Walgreen accused of selling patient data

NEW YORK, March 11 Fri Mar 11, 2011 5:19pm EST

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NEW YORK, March 11 (Reuters Legal) - A lawsuit filed in California this week accuses national drug-store chain Walgreen Co of unlawfully selling medical information gleaned from patient prescriptions, another front in the battle over personal information.

Unlike suits that focus on patient privacy, the plaintiffs accuse Walgreen of depriving them of the commercial value of their own prescription information.

According to the suit, brought by Todd Murphy on behalf of his two daughters and the rest of the class, Walgreen sells the prescription information to data mining companies who resell it to pharmaceutical companies for marketing purposes. The practice allows drugmakers to target physicians considered high-volume prescribers and those most willing to prescribe new medications, it said.

Walgreen spokesman Robert Elfinger said the company had just learned of the lawsuit and declined to comment.

As a measure of the information's value, the suit cites Walgreen's 2010 annual filing with the Securities and Exchange Commission, which lists "purchased prescription files" as intangible assets worth $749 million.

"We believe this information belongs to the patient who paid for the drug, not the pharmacy," said plaintiffs' lawyer Jeffrey Krinsk. The plaintiffs also blame the practice for driving up medical costs by perpetuating the sales of high-priced brand drugs instead of cheaper generic alternatives.

Krinsk's law firm, Finkelstein and Krinsk, has previously sued Walgreen in Florida state court for allegedly giving pharmaceutical companies access to prescription records. The judge granted Walgreen summary judgment last September, finding no proof that the company had released patient information.

Krinsk has also sued drug retailer Longs Drugs for violating California's Confidentiality of Medical Information Act. He said the plaintiffs voluntarily dismissed that case after the judge ruled that the pharmacy's practice of selling prescription information did not violate medical privacy and confidentiality laws.

The focus of the latest suit, filed on Tuesday, shifts from privacy to unlawful business practices. Without identifying individuals, Walgreen sells data that includes the patient's sex, age group, state, the ID number of the prescribing doctor and the name of the drug.

Similar class actions have surfaced elsewhere in the country. On Monday, the Philadelphia Federation of Teachers Health and Welfare Fund filed a class action in Pennsylvania court against CVS Pharmacy for allegedly selling customer's private information to Eli Lilly and Co, Merck, AstraZeneca and Bayer.

(Reporting by Terry Baynes of Reuters Legal; Editing by Amy Singer and Eddie Evans)

(This article first appeared on Westlaw News & Insight, www.westlawnews.com)

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