribing

behaviors. Although Dr. Avorn is critical of detailing, even he

is quick to acknowledge that it has beneficial uses and should

not be banned. (Trial Tr. vol. 3 Afternoon Session, 68:13-25,

85:19-23, 87:17-25, Jan. 31, 2007 (Doc. No. 114)).

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Accordingly, the State simply does not have a substantial

interest in shielding them from sales techniques that enhance the

effectiveness of truthful and non-misleading marketing

information. Instead, if the State is concerned that truthful

detailing is causing health care providers to make inadvisable

prescribing decisions, “the remedy to be applied is more speech,

not enforced silence.” Whitney v. California, 274 U.S. 357, 377

(1927) (Brandeis, J. concurring). 

c. Is the Prescription Information Law More

Extensive Than Necessary to Serve the State’s

Substantial Interests?

Even the harshest critics of pharmaceutical detailing

acknowledge that it is sometimes used in ways that benefit public

health.16 Not all new drugs are harmful and generic drugs are

not always as effective for all patients as brand-name

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 47 of 54
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alternatives. When new drugs work as advertised and branded

drugs are superior to non-bioequivalent generic alternatives,

detailing serves the state’s interest in public health by

promoting efficacious treatments. The Prescription Information

Law, however, does not discriminate between beneficial detailing

and harmful detailing. Instead, it imposes a sweeping ban on the

use of prescriber-identifiable information to enhance the

effectiveness and efficiency of all detailing. Because this ban

restricts commercial speech, it cannot be sustained unless it is

no more extensive than necessary to serve the State’s claimed

interests in promoting public health and containing health care

costs. 

The record in this case demonstrates that there are a number

of ways in which the State can address the concerns that underlie

the Prescription Information Law without restricting protected

speech. First, if legislators are concerned that pharmaceutical

companies are improperly using samples, gifts, meals, and other

inducements to promote inadvisable prescribing practices, they

can address this perceived problem by following other states that

have adopted laws that limit such practices. See, e.g., Minn.

Stat. Ann. § 151.461 (2007); Cal. Health and Safety Code §

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119402(d)(1) (2007).

Second, if legislators fear that pharmaceutical detailing is

simply too effective to go unrebutted, they can require the State

to enter the intellectual marketplace in several different ways

with competing information that will help health care providers

balance and place in context the sales messages that detailers

deliver. Among other things, they can require the State to

prepare and distribute “best practice” guidelines that educate

health care providers as to both the health and cost implications

of their prescribing decisions; require the State to develop

counter-detailing programs that make health care providers aware

of the cost implications of their prescribing decisions, see,

e.g., W. Va. Code Ann. § 5-16C-9(5) (2006) (authorizing state to

develop counter-detailing programs); or they can require health

care providers to regularly participate in continuing medical

education programs that are specifically designed to provide

practitioners with the best available information concerning the

advantages and disadvantages of prescribing generic drugs rather

than brand-name drugs. 

Finally, if legislators are concerned that pharmaceutical

companies are using prescriber-identifiable data to drive up

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Medicaid drug costs, they can address the issue directly by

properly implementing a Medicaid Pharmacy Program that takes into

account the cost-effectiveness of brand-name drugs when compared

with non-bioequivalent generic alternatives. New Hampshire’s

Medicaid Pharmacy Benefit Program requires health care providers

to obtain authorization from state officials before prescribing

certain drugs for Medicaid patients. See generally, 2004 N.H.

Laws, ch. 188 (authorizing the New Hampshire Department of Health

and Human Services to establish a preferred drug list and a prior

authorization process). The State has also adopted regulations

that both authorize the State to take cost considerations into

account when deciding which drugs should be subjected to the

prior authorization requirement, N.H. Admin. Rules, HeW570.06(F)(3), and permit the State to reject requests to

prescribe drugs that are subject to prior authorization, N.H.

Admin. Rules, HE-W570.06(I)-P). Accordingly, the State can

prevent unnecessary expenditures on brand-name drugs simply by

subjecting such drugs to prior authorization and rejecting

requests to prescribe them when they are not medically necessary.

