For Professionals: Prescription Drugs

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Lawsuit Moves Forward Against Albertsons for Allegedly Illegally Selling Customers’ Information

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Published: June 16, 2008

An ongoing lawsuit against Albertsons pharmacy division (Sav-On Drugs, Jewel Osco) and its affiliated companies just received the court’s ruling to move forward with all allegations intact. Filed by the Privacy Rights Clearinghouse, a San Diego-based nonprofit consumer information and advocacy organization, this lawsuit charges Albertsons pharmacy with violating the California privacy rights of thousands of its customers by illegally selling their confidential prescription information to pharmaceutical companies.

Among the pharmaceutical companies that have participated in Albertsons’ drug marketing program are: Aventis, Schering Plough, AstraZeneca, TAP Pharmaceutical Products, Eli Lilly, Novartis, Wyeth, Proctor & Gamble, Teva Pharmaceutical, GlaxoSmithKline, Merck, Allergan, Bristol-Meyers Squibb, Pfizer, Galderma, and Otsuka America Pharmaceuticals.

The lawsuit alleges that Albertsons' pharmacy customers receive direct mail and phone solicitations derived from confidential customer medical information provided to an Albertsons pharmacy solely to fill a patient’s prescription. The solicitations are designed to look like they are from the patient's concerned local pharmacist and remind the customer to renew a prescription, switch to a successor drug manufactured by the drug company sponsoring the communication or consider an alternative medication. But these messages are actually prepared and/or approved by pharmaceutical companies looking to increase drug sales.

These pharmaceutical companies buy access to Albertson’s specially designed database that extracts stored customer confidential medical information from prescriptions and organizes this data so it can be retrieved according to medical characteristics needed by the pharmaceutical company. According to the lawsuit, this extraction and selling of private information is done without the legally required written authorization from the pharmacy customers, despite Albertsons’ public statements to California consumers of protecting the privacy of customers’ confidential medical information. The pharmaceutical companies first dictate or approve the content of written solicitations for Albertsons marketing personnel to process and mail to pharmacy customers. This is done on Albertsons’ own letterhead, and these seemingly friendly reminders from one’s local pharmacist are actually a carefully crafted marketing campaign that can be highly profitable both for Albertsons and the pharmaceutical companies paying Albertsons for these activities.

Indeed, Albertsons receives between $3.00 and $4.50 per inquiry letter and between $12 to $15 per phone inquiry from the pharmaceutical companies. This can translate into millions of dollars of income for Albertsons and lucrative drug sales for pharmaceutical companies.

Yet, Albertsons and the many companies participating in this marketing campaign have argued that the sole motivation of this campaign is their desire to enhance the customers’ health. Despite this argument, however, a recent court ruling has allowed the lawsuit to proceed with all allegations. Also, many aspects of the companies’ marketing campaign demonstrate that their stated motivation may be camouflaging the bigger motivation to increase sales of certain pharmaceutical drugs. For example, generic drugs have never been the subject of one of the solicitation/reminder notices. These reminder notices have all been for more expensive brand-name drugs. Also, pharmacy customers on Medicaid (Medi-Cal in California) have been excluded from receiving these mailings – the primary reasons being they most-likely cannot afford the brand-name drugs and many are not on Medicaid’s formulary.

Finkelstein & Krinsk, the San Diego law firm representing the Privacy Rights Clearinghouse, has asked the Court to declare these marketing practices illegal and enjoin Albertsons from using this marketing practice. They’ve also requested that Albertsons return to its customers the money received for prescription information they believe belongs to the consumer.

Albertsons and its affiliated companies say they have stopped these marketing practices in California since the lawsuit was filed, as California law is far stricter in preserving the confidentiality of patient medical information than most every other state. California is the only state in the country that has constitutional, statutory and common law guarantees of privacy protection. (See the California Confidentiality of Medical Information Act). Federal regulations, in contrast, establish only minimum standards and in some cases allow pharmaceutical companies to access patients’ personal medical records on a basis more lenient than California law allows.

What to do if you’ve received such solicitations

Anyone who continues to receive such solicitations, or who has received such a solicitation in the past, can report their case to Finkelstein & Krinsk. They are collecting information from all those affected by this practice and will notify these people of their rights once the case is settled.

Contact Finkelstein & Krinsk at: fk@classactionlaw.com or 619-238-1333.

Also, if people using a pharmacy besides Albertsons or one of its affiliates (Jewel, Sav-On Drugs, Osco Drugs and Jewel-Osco) receive a letter or phone call from their pharmacy or from a drug company advising them to switch to a certain brand, it is likely that their pharmacy has entered into a marketing program similar to Albertsons’ drug marketing program. These people can also contact Finkelstein & Krinsk to report their case and should save their letter, or if they received a phone call, note the date, time of day, and any other details about the phone call.

As a general rule, people can:

  • Ask their pharmacy if they sell or share their personal information with any other companies before deciding to do business with them.
      • If they say “yes,” people can either find another pharmacy to serve their needs, or
      • tell their current pharmacy in writing to not sell, share or use any personal information with other companies, or with their affiliates or business partners.
  • Ask for written confirmation from their pharmacy that they indeed will not sell, share, use or give their personal information to/with others.
  • Read the privacy notice, often called an HIPAA notice, of any pharmacy that they use. Pharmacies are required to provide this upon request.

The complaint is posted on the Privacy Rights Clearinghouse website. The website also contains:

  • A letter consumers can tailor to send to their pharmacy to ensure that their prescription information will not be used for marketing purposes, and
  • Sample solicitation letters sent to Albertsons pharmacy customers.

Additional resources on medical records privacy

The Privacy Rights Clearinghouse website offers two guides on the subject of medical records privacy:

The Health Privacy Project has summarized information on the medical privacy laws in each state. See information on California.

This article was edited in part from a PRC press release.

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