HITECH First Amendment Challenge Delayed – HHS Promises Guidance and Agrees to Limited Enforcement Delay

The Department of Health and Human Services (HHS) revealed in court filings yesterday that it expects to issue guidance regarding prescription refill reminder programs before September 23, 2013.  It also stated that it will not enforce the restrictions in its new HIPAA Privacy Rule regarding refill reminders and other communications about drugs or biologics until November 7, 2013.  See Joint Motion (Adheris Inc. v. Sebelius).  The Court promptly issued an order granting the joint motion and vacating the parties’ briefing schedule.  Claiming First Amendment violations, Adheris’s complaint and motion for a preliminary injunction seek to enjoin HHS from enforcing its HITECH Act-based marketing restrictions for refill reminders.

The Impact of the New Privacy Rule on Refill Reminder Programs

Adheris, Inc. administers prescription drug adherence and compliance messaging to patients.  These “refill reminder” letters include educational information about the patient’s disease condition, the drug’s side effects, dosage information and effects of non-compliance.  Prior to the new Privacy Rule these messages did not require patient authorization because they fell within the “treatment” exception from “marketing” communications.

As we recently observed, HHS’s new Privacy Rule did away with the treatment exception for third-party sponsored communications where that third-party’s product or service is being marketed.  Adheris’s refill reminder programs, which are sponsored by pharmaceutical companies, now require authorization unless any compensation flowing to the pharmacy is “reasonable in amount.”  Adheris’s pleadings present a sense of urgency due to the “chilling effect” that the new Privacy Rule has had on refill reminder and other adherence and compliance programs since it issued January 25.  Adheris states that it provides refill reminders for 38 pharmacy chains, and many of these chains have expressed concerns about the Privacy Rule’s marketing restrictions.  Some, in fact, according to the suit, have stopped contracting with Adheris entirely.  And Adheris is not alone – over the past several months, various consumer groups, pharmacies and drug manufacturers have complained that the language concerning exemptions for refill reminders will, in many instances, put an end to these programs.  For example, as we previously noted, CVS recently announced the discontinuation of its refill reminder programs.

The primary source of angst for healthcare providers and others in the industry that are involved in refill reminder programs lies in the preamble of the new Privacy Rule, where HHS defines “reasonable in amount.”  HHS’s definition is narrow and considerably ambiguous, only allowing for certain expenses and excluding a return on investment altogether (or profit) for the pharmacies.  We suggested in our May blog post that HHS guidance on the “reasonable in amount” limitation could allow these programs to continue by allowing for broader limitations of permissible costs, making it permissible for providers to effectively provide patients with adherence and compliance messaging without having to obtain authorization.  HHS keeps promising to issue guidance.  Adheris may, however, be forced to move forward with its case if HHS fails to issue something promptly that clarifies these issues and expands the scope of the exception and the permissible costs.

The First Amendment Challenge

In the 2011 Supreme Court’s opinion in Sorrell v IMS Health, Inc., the court affirmed that “speech in aid of pharmaceutical marketing . . . is a form of expression protected by the Free Speech Clause of the First Amendment” and that the free flow of information “in the fields of medicine and public health . . . can save lives.”  Sorrell involved a Vermont statute that prohibited, absent physician opt-in, the sale disclosure and use of pharmacy records that reveal the prescribing practices of that doctor.  See our January 2013 blog which discusses Sorrell arguments.  In Sorrell, the Court applied a heightened standard of scrutiny to the Vermont statute, raising the bar from intermediate scrutiny which traditionally is applied in First Amendment cases involving commercial speech.  The Court subjected the Vermont statute to the heightened standard because it imposed content-based and speaker-based restrictions.

Adheris’s arguments rely on Sorrell’s application of “heightened scrutiny” because HHS’s marketing restrictions impose both content-based and speaker-based restrictions.  The marketing restrictions are content-based because they apply only to communications that encourage individuals to purchase or use a third party’s product or service.  The restrictions are also speaker-based because they discriminate against speakers who communicate in exchange for payment from a third-party whose product or service is being described.  Similar speech by other speakers would, however, not be subject to the same treatment under the rule.  The final rule preamble states, for instance, that funding of refill reminder programs by non-profits, such as “a breast cancer foundation” for mammography screening would not trigger the authorization requirement and it would be permissible for the pharmacy that sends the message to profit.  However, if a pharmaceutical manufacturer made the same payment for the same program, the payment and the resulting communication would not be permitted unless the “refill reminder” exception – including its limitations on compensation – was satisfied.

In applying a “heightened scrutiny” standard, the government must show that its attempt to restrict speech advances a substantial government interest.  In Sorrell, the Court found that Vermont’s justifications for restricting speech did not withstand heightened scrutiny.  Adheris’s pleadings similarly emphasize that HHS’s marketing restrictions do not directly advance a substantial government interest, which is perhaps best exemplified by HHS’s support of such communications in other contexts (e.g., Medicare Part D, MTMP, incentives for “meaningful use”).  In addition, HHS cites no harms or dangers of refill reminders.  Indeed, there are significant benefits of refill reminder programs (e.g., adherence and compliance messaging results in fewer hospitalizations, lower mortality, and cost savings).  Furthermore, HHS’s refill reminder restrictions serve no legitimate privacy interests.  Rather, HHS is restricting Constitutional speech by treating adherence and compliance messages differently depending upon who compensates the speaker and whether the speaker derives a profit.

A Resolution?

Given the well-recognized benefits of adherence and compliance messaging, public interests will be best served with prompt resolution of this issue and it appears that HHS recognizes that Adheris’s claims may be meritorious.  HHS has slowed the judicial process temporarily, so the question is whether HHS will issue guidance that adequately addresses industry concern regarding the restrictions on refill reminders so that these programs can continue to move forward.  The parties are required to file a status report on September 27 and we are eager to see where things stand at that point.

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