Stephanie Saul (*) recently reported that pharmaceutical companies (Pharma in short) buy doctors' drug prescription histories to boost their sales.
Modern Big Brother's motto is: (your) data is (my) money. In the instance, it is doctors' data and doctors have known about this practice for some time. This issue simply happens to catch some light reflected from the current legislative debate in the US about personal credit reporting (**).
Nothing new under the sun. But let us draw a simplified chart to highlight the economics underlying the issue.
Keep in mind that this chart represents money flows associated with data flows, not with health care. Governmental agencies redistribute some tax money among individuals. But ultimately individuals bear payments made by Pharma for medical data through increased prescription costs, either directly to pharmacies or through insurance premiums.
When money and data flow in opposite directions, as between Pharma and pharmacies, market economics ensure optimal outcomes. But notice how pharmacies receive data from doctors at no cost to them. When an economic agent taps a resource for free, academics call it an "externality". Nice word to cover up a failure of their theory. When applied to natural resources, we prefer to call it "pollution" and "privacy invasion" when applied to confidential information.
To address market failures, the first solution is to pass a law. Hence the current initiatives reported by Stephanie Saul by the states of New Hampshire, Arizona, Hawai and West Virginia. One should be very careful however when criminalizing an economic activity, especially if it is information-related. It is sure to create criminals. Do we need to send more money to foreign hacker gangs?
A better solution would be to remove the externality, i.e. to find a market solution where data and money flows balance each other.
Suppose the following conditions are satisfied:
Going from tools to solution would require some investment, no doubt. Also prescription data resellers would loose their free lunch.
- The first two conditions ensure medical research and marketing has access to all the necessary statistical data.
These conditions can be met using a technology called confidential data mining.
- doctors' prescription histories are kept confidential, stored in data warehouses administered by independent actors
- these actors sell data mining services to Pharma, subject to confidentiality measures, on behalf of the doctors' employers
For more information see Professor Xiaobai Li of University of Massachusetts at Lowell
- The last two conditions ensure an objective, balanced, open information market matching both doctors' and Pharma's interests.
These conditions can be met using a technology invented by ePrio for guaranteeing total confidentiality and mutual interest in matching.
- for a fee, Pharma can target doctors according to their prescription practices without having access to the data
- doctors receive educational (CME) credits for matching their professional interests against new offers from Pharma
For more information see ePrio's services
But instead of being criminalized, the underlying economic activities would receive the increased productivity coming from a working market.
- (*). Doctors Object as Drug Makers Learn Who's Prescribing What, by Stephanie Saul (New York Times) - May 4, 2006
- (**) for a peek at current US states and Congress initiatives, check this Google search