Although the parties have not briefed the issue, it is

likely that New Hampshire’s current Pharmacy Benefit Program

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conflicts with federal Medicaid law because it both allows state

officials to take a drug’s comparative cost into account when

deciding whether to subject it to prior authorization and permits

the State to reject requests to prescribe drugs subject to prior

authorization. See Pharm. Research & Mfrs. of Am. v. Meadows,

304 F.3d 1197, 1201-02 (11th Cir. 2002) (construing 42 U.S.C.

1396r-8). Even if New Hampshire’s current program violates

federal law, however, legislators could amend the program to both

bring it into compliance with federal law and require prescribers

to consider the cost implications of prescribing drugs that are

subject to prior authorization. One way that this could be done

would be to eliminate the State’s power to deny prescription

requests for non-preferred drugs and replace it with a

requirement that health care providers consult with a state

pharmacist before prescribing such drugs. Florida has a law that

requires consultation, and it has both withstood a court

challenge and proved to be highly effective in persuading health

care providers to change their prescribing practices. Id. at

1198, 1205 (discussing Fla. Stat. § 409.91195, 409.912).

Dynacirc and Verapamil, two calcium channel blockers that

Representative Price cited in support of the Prescription

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Information Law, illustrate how the State’s Pharmacy Benefit

Program could be used to limit unnecessary prescriptions for

brand-name drugs. Both drugs are currently treated as preferred

drugs under the program, available at http://www.dhhs.state.nh.

us/DHHS/MEDICAIDPROGRAM/LIBRARY/Policy-Guideline/

preferred-drug.htm (follow “NH Medicaid Preferred Drug List-PDL”

hyperlink). Thus, both drugs may currently be prescribed without

prior authorization. If Dynacirc is substantially more expensive

than Verapamil but no more effective for most patients, as

Representative Price implied during the legislative hearing on

the Prescription Information Law, the State could substantially

limit unnecessary prescriptions for Dynacirc under its existing

program simply by making it a non-preferred drug and denying

unwarranted requests for prior authorization. If the State

instead adopted a program such as the one used in Florida, it

could require health care providers to consult with a state

pharmacist before prescribing Dynacirc for Medicaid patients. 

Under either approach, the State could significantly reduce

Medicaid spending on non-preferred drugs without restricting

constitutionally protected speech. 

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IV. CONCLUSION

The Prescription Information Law attempts to address

important public policy concerns. Ordinarily, states should be

given wide latitude to choose among rational alternatives when

they act to benefit the public interest. However, when states

adopt speech restrictions as their method, courts must subject

their efforts to closer scrutiny. Because the Prescription

Information Law restricts constitutionally protected speech

without directly serving the State’s substantial interests and

because alternatives exist that would achieve the State’s

interests as well or better without restricting speech, the law

cannot be enforced to the extent that it purports to restrict the

transfer or use of prescriber-identifiable data. Plaintiffs’

request for declaratory relief and a permanent injunction are

granted.

SO ORDERED.

/s/Paul Barbadoro___

Paul Barbadoro

United States District Judge

April 30, 2007

cc: Patricia Acosta, Esq.

Mark Ash, Esq.

Donald Ayer, Esq.

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 53 of 54
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James Bassett, Esq.

Harold Craig Becker, Esq.

Don L. Bell, II, Esq.

William Bernstein, Esq.

Stacy Canan, Esq.

Craig Donais, Esq.

Sean Fii-Flynn, Esq.

Richard Head, Esq.

Stephen Judge, Esq.

Thomas Julin, Esq.

Terri Keville, Esq.

Garry Lane, Esq.

Derek Lick, Esq.

Walter Maroney, Esq.

Charles Morse, Esq.

David Rienzo, Esq.

David Shudock, Esq.

Jeffrey Spear, Esq.

Bruce Vignery, Esq.

Case 1:06-cv-00280-PB Document 126 Filed 04/30/2007 Page 54 of 54