LD 838, “AN ACT PROTECTING THE CONFIDENTIALITY
OF PRESCRIPTION INFORMATION”

TESTIMONY OF REP. SHARON TREAT

March 28, 2007

Joint Standing Committee on Health & Human Services

Senator Brannigan, Representative Perry, and members of the Health & Human Services Committee. I am Sharon Treat, and I represent House District 79, Farmingdale, Hallowell and West Gardiner. I am testifying today in support of LD 838, “An Act Protecting the Confidentiality of Prescription Information.”

What does the bill prohibit? LD 838 will prohibit the transfer of prescription drug prescribing information that identifies patients or the medical providers doing the prescribing, when the transfer is for the purpose of commercial marketing. “Commercial marketing” is defined as using the data for the purpose of pharmaceutical company sales or marketing or for analysis of prescriber-specific effectiveness of their sales force. These provisions would be enforceable though Maine’s consumer protection statute, the Maine Unfair Trade Practices law.

What does the bill allow? The bill very clearly does not restrict the sale and use of patient or prescriber-identifiable data for many other purposes, including for insurance reimbursement, dispensing prescriptions, utilization review, public health research, law enforcement purposes, controlled substances monitoring, adverse effects reporting, or compliance with Medicaid or private insurance formularies and rules. Further, the bill would allow the use of aggregated data even for marketing and other commercial purposes, so long as patients or prescribers couldn’t be individually identified either directly or indirectly.

Let me be clear: this bill will not interfere with safety recalls. To the extent that this data is used for safety recalls now (which is unclear), nothing in this bill would limit such use.

How does the information get sold currently? I have attached a flow chart depicting the actual process of what happens to the information contained in a prescription, including the identity of the prescriber. When a patient brings a prescription into a retail pharmacy, the information is often sent to what is called a “switching station” or electronic transmission intermediary. These companies work with data from different software programs and pharmacy benefits managers to put all the information into a similar format. The data is then transferred or sold to a data mining company. Sometimes the data may be sold by the pharmacy chain directly to the data mining company, and sometimes it is sold by the pharmacy benefits manager. Electronic prescriptions would go directly to the electronic transmission intermediary. Finally, a patient might fill a prescription through mail order, and in that case the information is processed differently. I have attached an article, “Using Data Mining to Get Brand Switching” that will walk you through a case study of how a pharmaceutical company uses detailer visits, data collection and analysis of doctors’ prescribing to effect what it calls a “targeted promotional intervention” to get doctors to switch from prescribing one drug to another.

Why is this bill necessary? This bill is a matter of protecting privacy; safeguarding public health; and reducing unnecessary prescription drug costs so that more people in Maine can have access to needed medications. On the privacy front, currently patient data is inadequately protected and prescriber data isn’t protected at all. On the cost end, the use of this information for marketing purposes is a key factor in the skyrocketing costs of prescription drugs and the increased usage of expensive brand-name medicines. And from a public health perspective, use of prescriber data for marketing facilitates the provision of biased and inaccurate information about health risks, and encourages the prescription of new products that might be riskier to patients than known agents on the market.

Use of personally identifiable prescriber data for marketing increases costs. Drug manufacturers and their salespersons or “detailers” use sophisticated techniques including data mining to target their marketing efforts to specific subsets of doctors who are most likely to be receptive to their sales pitches. These practices do increase costs, for they are extremely effective at increasing sales of the most expensive drugs. According to the data mining industry itself, “Research has shown that winning just one more prescription per week from each prescriber yields an annual gain of $52 million in sales.” Medical experts who have studied drug marketing techniques agree. According to Dr. Jerry Avorn and Dr. Aaron Kesselheim of Brigham and Women’s Hospital and Harvard Medical School and School of Public Health:

“Detailing is generally confined to high-margin, high-profit drugs, for which the manufacturer has a substantial incentive to increase sales. There is virtually no economic incentive for the manufacturers of generic drugs to send sales representatives to visit physicians about those products, even though there is clear evidence that these medications can provide therapeutically equivalent and much more affordable and cost-effective treatment in a wide variety of conditions. Thus, the work of pharmaceutical sales representatives drives drug use toward the most expensive products (as it is designed to do), and contributes to the strain on health care budgets for individuals as well as health care programs, especially Medicaid.”

These practices have public health implications. One study of detailers’ promotional brochures found that 15% of the pamphlets presented data that differed from the published studies on which they were based. In another study, 11% of the statements made by pharmaceutical representatives about drugs were scientifically inaccurate, and physicians generally failed to recognize the inaccurate statements. Detailers are also key promoters of off-label use of drugs, a consistent finding of the Prescrire sales reps monitoring network in France. This Network was created in 1991 at the initiative of a group of subscribers. For 15 years, members of the Network compared sales representatives’ claims with the information contained in the summaries of product characteristics. Results were remarkably consistent over the years - sales reps highlight the efficacy of the drugs they present, often for unapproved as well as approved indications. In contrast, adverse effects are not mentioned in three-quarters of visits.

