BILL ANALYSIS
AB 2112
Page 1
Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2112 (Monning) - As Amended: April 7, 2010
SUBJECT : Prescription Record Privacy Act
SUMMARY : Prohibits a person or entity from selling or releasing
to a third party any physician prescribing data for marketing
purposes, as defined, makes specified exceptions, and would
require a person or entity that knowingly fails to comply with
these provisions be subject to a specified administrative fine.
Specifically, this bill :
1)Establishes the Prescription Record Privacy Act (PRP Act) and
makes legislative findings regarding the State's interest in
improving the quality and lowering the cost of health care,
restraining influence by pharmaceutical industry marketing
representatives over prescribing decisions, safeguarding the
confidentiality of physician prescribing data, and states the
Legislature's intent to regulate the use of physician
prescribing data for marketing purposes.
2)Defines "physician prescribing data" as information that sets
forth a prescription written on or after the operative date of
this bill by a physician in combination with any data that
individually identifies the physician, and other specified
information.
3)Defines "marketing" as any activity by a company making or
selling prescribed products, as defined, or by that company's
agent, intended to influence prescribing or purchasing choices
of its products, including, but not limited to advertising,
publicizing, or sharing information about a product,
identifying individuals to receive a message promoting use of
product, as specified; planning the substance of a sales
representative visit or communication or the substance of an
advertisement, or other promotional message or document;
evaluating or compensating sales representatives; identifying
individuals to receive any form of gift, product sample,
consultancy, or other specified compensation; and, advertising
or promoting prescribed products directly to patients.
4)Clarifies that "release to a third party" or "release" does
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not include communication or use of physician prescribing data
among covered entities in an organized health care
arrangement, as defined.
5)Prohibits a person, entity, or pharmacist, as defined from
selling or releasing physician prescribing data to a third
party for marketing purposes.
6)Clarifies that nothing in this bill is intended to:
a) Limit or restrict the release of physician prescribing
data that is necessary for any specified governmental
oversight or regulatory activity, including specified law
enforcement or public health authority, or is necessary to
process a health care claim;
b) Limit or restrict otherwise lawful activities of the
pharmacist; and,
c) Limit or prohibit an individual patient from releasing
any identifiable information relating to a prescription
that the patient received, or that the physician wrote,
that is not otherwise restricted or prohibited by law.
d) Limit or restrict the release of physician prescribing
data to any of the following:
i) A licensed health care professional, if the release
is directly related to providing health care to a
patient; a health insurer or disability insurer, health
plan, pharmacy benefit manager, employee-sponsored health
benefit plan, or their contractors, if the data is
directly related to administering or monitoring the use
of a health care benefit;
ii) An authorized operator of a program related to the
treatment of chronic and life threatening conditions, as
defined; an employee benefit plan or other specified
entity responsible for paying for health care services
for a patient, if the data is necessary to complete or
verify a health care transaction for a prescription;
iii) Any health plan, contractor, or other health care
professional or facility for purposes of diagnosis or
treatment of a patient; or,
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iv) Use by a health plan, health insurer, or disability
insurer, as specified.
e) Clarifies that nothing in this bill is intended to:
i) Prohibit the release of aggregate prescription data
to any individual or entity provided the data does not
include identifiable physician prescribing data;
ii) Prohibit the release of physician prescribing data
that is solely intended to be used for clinical trials or
established research projects conducted in accordance
with protocols, guidelines, or standards recognized by
the federal Health and Human Services Agency, the federal
Food and Drug Administration (FDA), the National
Institutes of Health, the National Cancer Institute, or
the Centers for Disease Control and Prevention.
Clarifies that any entity receiving physician prescribing
data pursuant to this section shall not use it for any
other purpose;
iii) Limit or restrict the release of physician
prescribing data for purposes of providing the physician
with information regarding action by the state or by the
FDA limiting or disallowing the sale or use of a specific
drug, or to provide the physician with information
regarding adverse events related to a specific drug or
medical device; or,
iv) Prohibit the otherwise lawful use or release of
physician prescribing data for litigation purposes.
7)Authorizes the Secretary of the California Health and Human
Services to adopt regulations necessary to implement this bill
and requires them to impose an administrative fine of at least
$10,000 and not more than $50,000 per violation of the
regulations.
8)Requires the Attorney General to enforce payment of specified
penalties.
9)Authorizes the Office of Health Information Integrity, upon
receipt of a complaint of a violation of specified provisions,
to conduct an administrative hearing, in accordance with the
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Administrative Procedures Act, and to assess a fine against a
person or entity found to have committed the violation.
10)Clarifies that if any provision of this act is held invalid,
the remainder of the act or the application of the provision
to other persons or circumstances is not affected.
11)Clarifies that this bill does not regulate conduct that takes
place outside the state.
12)Clarifies that nothing in the PRP Act shall be interpreted to
regulate the content, time, or manner of any discussion
between a prescriber and his or her patient, or a prescriber
and any person representing a prescription drug manufacturer.
13)Clarifies that any entity receiving physician prescribing
data may not use the data for any other purpose.
