Drugs, Data and Money

By now, if you have been following my blog, you know that data, particularly personal data, is the Fort Knox of the technological age. If I were a greedy entrepreneur, I would much rather have a database containing several million names with private information, than a row of hotels on Boardwalk. CNN confirms this in their recent article, “Your identity…for sale,” by Jeanne Sahadi.

She covers the regular data breaches by the big companies, banks and data brokers, but her heading, Retailers and manufacturers, is what caught my attention. Under this she says: “From Mom-and-Pop shops to nationwide drug stores and supermarkets to the manufacturer of your coffeemaker, there’s information companies collect on you and may sell to information brokers.” Forget “may.” I can confirm that they do.

Rumors of the sale of consumers’ medical info have been floated for the last few years but Privacy Rights Clearinghouse made it official in 2004, by filing a lawsuit against Albertsons supermarket chain and their drug subsidiaries, OSCO and SAV-ON. PRC makes the claim that, “Albertsons secretly enters into commercial arrangements with pharmaceutical companies willing to pay to participate in Albertsons’ Drug Marketing Program, which is based on the information taken from customer prescriptions.”

And, get this folks, according to PRC: “Albertsons is paid at least $3.00 - $4.50 per letter it sends and between $12-15 for each phone inquiry.” At its best, this is thirty times better than the average 15 cents per name made by the junk mail industry.

According to Food Marketing Institute, the average supermarket has approximately 14,000 customers each week, 700,000 a year. If only one-third of them buy their medication there, that’s a potential annual sale of medical data, per store, of $699,300. Albertsons has 2,300 stores, but let’s say only half have drug departments. The grand total each mailing is over $800 million. And this doesn’t even include the payments for those phone inquiries.

I did a BLOG Bulletin recently on why Albertsons/OSCO wants your personal data. In this particular instance, their check-out clerks were asking for personal information to cash checks and actually in-putting it to their database from the cash register. I raised hell—as probably did many other customers—and they stopped it soon after that incident. Who knows how many driver’s license numbers and telephone numbers—all that’s necessary, along with name and address, to initiate ID theft—they collected before they canceled the policy.

The reason all this is so hush-hush is due to the enormous lobbying efforts of the pharmaceutical industry. The Center for Public Integrity published an article on their Web site recently, “Drug Lobby Second to None,” by Asif Ismail. He starts by revealing that, according to the Center, drug lobbyists spent over “…$800 million in federal lobbying and campaign donations at the federal and state levels in the past seven years…” He goes on to point out how even the direction of the FDA has become more “industry-friendly.”

Although somewhat dated (2001), Andrew Brandt’s Privacy Watch article, “A handful of insurance and medical industry companies want to sell your personal data, but you can stop them,” in PC World, was a forecast of things to come. He singles out insurance companies and the medical industry, both of which, he states, want to get in the business of selling your name and personal data. At the time, the Bush administration was trying to delay the stringent new privacy rules in the Health Insurance Portability and Accountability Act (HIPAA).

If you’ve been to the doctor’s office recently, you know that at least we have the HIPAA on our side now. More on this whole issue in a future post.