Company That Knows What Drugs Everyone Takes Going Public https://www.forbes.com/sites/adamtanner/2014/01/06/company-that-kn...

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Company That Knows What

Drugs Everyone Takes Going
Public
Adam Tanner Former Contributor
I write about the business of personal data.

Jan 6, 2014, 08:43am EST

This article is more than 10 years old.

Nearly every time you fill out a prescription, your pharmacy sells
details of the transaction to outside companies which compile and
analyze the information to resell to others. The data includes age
and gender of the patient, the name, address and contact details
of their doctor, and details about the prescription.

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A 60-year-old company little known by the public, IMS Health, is

leading the way in gathering this data. They say they have
assembled “85% of the world’s prescriptions by sales revenue and
approximately 400 million comprehensive, longitudinal,
anonymous patient records.”

IMS Health sells data and reports to all the top 100 worldwide
global pharmaceutical and biotechnology companies, as well as
consulting firms, advertising agencies, government bodies and
financial firms. In a January 2nd filing to the Security and
Exchange Commission announcing an upcoming IPO, IMS said it
processes data from more 45 billion healthcare transactions
annually (more than six for each human on earth on average) and

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collects information from more than 780,000 different streams of

data worldwide.
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Although consumers are not informed about such transactions,

they have taken place for years. “The selling of prescription data
really began in earnest in the late 1980s,” said Per Lofberg,
executive vice president of CVS Caremark Corporation, the
nation’s largest pharmacy. “There was some controversy around
that. It wasn't so much for the patient privacy, because none of
this has any patient identifiers, but it was controversial in relation
to physician privacy.”

Pharmaceutical companies want to know what doctors are

prescribing what medications. If Pfizer knows that a doctor is
prescribing Cialis made by rival firm Eli Lilly, they might have a
sales rep make the case for Viagra instead. “That allows
pharmaceutical manufacturers basically to profile individual
doctors in terms of what they are prescribing, what their practice
looks like, whether they are using drug A or drug B,” Lofberg said.

Privacy experts have expressed concern that even anonymized

health records, pieced with other information, could identify
individuals. This issue is one that IMS singled out in its filing as
one of the risk factors to its business.

“There is ongoing concern from privacy advocates, regulators and

others regarding data protection and privacy issues,” the
company said. “Also, there are ongoing public policy discussions
regarding whether the standards for de-identified, anonymous or
pseudonomized health information are sufficient, and the risk of
re-identification sufficiently small, to adequately protect patient
privacy.”

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IMS says the backbone of their information processing of the 45

billion records annually takes place in Carlstadt, New Jersey.
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They also have teams of 1,200 India, 500 in the Philippines, 200
in China and 200 in Spain, the filing said.

Could clever outside data scientists actually unmask people’s

identities through their anonymized prescription records?

“It could be done. Are there pretty serious penalties for trying to
do that and then doing something with it? Yes,” says Bob Merold,
a health care industries consultant who worked as an executive
for IMS for nine years. “Obviously, if somebody wants to do it,
they can and then they worry about the consequences. But the
general feeling is that the benefits from having this stuff,
particularly in terms of controlling the health care system and
spending, is so much greater that we have to live with the risks
and be vigilant on the enforcement.”

Deborah Peel, a Freudian psychoanalyst who founded Patient

Privacy Rights in Austin, Texas, has long been concerned about
corporate gathering of medical records.

“I've spent 35 years or more listening to how people have been

harmed because their records went somewhere they didn't
expect,” she says. “It got to employers who either fired them or
demoted them or used the information to destroy their
reputation.”

“It's just not right. I saw massive discrimination in the paper age.
Exponential isn't even a big enough word for how far and how
much the data is going to be used in the information age,” she
continued. “If personal health data ‘belongs’ to anyone, surely it
belongs to the individual, not to any corporation that handles,

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stores, or transmits that information.”

Companies dealing in health data must follow the 1996 Health BETA

Insurance Portability and Accountability Act (HIPAA),

which sets out privacy standards on who can use and disclose
personal health data. “For decades, our market research business
was built using health information that did not identify a patient
—long before the passage of HIPAA or other privacy laws,” IMS
said in its SEC filing. “We continue to engage in strong privacy
and security practices in the collection, processing, analysis,
reporting and use of information.”

Adam Tanner

I am a fellow at Harvard University’s Institute for Quantitative Social

Science and author of "What Stays in Vegas: The World of Personal Data --
Lifeblood of Big... Read More

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