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

Heading: The Activities Regulated by the Statute

Text: Understanding the sequence of events implicated by section 1711-E(2-A) is crucial to understanding the statute's legal status. To begin with the end, the statute is designed to prevent pharmaceutical detailers working in Maine from using information about the prescribing habits of Maine prescribers to present targeted, and therefore more persuasive, sales pitches to those prescribers. The statute does not, however, regulate the detailers' interactions with the prescribers. Instead, the State seeks to achieve its objective indirectly by, in effect, placing a red flag on information about prescriptions written by Maine prescribers who opt into the statute's protection. The red-flagged information may not be used, sold or transferred for any marketing purpose by pharmacies, insurers and other entities that acquire it in the course of their business. [44] In practical effect, that prohibition rarely limits any commercial transactions in Maine. This is so because local Maine pharmacies routinely transfer their prescription information electronically to their out-of-state headquarters. [45] Although the red flag is attached to the information when those transfers are made, the statutory prohibition does not affect this first movement of the data because it is not for any marketing purpose. Most prescriber-identifiable data leaves the State in this permissible manner. The data is next transferred from the out-of-state pharmacy headquarters to the data mining companies  the plaintiffs in this case-who also are located outside of Maine. [46] The red flag imposes a significant restriction on those out-of-state transactions. Although data miners use prescription information for other reasons, including to generate reports for government and other nonprofit recipients, the most lucrative aspect of their business is to aggregate the information into reports that can be sold to pharmaceutical companies for use in marketing. [47] Hence, the pharmacies and data miners, although not themselves using the prescriber-identifiable data to market drugs, presumably must impose a contractual obligation on their customers not to use the information for that purpose in order to fulfill their obligations under section 1711-E(2-A). See Rowe, 532 F.Supp.2d at 169 n. 18 ([T]he PDIIs are assigned the responsibility to limit the pharmaceutical companies' use of the opt-out prescriber data.). How the State would enforce the statute if a pharmaceutical manufacturer does not abide by such a contract with a data miner is unclear. Perhaps the data miners would be deemed liable for failing to enforce the obligation unless they took action against the offending drug company; such action might include a refusal to continue selling the information to the company. [48] Whatever the specific mechanism for enforcement of the statute's prohibition, the statute's objective is to prevent the use of any prescriber-identifiable data obtained by the drug companies in sales pitches by the detailers in Maine who are the statute's real target. [49] As my description of the process reveals, however, achieving that objective involves raising the red flag in transactions that almost all occur beyond Maine's borders. Nearly all of the transfers between the information possessorsthe pharmacies and data miners and the information recipientsthe data miners and pharmaceutical companies are made out of state. So too are any contractual promises by the recipients to abide by the statute's limitation. The plaintiffs complain that this significant extraterritorial effect is impermissible under the dormant Commerce Clause. The State, however, maintains that the statute has only a spillover effect beyond its borders, and it argues that the law applies only to entities either located in Maine or having nexus with Maine, i.e., those sufficiently connected to the State to meet the requirements for personal jurisdiction. The State asserts that it is irrelevant that the main computers of the large retail pharmacy chains are located outside Maine because Maine is the source of the restricted information, and the electronic prescription data is initially entered into in-state computers. The State further emphasizes that the prescriptions are written by prescribers licensed by Maine and filled almost exclusively by State-licensed pharmacies, giving Maine a substantial interest in governing the dissemination and use of the prescription data. The difficulty of evaluating the parties' competing depictions of section 1711-E(2-A) begins with the choice of an appropriate framework for analysis.