Opinion ID: 2511318
Heading Depth: 1
Heading Rank: 3

Heading: Assessing the Local Interest and the Burden on Interstate Commerce

Text: As discussed in Section II above, I agree that the State has a substantial interest in reducing the cost of prescription drugs for its residents and that the State could reasonably conclude that section 1711-E(2-A) advances that interest by regulating the dissemination of information revealing the prescribing histories of Maine's licensed health care providers. Cf. Ayotte, 550 F.3d at 94-95. The statute's importance to the State is no different in the context of a Commerce Clause inquiry than in the First Amendment setting. The other side of the balance is not the same, however. The conclusion that the statute is narrowly tailored under the Central Hudson test for commercial speech, see 447 U.S. at 566, 100 S.Ct. 2343, does not tell us whether the provision impermissibly burdens interstate commerce. As I have described, the statute does in fact regulate specific activities that occur mostly out of state. The impact on the plaintiffs is not merely spillover from a prohibition directed at others; they are among the categories of entitiesPDIIs affected directly by the statute. Moreover, the statute's impact on PDIIs is potentially enormous. Sales of prescriber-identifiable data are the bread-and-butter of the medical data mining business, producing $1.75 billion in revenue for plaintiff IMS Health alone in 2005. Although only three states have thus far enacted laws designed to limit detailers' access to prescribers' identifying information, they are at the front of a wave of similar legislation. See Rowe, 532 F.Supp.2d at 180 n. 41 (noting testimony that seventeen to twenty other states were considering similar laws); Heesters, supra, at 791 (stating that numerous other states have [bills] that similarly restrict the sale of prescription drug data that are currently pending in legislative committees). Hence, a conclusion that section 1711-E(2-A) comports with the dormant Commerce Clause could eventually lead to elimination of any market for prescriber-identifiable data, which the plaintiffs have argued would jeopardize the viability of their businesses. See Ayotte, 550 F.3d at 95 n. 66 (Plaintiffs theorize that the pharmaceutical companies would be unwilling to pay substantial sums for information they cannot use in marketing, eliminating the data miners' biggest customers thereby cutting off the commercial funding that subsidizes the research and other non-commercial uses of the data.). [54] Plaintiff IMS asserts that it will cost hundreds of thousands of dollars for it to adjust its systems to comply with the statute's restrictions; plaintiff Source Healthcare estimated that it would spend 10,000 employee hours to comply with Maine's and Vermont's laws. The possible effects on the profits of the individual manufacturers is not, however, the concern of the dormant Commerce Clause. PhRMA, 249 F.3d at 84. Our court previously has observed that the Commerce Clause ... `protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations.' Pharm. Care Mgmt. Ass'n v. Rowe, 429 F.3d 294, 313 (1st Cir.2005) (quoting Exxon Corp. v. Gov. of Md., 437 U.S. 117, 127-28, 98 S.Ct. 2207, 57 L.Ed.2d 91 (1978)); see also PhRMA, 249 F.3d at 84 ([T]he fact that a law may have devastating economic consequences on a particular interstate firm is not sufficient to rise to a Commerce Clause burden. (quotation marks and citations omitted)). Even if the statute meant the demise of the data-mining industry as a wholean outcome I doubt, see infra note 22any ill-effects from that result would relate[ ] to the wisdom of the statute, not to its burden on commerce. Exxon Corp., 437 U.S. at 128, 98 S.Ct. 2207. The point is perhaps more easily understood in a different context. If, for example, every state decided to ban the use of firecrackers because of the risk of injury, the dormant Commerce Clause would not trump the legislative safety concerns and insulate the fireworks industry from extinction. Neither national uniformity nor any of the other traditional concerns underlying the dormant Commerce Clause are implicated here. The law does not erect barriers against interstate trade, Lewis v. BT. Inv. Managers, Inc., 447 U.S. 27, 35, 100 S.Ct. 2009, 64 L.Ed.2d 702 (1980), and its target is not interstate commerce as such. Rather, the transactions governed by the statute are restricted only because they are subsidiary steps in the regulation of in-state activity. [55] Indeed, the law's effect on individual businesses would be no different if every PDII were based in Maine. Nor does Maine's decision to restrict the use of certain prescriber-identifiable data make similar legislation more or less appropriate or necessary in other states. There is nothing in Maine's statute that affects other states' choices about whether, or how, to regulate prescriber-identifiable data within their own borders. As the Supreme Court observed in Exxon Corp., [t]he evil that appellants perceive in this litigation is not that the several States will enact differing regulations, but rather that they will all conclude that [similar] provisions are warranted. 