Despite the claims of some that individualized detailing doesn’t affect doctors’ prescribing patterns, the opposite is true. These practices are in fact highly effective. According to Dr. Avorn and Dr. Kesselheim, the evidence demonstrates that “commercial sources play a disproportionate role” in shaping physician’s knowledge and prescribing decisions, and “[t]his influence is aimed primarily at increasing sales of the drugs being promoted, rather than at providing a balanced presentation of all the medical evidence.” Avorn and Kesselheim report that “A substantial number of physicians consider interactions with detailers to be their most influential source of information, and detailers’ importance is greatest among physicians who issue more prescriptions. In one study, 60% of physicians named commercial sources, such as detailers, as most influential in their first decision to prescribe a drug.” According to Avorn and Kesselheim, “Another study showed that meetings with pharmaceutical representatives were associated with changes in physician prescribing practices as well as requests by physicians to add the drugs to their hospitals’ formularies. Contact with detailers was shown to be the most consistent predictor of physicians’ early adoption of new pharmaceutical agents. Overall, many experts agree that there is a “strong, consistent, specific, and independent” association between physicians’ behavior and their exposure to detailers.

Avorn and Kesselheim conclude: “The studies we have cited indicate that more physician-specific detailing will lead to more prescriptions of brand-name agents, often with no additional patient benefit but at much higher cost to patients and to state-based insurance programs, which will continue to drive up the cost of health care in Maine. More patients will be exposed to the risks of heavily marketed pharmaceutical agents whose side effect profile is not fully evaluated, as well as to the risk that detailers may mislead physicians about the risk/benefit profile of particular agents by providing distorted or even incorrect information.”

Privacy concerns. The federal health information privacy law (Health Insurance Portability and Accountability Act, or HIPPA), is supposed to protect patient medical information, but it doesn’t always work in the case of prescriptions. HIPPA is not intended to address the privacy of the prescriber, and the result of data mining is that doctors and other medical providers lose their privacy involuntarily. Without obtaining permission, drug companies know from their prescribing habits how doctors think and how they behave. The more the companies know about how an individual doctor’s actual prescribing behavior is influenced by a specific marketing approach, and how many times a doctor prescribes each product in a drug class, the more closely they can target individual physicians, give them information that shows their product in the most favorable light, and exert pressure on them to change their prescribing habits.

Even with respect to patient privacy, there remain many concerns about HIPPA’s effectiveness and the lack of enforcement, which is why LD 828 addresses both patient and prescriber privacy, since Maine law is permitted to be stricter than federal law. Some physicians have raised concerns about patients still being able to be identified, especially in rural areas. In addition, the HIPPA rule allows health care providers to share patient medical records not only for the purposes of treatment, but also for "health care operations," which according to the Wall St. Journal, can include “myriad uses” including hiring outside companies to survey patients on customer satisfaction or hiring third-party marketers to advertise their products. As the Journal stated: “Over the past three years, millions of Americans visiting doctors' offices, pharmacies and hospitals have been handed forms and brochures discussing privacy rules under […HIPAA]. Many assume signing somehow protects their privacy. It doesn't. In fact, the disclosure notice essentially details the many ways a doctor can use and disclose medical information -- often without a patient's consent or knowledge. Medical providers have to ask for a signature. But signing isn't mandatory. And failing to sign usually doesn't change what a doctor can and can't do with a person's medical information.” As Karen Hinton, a spokesperson for Patient Privacy Rights, told the Journal: "It's impossible to violate HIPAA because there's such a big, huge loophole" allowing a variety of disclosures without consent.

Further, HIPPA simply isn’t being enforced. Although violations can result in fines, the Office for Civil Rights, which received more than 22,600 complaints between mid-April 2003 and Sept. 30, 2006, to date has not issued any fines. LD 838 includes an enforcement mechanism through the Unfair Trade Practices Act.

The AMA “opt out” program doesn’t address these concerns. The American Medical Association (AMA) sells data it collects on physicians, which is combined with prescription data from pharmacies and sold to health care information (data mining) organizations. In 2005, the AMA received $44.5 million for this database. The AMA opposes making prescriber data confidential for marketing purposes and has a built-in conflict of interest on this issue because such a large percentage of its income is directly tied to the sale and licensing of prescriber data. Yet a study by the Kaiser Family Foundation in 2001 found nearly three quarters of physicians disapprove of the practice of selling data on their prescribing practices for marketing purposes.

After the New Hampshire law was enacted last year (which is almost identical to LD 828), the AMA initiated an option in July 2006 to allow physicians to “opt out” of its data program. However, the “opt out” option is inadequate for many reasons:

• Many physicians do not know about the AMA opt out option; two thirds of the physicians in the U.S. are not AMA members, even though their data is also included to the AMA database.

• Even if a doctor opts out, the personally identifiable prescribing information on that doctor is still collected and sold to datamining companies and drug manufacturers, who may still use it to target their marketing efforts. The only limitation is that a drug detailer may not have direct access to the doctor’s specific information; however, the detailer may be told which doctors to target and how to spin their message based on that information.

• The AMA “opt out” only affects data collected by the AMA; other data is collected through pharmacies and other sources and is not affected by the AMA policies.

• The experience with “opt out” programs in other areas (credit card privacy, for example) is they are ineffective. In this case, physicians must remember to opt out every three years, and have been discouraged by the AMA from doing so. The information on the website about how to opt out was so negative that in October the New England delegates sponsored a resolution requiring the AMA to change the text to be more balanced (see Resolution with original website text attached). Since this part of the AMA website is not open to non-physicians I do not know whether it has been replaced yet.

I urge your support of this bill. It addresses three interrelated concerns: Prescriber and patient privacy; public health; and health care costs. The bill is carefully crafted to address real problems, while allowing datamining of prescriber and patient-identifiable prescription information for many purposes including law enforcement, compliance with formularies, safety recalls and public health studies.