CA Senate Caves to Drug Industry, Approves Bill Allowing Marketing Firms to Access Prescription Drug Records Without a Patient’s Consent

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Santa Monica, CA — The California Senate passed a bill today that will allow marketing firms, like bill sponsor Adheris, to gain access to a patient’s private prescription drug records without their knowledge.  The bill will now be considered by the state Assembly.

Bill sponsor Adheris Inc, previously Elensys, changed its name in 2004 following consumer outcry over privacy violations.  A pending class-action lawsuit in California alleges further privacy violations against Adheris. In the last 2 years, the bill author, Senator Ronald Calderon, has received at least $21,690 from drug companies and others that will benefit from the legislation.

"There is nothing more private than our personal medical records, but this bill would let drug companies peek in our medicine cabinet to boost their profit. The Senate has traded patient privacy for campaign contributions from the drug industry and a disgraced company with a history of privacy violations," said Jerry Flanagan, Consumer Watchdog. "At a minimum, patients must be asked and give consent before their medical records are traded or sold. We urge the Assembly to reject this bill unless it is amended to require a patient’s informed consent."

The bill would allow companies like Adheris, the bill sponsor, to access patients’ prescription drug purchases, putatively only for the purpose of communicating with patients to increase "adherence" to the scheduled regimen.  The bill is premised on the idea that mailed reminders will help ensure that patients take their medications. The bill sponsor provides no evidence to support the claim. Further, if in fact a reminder to take medication was the goal of the bill, the pharmacy itself could send the reminder without necessitating the transfer of private medical data to a third-party business.

Consumer Watchdog raised the following concerns:

* Bill sponsor Adheris Inc, previously Elensys, changed its name in 2004 following consumer outcry over privacy violations.  A pending class-action lawsuit in California alleges further privacy violations against Adheris.

* Adeheris has never provided any evidence that its "service" leads to better compliance with drug schedules.  If such compliance was the real goal of the bill, the pharmacies themselves, not a third party marketing firm hired by the drug industry, could send the mailings.

* California has one of the nation’s strongest medical privacy laws. Under the Confidentiality of Medical Information Act, direct mail marketing to patients by pharmaceutical firms is not permitted unless the patient affirmatively gives his/her consent. This bill would create an exception to this strong protection for prescription drug marketing companies like bill sponsor Adheris.

* The new amendments to the bill purportedly allow a consumer to "opt-out" of receiving mailings.  However the amendment still allows Adheris to access a person’s prescription drug list and medical information without their knowledge.  Also, if the person did not see the "opt-out" provision in the stack of paper work given to them by the pharmacist, or did not understand its import, they effectively waive their privacy rights (which is protected in the 2nd sentence of the CA constitution).

* Once private medical information is transferred electronically it is vulnerable to theft, accidental leaks, and misuse.

* The Confidentiality of Medical Information Act requires that patients "opt-in" to the sharing/sale/transfer of private information by giving their affirmative consent before information is transferred.  SB 1096 must be amended to require the same "opt-in" standard.


The Washington Post

May 3, 2000, Wednesday, Final Edition

After Privacy Flap, a New Name; Other Changes at Prescription-Reminder Firm
Less Clear

Robert O’Harrow Jr., Washington Post Staff Writer


LENGTH: 917 words

Two years after Elensys Care Services Inc. ran into an explosion of disapproval over its use of pharmacies’ confidential prescription records, the Massachusetts database-management company has taken an unusual approach to public relations.

It went away.

Without issuing a news release, Elensys dropped its old name and, in state documents filed last fall, became Adheris Inc. The company still helps drugstores to remind patients to take medication on time. It has the same  executives, the same address at a Woburn, Mass., office park, the same telephone number.

But gone is the name that came to symbolize the growing unease about personal privacy, after people in the Washington region learned that CVS, Giant and other pharmacies were sending personal medical information to Elensys without their permission.

Elensys used the data to identify customers who had not refilled prescriptions and send personalized letters urging them to do so. Elensys also sent out materials about drugs, on behalf of manufacturers who paid a fee, to customers with particular ailments.

So fierce was the backlash from customers that CVS and Giant quickly apologized publicly and cut ties to the company. Several customers went after Elensys, CVS and some drug companies in a class-action lawsuit in Massachusetts for allegedly breaching their privacy. The name Elensys is cited on Capitol Hill during discussions about privacy.

At the time, Elensys officials said the company acted as an agent of the chain drugstores and didn’t forward patient information on to pharmaceutical firms or other outside parties.

"I wouldn’t blame them for not wanting to be associated with the conduct they’re accused of," Jeffrey Krinsk, a San Diego lawyer who has brought a class-action lawsuit against Elensys, said of the name change. "Though it may be old wine in a new bottle, the new bottle will be more useful in terms of public relations, in presenting themselves to new clients."

While changing corporate names is unusual, Elensys may not have had much of a choice, said Matthew Gonring, a managing partner at Arthur Andersen & Co. and a communications lecturer at Northwestern University. A tainted brand
can scare away new clients, he said.

"Once a name is tarnished to a certain degree, it’s less expensive to start up under another name," he said. "That can be a legitimate business choice."

Adheris officials declined to be interviewed. In an e-mail response to questions, executive Matthew P. Glaser said, "We changed the name as part of  a branding process for the company." He added: "As a private company, we did not feel it was important to make a public announcement."

Glaser said Adheris does not gather personally identifiable information from pharmacies, saying that "Adheris’ proprietary technology eliminates the need for patient information to come to Adheris."

But in a recent letter to the Department of Health and Human Services,
Adheris President Daniel Rubin expressed concern that privacy regulation
proposed by the agency might force the company to get patient permission to obtain personally identifiable information from pharmacies. Rubin strongly urged the agency to exempt companies such as Adheris from such restrictions.

"Requiring prior authorization would create a significant logistical burden
on pharmacists, thus seriously hindering the effectiveness of these programs," Rubin wrote in a letter posted on an agency Web site. Under the Adheris approach, patients can opt out of the company’s programs, Rubin wrote.

Glaser said the company does not use its data-management skills for direct-to-consumer marketing campaigns, which have proliferated in recent years. He said "Adheris helps pharmacies provide information to their customers about their prescriptions as written by their physicians. Adheris does not assist or get involved in direct-to-consumer advertising

That statement appears to be at odds with the Adheris Web site, which touts
the ability of the company to measure the effectiveness of such campaigns.

"Adheris can quantify the effectiveness of your direct-to-consumer advertising initiatives in terms of measurable increases in prescription adherence or acquisition," the Web site says. "We can provide you with statistically valid measures of return on your DTC investments."

Adheris officials didn’t return phone calls about that issue.

One Adheris backer is Grey Healthcare Group Inc., which helps pharmaceutical companies with direct-to-consumer marketing campaigns. Grey Healthcare became an investor and formed a "strategic partnership" with Adheris in the summer of 1998, according to Grey Healthcare spokesman Bob Pearson.

Pearson said his company has no intentions of using Adheris for advertising purposes. Instead, Pearson said, Grey Healthcare intends to use Adheris to deliver "pharmacy education" materials to patients. "How do you actually get
information out to targeted audiences," Pearson said. "This is potentially one way to do that."

Judging from the company’s Web site, Adheris, like Elensys, relies on data-management savvy to provide services. Among other things, the company says it can "educate patients about their condition, medications, and life choices," "motivate patients to follow their physicians’ instructions" and "improve patient health outcomes."

Elensys earlier described itself, in a posting on the Web, as "the leader in patient behavior modification programs." 

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