EXISTING LAW :
1)Prohibits, under the Confidentiality of Medical Information
Act (CMIA), a health care provider, plan, or contractor from
disclosing medical information about a patient, health plan
enrollee, or subscriber without first obtaining express
authorization, subject to certain exemptions.
2)Prohibits, under CMIA, health care providers, plan
contractors, subsidiaries, and affiliates from intentionally
selling or otherwise using a patient's medical information for
any purpose not necessary to provide health care services to
the patient, unless expressly authorized.
3)Under CMIA, defines marketing as making a communication about
a product or service that encourages recipients of the
communication to purchase or use the product or service, and
makes specified exceptions to the definition.
4)Existing federal law, the federal Health Insurance and
Accountability Act provides that a health care provider or
plan may not market to a patient without prior authorization.
5)Exempts the following from the definition of marketing:
a) Communications made to describe a health-related product
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or service that is provided by, or included in a plan of
benefits of the provider;
b) Communications made for the treatment of the individual;
or,
c) Communications made for case management or care
coordination, or the recommended alternative treatments to
an individual.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THE BILL . According to the author, this bill will
prohibit pharmaceutical companies from using physician
prescribing data for marketing purposes. The author believes
that using prescribing information for marketing purposes
increases health care costs, promotes irrational drug
selection, threatens the professional integrity of the medical
profession, and promotes harassing and invasive marketing
practices by pharmaceutical companies. Additionally, the
author states that prescription drugs are one of the fastest
growing health care expenditures as pharmaceutical companies
have an interest in encouraging doctors to prescribe newer,
more expensive drugs. This bill is not intended to prevent
pharmaceutical company representatives from providing
information about pharmaceuticals to physicians; it will
simply ban pharmaceutical companies from using a physician's
prescribing habits for marketing purposes.
2)HEALTH INFORMATION ORGANIZATIONS. Several entities collect
data on physician prescribing, including pharmacies, health
plans, pharmaceutical benefit managers, and companies that
specialize in collecting and analyzing prescription data.
Health information organizations (commonly referred to as data
vendors) collect prescription data from a variety of sources.
According to IMS Health, Inc., the largest among
pharmaceutical data vendors, they receive data from more than
139,000 data suppliers covering 730,000 individual dispensing
sites worldwide. The vendors then correlate the data with
individual doctors' identities by purchasing a licensing
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agreement with the American Medical Association (AMA), which
maintains a database of all physicians. This information
allows data vendors to produce detailed analyses of the
prescribing habits of physicians. The data vendors then
analyze the data by geographic area and practice specialty,
and sell the information to pharmaceutical manufacturers who
use the information to better understand the prescribing
habits of particular physicians, which assists in their
marketing efforts. This practice is commonly known as
"physician detailing," a practice that has been subject to
controversy in the past. The data vendors also provide
information to public health and law enforcement agencies.
3)AMA DATABASE . The AMA maintains a database of doctors and
medical students practicing or trained in the United States,
which is called the Masterfile, used to identify doctors.
According to the AMA, while data verification and
authentication are the primary purpose for the Masterfile, it
also serves as a revenue source. Companies, such as IMS
Health can access the Masterfile, provided they adhere to
strict usage agreements. In response to concerns from
physicians who desired to keep their prescribing information
private, the AMA created a Physician Data Restriction Program
(PDRP) in 2006, which is a Web based system that allows
physicians in the United States, regardless of whether they
are AMA members, to deny pharmaceutical sales representatives
access to their individual prescribing data. The PDRP also
allows physicians to report concerns about inappropriate use
of prescribing data by a specific pharmaceutical sales
representative, among other features. Registering for PDRP
does not stop a pharmaceutical sales representative from
visiting a particular physician it simply denies access to
individual prescribing preferences. Physicians who register
for PDRP have their data restricted infinitely unless he or
she chooses to reverse registration.
4)INFORMATIONAL HEARING . In 2004, The Senate Judiciary
Committee held an informational hearing on the collection and
use of physician prescribing information by data vendors. At
that hearing, the California Medical Association (CMA) raised
a number of concerns about the activities of the data vendors
and criticized the marketing practices of manufacturers that
obtained data from data vendors, particularly when sales
representatives made sales pitches that revealed how much
representatives knew about the doctor's prescribing patterns.
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Additionally, CMA argued that the collection and sharing of
physician-identified prescribing data raises privacy and
public health issues that should be addressed by the
Legislature. The data vendors and pharmaceutical industry
argued that doctors should not have a privacy interest in
their professional conduct, as privacy is a right that has
been afforded only to individuals. Extending the right of
privacy to professional conduct would be unusual and set a bad
precedent. The data vendors also argued that doctors' primary
concern appears to be the marketing practices of sales
representatives, and that regulation of data collection or
sharing would be unjustified and detrimental to the many
public health uses of the data.
5)OTHER STATES . In 2006, New Hampshire enacted a Prescription
Information Law that prohibited the transfer of patient and
prescriber information for commercial use. The law was the
first of its kind in the nation, and other states, such as
Maine and Vermont have now passed similar laws as well. After
New Hampshire passed its law, data mining companies challenged
the law in IMS Health Inc. v. Ayotte , (D.N.H. 2007) 490 F.
