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Pharmacies selling prescription information to data mining companies

David Harlow
Meds
June 30, 2011
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Walgreens is being sued by customers who are not happy that their prescription information – even though it has been de-identified – is being sold by Walgreens to data-mining companies.

The data privacy and security concerns surrounding the transfer of de-identified data are significant.  To “de-identify” what is otherwise protected health information under HIPAA, some outfits will simply strip data of 18 types of identifiers listed in federal regulations.  However, the relevant regulation also provides that this only works if “the covered entity does not have actual knowledge that the information could be used alone or in combination with other information to identify an individual who is a subject of the information.”

Thus, the problem with this approach is that, these days, nobody can disclaim knowledge of the fact that information de-identified by removing this cookbook list of 18 identifiers may be re-identified by cross-matching data with other publicly-available data sources. There are a number of reported instances of this sort of thing happening. The bottom line is that our collective technical prowess has outstripped the regulatory safe harbor.

Is this the basis of the lawsuit brought against Walgreens?  An objection to trafficking in health information that should remain private?  No.  The plaintiff group of customers is suing to share in the profits realized by Walgreens from trading in the de-identified data.

While I haven’t pored over the papers filed in this case, my guess is that there’s enough legal boilerplate in the Walgreens HIPAA notice of privacy practices given out and signed for up front by patients who fill prescriptions so that they do not have a claim worth much more than nuisance value.

This case reminds me of the landmark case of Moore v. Regents of the University of California, decided about twenty years back, where a leukemia patient wanted to share in the profits from a line of cells grown from cells harvested from his body by researchers who told him that his return hospital visits were for checkups and monitoring only.  He lost.

The specific governing rules in play are different, but I don’t see how the ultimate result would be much different this time around, especially since the Walgreens plaintiffs were probably given more information about how their goods might be used (in the notice of privacy practices) than Moore ever was.

Nobody asked me, but I would think that a more productive line of inquiry would lie with figuring out whether the data that is being sold – patient gender, state and age group; name of drug prescribed; and ID number of prescribing physician – could be combined with other data available out there to the folks buying these data from Walgreens and used to re-identify patient records.

Given the slightly-differently-de-identified insurance company records that are out there, and the profit motive of the data-mining companies, I would not be surprised if at least some of these de-identified records were easily re-identified, thus exposing Walgreens to liability for HIPAA violations.  The data-mining companies are almost certainly re-identifying the physicians, since that’s where the value in this whole exercise lies: targeted marketing to physicians based on their prescribing patterns.

(Regarding re-identification of patient information, consider the case of the Netflix prize, where de-identified video rental data could be re-identified by cross-matching with online consumer movie reviews – “Simply removing names does not ensure that data will remain anonymous. And the implications stretch far beyond the world of Netflix.”)

Of course, HIPAA violations just yield a fine, payable to the government (and we know how useful HIPAA CMPs can be in ensuring compliance) – there is no third-party liability under HIPAA – so it would be a stretch to translate them into a plaintiffs’ verdict involving cash.

David Harlow is a health care lawyer and consultant who blogs at HealthBlawg.

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Pharmacies selling prescription information to data mining companies
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