Privacy Rights Group Sues Albertsons for Illegally Selling Pharmacy Customers' Information

SAN DIEGO, CA -- September 9, 2004 -- The Privacy Rights Clearinghouse (PRC), a San Diego-based nonprofit consumer information and advocacy organization, today announced that it has filed a lawsuit in California Superior Court charging Albertsons and its affiliated companies, the second largest supermarket chain and fifth largest drugstore retailer in the nation, with violating the privacy rights of thousands of its customers by illegally selling their confidential prescription information to drug companies.

Today's announcement corresponds with the completion of service covering all the pharmaceutical company defendants (initially named as "Doe Defendants") that participated with Albertsons in the drug marketing program and therefore are co-conspirators and "aiders and abettors" under California law.

Among those named are Aventis, Sherring 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 complaint alleges that Albertsons' pharmacy customers receive direct mail and phone solicitations derived from confidential customer medical information provided to the pharmacy solely to fill prescriptions. The solicitations look like they are from the patient's concerned local pharmacist and remind the customer to renew a prescription or consider an alternative medication. But they are actually generated for pharmaceutical company's sales purposes by a specially-designed marketing database, sold by Albertsons. The phone calls customers receive are intended to more urgently communicate the same message. Written authorization from the customer is not first provided as legally required.

"These seemingly innocuous mailings are improper and deceptive solicitations," stated Beth Givens, Director of the Privacy Rights Clearinghouse. "We feel this practice violates the spirit and letter of patient confidentiality. Burying the pharmaceutical company's sponsorship in the small print of a notice that looks like it's being mailed to you by Albertsons is outright deception."

"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 could translate into millions of dollars of income for Albertsons from an unauthorized and unwanted drug marketing scheme which violate medical privacy rights of thousands of Albertsons' customers," stated Givens. "In short, Albertsons disrespects the trust which so many Californians place in their pharmacists to keep their medical information private."

Though Albertsons publicly states that it protects the privacy of customers' confidential medical information and represents that it will not use prescription information except as allowed by the consumer, customers of Albertsons' pharmacies have not given consent to have their information used for targeted marketing. Albertsons' use of that information to increase drug consumption overall, and to benefit the pharmaceutical industry sponsors paying for the marketing campaign, contradicts the company's representations.

Albertsons' pharmacies extract a customer's confidential medical information from prescriptions and then place it in a database that can be retrieved by specific medical characteristics. Albertsons sells this information to pharmaceutical companies in order to pursue carefully crafted marketing campaigns without pharmacy customers' written authorization. Pharmaceutical companies write or approve the content of the solicitations to the pharmacies' customers, which are deceptively processed and mailed by Albertsons marketing personnel on its letterhead. The mailings (and at times phone calls) recommend that customers renew their prescriptions, switch to a successor drug manufactured by the same drug company, or switch to an alternative medication.

"The entire process bypasses the physician and interferes with his care," stated Givens. "Clearly, the primary goal of Albertsons' marketing effort is to boost revenue for the pharmaceutical industry and the grocery chain without appropriate concern about the consequence of disclosing very personal and private medical information or getting the required authorization from the customer."

Jeffrey Krinsk, a lawyer with San Diego-based Finkelstein & Krinsk, the law firm representing the Privacy Rights Clearinghouse, pointed out that "the practices of Albertsons' drug marketing program not only violate state safeguards of medical confidentiality but intrude on consumer privacy while breaking the law." He added, "We will ask the Court to declare these practices illegal and enjoin Albertsons from using this marketing practice. We're also requesting that Albertsons return to its customers the money received for their prescription information. Given Albertsons' multi-state pharmacy operations, this problem is widespread."

The lawsuit alleges that in California and other states these "reminder" communications are: 1) deceptive and false because they conceal the true motive of raising increased revenue for the drug companies and pharmacies involved, and are not just a friendly reminder to refill a prescription; 2) that Albertsons' communications violate California laws that specifically safeguard medical confidentiality absent written authorization from the customer; and 3) that Albertsons' practices ultimately violate state privacy laws by disregarding a citizen's right to just be left alone.

Though recent changes to US Department of Health and Human Services regulations may allow pharmaceutical companies to access patients' personal medical records, California law is far stricter in preserving the confidentiality of patient medical information. Federal regulations establish only minimum standards that are exceeded by laws in many states. Because Albertsons operates in many jurisdictions, privacy advocates are taking a close look at how privacy laws vary from state to state, as well as at the practices of other drug store chains.

Read the complaint in its entirety.

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