437 U.S. at 128, 98 S.Ct. 2207. However, [i]n the absence of a relevant congressional declaration of policy, or a showing of a specific discrimination against, or burdening of, interstate commerce, we cannot conclude that the States are without power to regulate in this area. Id. at 128-29, 98 S.Ct. 2207. Nor do I see a way in which Maine could have promoted its interest `with a lesser impact on interstate activities,' Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 471, 101 S.Ct. 715, 66 L.Ed.2d 659 (1981) (quoting Pike, 397 U.S. at 142, 90 S.Ct. 844)a factor that is considered in Pike balancing. See, e.g., U & I Sanitation v. Columbus, 205 F.3d 1063, 1070-71 (8th Cir.2000). If Maine had regulated only in-state activitydirectly barring detailers working in Maine from using the opted-out prescribers' data in their sales pitchesthe impact on data miners would be the same. In such a regime, the out-of-state data miners would not be prohibited from selling the prescriber-identifiable data for marketing purposes, but the pharmaceutical companies would have no reason to buy it. [56] In sum, I conclude that section 1711-E(2-A) survives dormant Commerce Clause scrutiny even though in practical effect it regulates activity that occurs primarily beyond Maine's borders. The burden on interstate commerce (the reduction in the value of a particular type of business) is not the kind of burden that raises constitutional concerns. To the extent that burden is relevant to the Commerce Clause analysis, it is easily outweighed by the State's substantial interest in bringing the cost of prescription drugsand health care expenses in generalunder control. Cf. Pharm. Care Mgmt. Ass'n, 429 F.3d at 312 (describing a law aimed at reduc[ing] the costs of, and increas[ing] the public's access to, prescription drugs as designed to deal with `one of the serious problems of our time'). I therefore agree that the judgment of the district court should be reversed. IV. The Focus of Future Litigation This case has allowed us to put to rest the Commerce Clause challenge that was not properly teed up in Ayotte. In addition, in the period between our reviews of New Hampshire's and Maine's similar statutes, Stevens has reinforced my view that laws regulating the messages of pharmaceutical detailers restrict protectible speech, not conduct. Thus, as more of these cases evolve across the country, the legal argument and factual development should be framed by the Supreme Court's commercial speech doctrine under the First Amendment. That doctrine is the subject of ongoing debate among commentators and in the courts, including within the Supreme Court. Much of the ferment focuses on the narrow tailoring prong of the Central Hudson inquiry and how close the fit must be in any commercial speech case between the State's interest and the challenged restriction on speech. See Greater New Orleans Broad. Ass'n, Inc. v. United States, 527 U.S. 173, 184, 119 S.Ct. 1923, 144 L.Ed.2d 161 (1999) (recognizing the advocacy among judges, scholars and others for a more straightforward and stringent test for assessing the validity of government restrictions on commercial speech); see also Thompson v. W. States Med. Ctr., 535 U.S. 357, 388, 122 S.Ct. 1497, 152 L.Ed.2d 563 (2002) (Breyer, J., dissenting) (chastising the majority for applying the commercial speech doctrine too strictly in finding that a statute prohibiting the advertising of compounded drugs was not narrowly tailored); Ayotte, 550 F.3d at 96-97 (discussing the debate on Central Hudson 's continuing viability); Elizabeth Spring, Note, Sales Versus Safety: The Loss of Balance in the Commercial Speech Standard in Thompson v. Western States Medical Center, 37 U.C. Davis L.Rev. 1389, 1404 (2004) ([T]he Court is now applying the Central Hudson test in a manner approaching strict scrutiny review.). In addition, there is a claim by some that these particular laws should not be assessed as regulations of commercial speech, with the lesser scrutiny that attends such measures, but rather as content-based regulations of truthful speech on matters of profound public importance. Tribe, supra ; see also Rowe, 532 F.Supp.2d at 167 n. 14 (describing as a thorny question whether Maine's content-based regulation should be given intermediate or strict scrutiny and raising the possibility that the speech here is not purely commercial speech and is subject to strict scrutiny because it is a matter of public concern); cf. Tribe, supra (Even if the prescription restraint laws were subject to the more forgiving standard applicable to regulations of purely commercial speech, however, they would still be unconstitutional because they violate the core principle that the government may not restrict even commercial communication merely to block the dissemination of truth.). Although in Ayotte I found no merit in the argument that New Hampshire's statute should be analyzed as a content-based restriction on speech subject to strict scrutiny, see Ayotte, 550 F.3d at 83 n. 47; accord