Supp. 2d 163. The U.S. Court of Appeals for the First Circuit
upheld the New Hampshire law, ruling that it did not violate
the First Amendment as it regulated conduct, rather than free
speech and did not violate the Commerce Clause because it only
affected in-state transactions. On June 28, 2009, the U.S.
Supreme Court declined to review a federal appeals court
ruling that upheld a New Hampshire law.
6)RISING COST OF PRESCRIPTION DRUGS . According to a recent
report by the Kaiser Family Foundation, spending on
prescription drugs in the U.S. in 2006 was five times higher
than the amount spent in 1990 (rising from $40.3 billion to
$216.7 billion in 2006). The report attributes three main
factors driving the cost, which are: increased use of
prescription drugs; increased prices of prescription drugs;
and, changes in the types of drugs used (more costly specialty
drugs). Additionally, the report mentions that increases in
prescription drug use and shifts to higher cost drugs are due
to advertising by pharmaceutical companies and increased
coverage for prescription drugs. Last of all, the report
cites that pharmaceutical manufacturers were among the most
profitable industries in the nation from 1995-2002, with
profits (profits as a percent of revenues) of 15.8% in 2007,
compared to an average of 5.7% for all other Fortune 500
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firms.
7)ARGUMENTS IN SUPPORT . The California Medical Association
states that this bill will stop the current pharmaceutical
practice of using physician prescribing data to directly
target and affect prescribers' practices. According to the
CMA, studies have shown that many prescribers are susceptible
to high pressure tactics, which this bill intends to stop. In
a white paper by CALPIRG on the practice of pharmaceutical
detailing, CALPIRG states that pharmaceutical detailing is on
the rise and more than doubled between 1996 and 2000.
Supporters also point to research conducted by Dr. Margaret
Chren of the University of California, San Francisco, who
found that "physicians were more likely to have requested
drugs manufactured by specific companies if they had met with
the pharmaceutical sales representatives from those companies
or had accepted money from those companies." The supporters
believe that the practice of detailing erodes the public's
trust and undermines the physician-patient relationship. Last
of all, AARP supports this bill because the practice of data
mining has been shown to increase the costs of providing
medical care by contributing to the spiraling cost of brand
name drugs.
8)ARGUMENTS IN OPPOSITION . According to IMS Health, this bill
would greatly impede its ability to provide timely
evidence-based treatment information that improves the quality
of health care, protects patients, reduce costs, and
contributes to the development of more effective drug
therapies. IMS Health and the Pharmaceutical Research
Manufacturers of America argue that the FDA has recognized and
reinforced the critical value of prescriber data to address
the needs of patient safety. The federal Food and Drug
Administration Amendments Act of 2007 required the FDA to
implement Risk Evaluation and Mitigation Strategy (REMS) from
all pharmaceutical drug manufacturers for certain high risk
medicines to ensure that the benefits of the drugs outweigh
the risks. Additionally, REMS also includes mitigation plans
to address drug recalls, diversion, and counterfeit drugs.
The opponents believe that prescriber data is crucial to
creating an effective REMS. The opponents also state that
physicians currently have the ability to stop their
prescribing information from being made available to others
through the AMA's PDRP system as described above.
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9)PREVIOUS LEGISLATION : AB 262 (Chan) of 2004 would have
prohibited pharmacists and other entities that have access to
physician prescribing data from selling such data except to a
data vendor, required the Medical Board of California to
create and administer a "Do Not Use" list for physicians, who
do not wish their prescribing data to be shared with data
vendors, and prohibited data vendors or their sources of
information from releasing or selling any prescribing data for
physicians included on the list.
10)TECHNICAL AMENDMENTS :
a) On page 5, line 23 after "not" insert "use,"
b) On page 7, line 21 strike out "disclosure of a regulated
record" and insert " release of physician prescribing data
for marketing purposes, as defined"
11) DOUBLE REFERRAL : This bill has been double-referred.
Should this bill pass out of this committee, it will be
referred to the Assembly Committee on Judiciary.
REGISTERED SUPPORT / OPPOSITION :
Support
AARP
American Civil Liberties Union
American Federation of State, County, and Municipal Employees,
AFL-CIO
California Academy of Family Physicians
California Labor Federation
California Medical Association
California Nurses Association
California Society of Anesthesiologists
CALPIRG
Consumers Union
Disability Rights California
Privacy Rights Clearinghouse
Opposition
1-800 CONTACTS
Accredo Health Group
Amgen
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AstraZeneca
BIOCOM
California Healthcare Institute
California Pharmacists Association
California Retailers Association
Daiichi Sankyo
Eisai Inc.
Express Scripts, Inc.
IMS Health, Inc.
Medco Health Solutions, Inc.
National Association of Chain Drug Stores
Pharmaceutical Research and Manufacturers of America
Walgreens
Analysis Prepared by : Martin Radosevich / HEALTH / (916)
319-2097