Commercial-speech interest prevails in drug-ads case

Tuesday, April 30, 2002

The Supreme Court reinforced its strong First Amendment protection for commercial speech yesterday in a 5-4 ruling that struck down a federal law regulating a category of drug advertising.

The ruling in Thompson v. Western States Medical Center said it was improper for Congress and the Food and Drug Administration to bar the advertising of “compounded” drugs — pharmaceuticals that are legally altered by druggists to meet the needs of individual patients. Pharmacists add flavorings to make them more palatable to children, for example, or adjust dosages to suit patients of different sizes and ages.

The advertising restrictions, challenged by several pharmacies in the case before the court, were aimed at keeping pharmacists from developing a national market for these compounds, which do not go through the normal approval process for new drugs. The manufacture of large, commercial amounts of these unconventional products, the government said, could endanger public health.

But the Supreme Court, in a sharply worded opinion by Justice Sandra Day O’Connor, said Congress should have tried other ways of achieving its goals before barring advertising.

“If the First Amendment means anything, it means that regulating speech must be a last — not first — resort,” wrote O’Connor. “Yet here it seems to have been the first strategy the Government thought to try.”

She said the government could, for example, restrict large-scale manufacturing of compounds, or limit the number of prescriptions for compounds issued by pharmacists for patients outside their own state. O’Connor also questioned the government’s seeming assumption that it would be impossible for pharmacists to sell their products nationally without advertising.

Using language that will cheer commercial-speech advocates, O’Connor added, “The First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good.” Elsewhere, in reviewing the history of the court’s commercial-speech decisions, O’Connor also observed that the court has recognized that “a particular consumer’s interest in the free flow of commercial information may be as keen, if not keener by far, than his interest in the day’s most urgent political debate.”

The court majority, as it has before, passed up the opportunity to revise or abandon its traditional Central Hudson test for evaluating restrictions of commercial speech. Under that test, first articulated in the 1980 ruling Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, restrictions on the non-misleading advertising of legal products are permitted only if the restrictions directly and narrowly advance a substantial government interest.

O’Connor noted that several justices have voiced doubts about the Central Hudson test, but she said, “there is no need in this case to break new ground.”

Dissenting from the opinion were Justices Stephen Breyer, John Paul Stevens, Ruth Bader Ginsburg and Chief Justice William Rehnquist. Rehnquist does not often vote on the side of federal regulation of business, but in this case he did. Rehnquist has generally supported commercial-speech rights, but has said in several cases that advertising restrictions are acceptable in industries that are or can be substantially regulated in other ways.

“I believe that the Court seriously undervalues the importance of the Government's interest in protecting the health and safety of the American public,” wrote Breyer in the dissent. “An overly rigid commercial speech doctrine will transform what ought to be a legislative or regulatory decision about the best way to protect the health and safety of the American public into a constitutional decision prohibiting the legislature from enacting necessary protections. As history in respect to the Due Process Clause shows, any such transformation would involve a tragic constitutional misunderstanding.”

Tony Mauro covers the Supreme Court for American Lawyer Media and is a legal correspondent for the First Amendment Center.

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