Sorrell, 631 F.Supp.2d at 447-48, [57] the contrary view has worthy proponents and undoubtedly deserves close consideration. Yet another source of difficulty is the quality of the record a state legislature must amass to prove that a statute advances its interest and extends no more broadly than necessary to achieve its objectives. I concluded in Ayotte that the district court had held the Attorney General to an overly demanding standard of proof. Here, too, the court underestimated the strength of the State's showing. As I explained in Ayotte, a state legislature's investigation cannot reasonably be expected to match the exhaustive investigation Congress conducts in connection with complex federal legislation. See 550 F.3d at 92-93 (referring to the `tens of thousands of pages' of materials acquired during three years of Congressional hearings on provisions of the Cable Television Consumer Protection and Competition Act of 1992). Although the extent of the required proof may differ, the question in both federal and state contexts is the same: whether the government is able to support its restriction on speech by `adduc[ing] either empirical support or at least sound reasoning on behalf of its measure[].' Id. at 93 (quoting Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 666, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994)). A further complexity, however, is whether the general principle of legislative deference should operate the same way in both settings, despite differences in the scope of the underlying record. Id. In Turner Broadcasting, the Supreme Court observed that Congress's findings were entitled to deference in part because the institution is far better equipped than the judiciary to amass and evaluate the vast amounts of data bearing upon legislative questions. Turner Broad. Sys., Inc. v. FCC, 520 U.S. 180, 195, 117 S.Ct. 1174, 137 L.Ed.2d 369 (1997) (quotation marks and citation omitted). The district court in this case puzzled over the appropriate level of deference for the legislature's findings, noting the subtle distinction between judicial deference and judicial respect to a legislature in a First Amendment case. 532 F.Supp.2d at 178. It noted the Ayotte trial court's conclusion that the legislature's predictive judgments were entitled to respect, but not deference, because there was nothing in the record `to support a conclusion that the legislature had established expertise in the regulation of prescriber-identifiable data.' Id. (quoting IMS Health Inc. v. Ayotte, 490 F.Supp.2d 163, 177 n. 12 (D.N.H. 2007)). [58] Yet the court also cited the Supreme Court's statement in Turner Broadcasting that the `obligation to exercise independent judgment when First Amendment rights are implicated is not a license to reweigh the evidence de novo, or to replace [legislative] factual predictions with our own.' Id. at 178-79, 117 S.Ct. 1174. Indeed, the Supreme Court has permitted litigants to justify speech restrictions by reference to studies and anecdotes pertaining to different locales altogether, or even, in a case applying strict scrutiny, to justify restrictions based solely on history, consensus, and `simple common sense.' Florida Bar v. Went For It, Inc., 515 U.S. 618, 628, 115 S.Ct. 2371, 132 L.Ed.2d 541 (1995) (citations omitted). The legislative records in New Hampshire and Maine were necessarily limited. Given the novelty of their statutes, neither State could offer empirical data showing the extent of the influence of prescriber-specific information on physicians' decision-making or proving the cost-cutting impact of their provisions. 550 F.3d at 93. Both States, however, adduced evidence of the impact of detailing generally and presented anecdotal evidence strongly indicating that sales pitches based on specific prescribing patterns have a particularly persuasive impact on drug choice. Id. at 94; Rowe, 532 F.Supp.2d at 172. New Hampshire offered expert evidence in defense of its view that alternative strategies, less burdensome on speech, would not suffice. Ayotte, 550 F.3d at 100. At this point in time, such evidence was sufficient in each case to establish[] a factual basis justifying the initiative. Id. at 94. Equivalent evidence may not be enough to support the adoption of similar legislation in other states, however, if more extensive quantifiable data becomes available. Cf. Ayotte, 550 F.3d at 93-94 ([I]t will be important going forward for the State to try to measure the cost-containment effect of its initiative, and it is possible that this ongoing assessment will indicate that the measure is not as effective as the State had hoped.). Without a doubt, the States must have flexibility to experiment with measures that will help them address the serious problem of spiraling drug costs. At the same time, the restriction of speech based on its content is a serious constitutional matter. The tension between those principles in laws such as those enacted in New Hampshire, Maine and Vermont presents a challenge to the Supreme Court's commercial speech jurisprudence that warrants the Court's attention and guidance.