New commercial speech case -- note the lineup

[Volokh, Eugene]

> -----Original Message-----
> From: 0Peter Martin [SMTP:martin at lii.law.cornell.edu]
> Sent: Monday, April 29, 2002 8:01 AM
> To:   0LIIBULLETIN
> Subject:      [liibulletin] LIIBULLETIN, Monday April 29  (2 cases)
>
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> ===============================================================
> THOMPSON V. WESTERN STATES MEDICAL CENTER (01-344)
> Web-accessible at:
>     http://supct.law.cornell.edu/supct/html/01-344.ZS.html
>
> Argued February 26, 2002  -- Decided April 29, 2002
> Opinion author: O'Connor
>
> ===============================================================
>
> Drug compounding is a process by which a pharmacist or doctor
> combines, mixes, or alters ingredients to create a medication
> tailored to an individual patient's needs.  The Food and Drug
> Administration Modernization Act of 1997 (FDAMA) exempts
> "compounded drugs" from the Food and Drug Administration's
> (FDA) standard drug approval requirements under the Federal
> Food, Drug, and Cosmetic Act (FDCA), so long as the providers
> of the compounded drugs abide by several restrictions,
> including that the prescription be "unsolicited," 21 U.S.C.
> sect. 353a(a), and that the providers "not advertise or promote
> the compounding of any particular drug, class of drug, or type
> of drug," sect. 353a(c).  Respondents, a group of licensed
> pharmacies that specialize in compounding drugs, sought to
> enjoin enforcement of the advertising and solicitation
> provisions, arguing that they violate the First Amendment's
> free speech guarantee. The District Court agreed and granted
> respondents summary judgment, holding that the provisions
> constitute unconstitutional restrictions on commercial speech
> under Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n
> of N. Y., 447 U.S. 557, 566.  Affirming in relevant part, the
> Ninth Circuit held that the restrictions in question fail
> Central Hudson's test because the Government had not
> demonstrated that the restrictions would directly advance its
> interests or that alternatives less restrictive of speech were
> unavailable.
>
> Held: The FDAMA's prohibitions on soliciting prescriptions for,
> and advertising, compounded drugs amount to unconstitutional
> restrictions on commercial speech.  Pp. 8-19.
>     (a) For a commercial speech regulation to be
> constitutionally permissible under the Central Hudson test, the
> speech in question must concern lawful activity and not be
> misleading, the asserted governmental interest to be served by
> the regulation must be substantial, and the regulation must
> "directly advanc[e]" the governmental interest and "not [be]
> more extensive than is necessary to serve that interest," 447
> U.S., at 566.  Pp. 8-9.
>     (b) The Government asserts that three substantial
> interests underlie the FDAMA: (1) preserving the effectiveness
> and integrity of the FDCA's new drug approval process and the
> protection of the public health it provides; (2) preserving the
> availability of compounded drugs for patients who, for
> particularized medical reasons, cannot use commercially
> available products approved by the FDA; and (3) achieving the
> proper balance between those two competing interests.
> Preserving the new drug approval process is clearly an
> important governmental interest, as is permitting the
> continuation of the practice of compounding so that patients
> with particular needs may obtain medications suited to those
> needs. Because pharmacists do not make enough money from
> small-scale compounding to make safety and efficacy testing of
> their compounded drugs economically feasible, however, it would
> not make sense to require compounded drugs created to meet the
> unique needs of individual patients to undergo the entire new
> drug approval process. The Government therefore needs to be
> able to draw a line between small-scale compounding and
> large-scale drug manufacturing.  The Government argues that the
> FDAMA's speech-related provisions provide just such a line: As
> long as pharmacists do not advertise particular compounded
> drugs, they may sell compounded drugs without first undergoing
> safety and efficacy testing and obtaining FDA approval.
> However, even assuming that the FDAMA's prohibition on
> advertising compounded drugs "directly advance[s]" the
> Government's asserted interests, the Government has failed to
> demonstrate that the speech restrictions are "not more
> extensive than is necessary to serve [those] interest[s]."
> Central Hudson, supra, at 566. If the Government can achieve
> its interests in a manner that does not restrict commercial
> speech, or that restricts less speech, the Government must do
> so.  E.g., Rubin v. Coors Brewing Co., 514 U.S. 476, 490-491.
> Several non-speech-related means of drawing a line between
> compounding and large-scale manufacturing might be possible
> here.  For example, the Government could ban the use of
> commercial scale manufacturing or testing equipment in
> compounding drug products, prohibit pharmacists from
> compounding more drugs in anticipation of receiving
> prescriptions than in response to prescriptions already
> received, or prohibit them from offering compounded drugs at
> wholesale to other state licensed persons or commercial
> entities for resale.  The Government has not offered any reason
> why such possibilities, alone or in combination, would be
> insufficient to prevent compounding from occurring on such a
> scale as to undermine the new drug approval process.  Pp.
> 10-15.
>     (c) Even if the Government had argued (as does the
> dissent) that the FDAMA's speech-related restrictions were
> motivated by a fear that advertising compounded drugs would put
> people who do not need such drugs at risk by causing them to
> convince their doctors to prescribe the drugs anyway, that fear
> would fail to justify the restrictions.  This concern rests on
> the questionable assumption that doctors would prescribe
> unnecessary medications and amounts to a fear that people would
> make bad decisions if given truthful information, a notion that
> the Court rejected as a justification for an advertising ban
> in, e.g., Virginia Bd. of Pharmacy v. Virginia Citizens
> Consumer Council, Inc., 425 U.S. 748, 770.  Pp. 15-18.
>     (d) If the Government's failure to justify its decision
> to regulate speech were not enough to convince the Court that
> the FDAMA's advertising provisions were unconstitutional, the
> amount of beneficial speech prohibited by the FDAMA would be.
> Forbidding the advertisement of compounded drugs would prevent
> pharmacists with no interest in mass-producing medications, but
> who serve clienteles with special medical needs, from telling
> the doctors treating those clients about the alternative drugs
> available through compounding. For example, a pharmacist
> serving a children's hospital where many patients are unable to
> swallow pills would be prevented from telling the children's
> doctors about a new development in compounding that allowed a
> drug that was previously available only in pill form to be
> administered another way.  The fact that the FDAMA would
> prohibit such seemingly useful speech even though doing so does
> not appear to directly further any asserted governmental
> objective confirms that the prohibition is unconstitutional.
> Pp. 18-19.
>
> 238 F.3d 1090, affirmed.
>
> O'Connor, J., delivered the opinion of the Court, in which
> Scalia, Kennedy, Souter, and Thomas, JJ., joined.  Thomas, J.,
> filed a concurring opinion.  Breyer, J., filed a dissenting
> opinion, in which Rehnquist, C. J., and Stevens and Ginsburg,
> JJ., joined.
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