Free Speech Protects Drug Companies, Too

Popular or not, the Supreme Court decided big drug companies are also protected by the Constitution. Check out these two articles from the New York Times, one describing the decision and another taking an opinion on it.

The Supreme Court on Thursday handed drug companies two significant victories, one limiting suits from people injured by generic drugs and the other striking down a law that banned some commercial uses of prescription data.

Bridget C. Asay of Vermont said a law on prescription data was meant to prevent “invasive marketing.” The state lost the case.

In the first case, Pliva v. Mensing, No. 09-993, the court split 5 to 4 along ideological lines in ruling that the makers of generic drugs — which account for 75 percent of prescriptions dispensed nationwide — may not be sued under state law for failing to warn customers about the risks associated with their products.

Two years ago, in Wyeth v. Levine, the court decided the same question in the context of brand-name drugs but came to the opposite conclusion. That decision was based in large part on the fact that such drug companies can sometimes change the labels on their products without permission from the Food and Drug Administration.

Justice Clarence Thomas, writing for the majority on Thursday, acknowledged that in the eyes of injured consumers, the new distinction between generic and brand-name drugs “makes little sense.” But he said it followed from the way the two kinds of companies are treated under federal law.

The manufacturers of generic drugs, he said, must use the same warning labels as the corresponding brand-name drugs, and they may not unilaterally alter those labels. That means, Justice Thomas wrote, that makers of generic drugs are caught in an impossible bind: they can comply with a state law requiring them to change their labels or the federal law prohibiting changes, but not both.

(Full text)

Drug Marketing and Free Speech (Editorial)

Pharmaceutical companies, which spend billions of dollars a year promoting their products to doctors, have found that it is very useful to know what drugs a doctor has prescribed in the past. Many use data collected from prescriptions processed by pharmacies — a doctor’s name, the drugs and the dosage — to refine their marketing practices and increase sales.

The Supreme Court on Thursday made it harder for states to protect medical privacy with laws that regulate such practices. In 2007, Vermont passed a law that forbade the sale of such records by pharmacies and their use for marketing purposes. The ruling upheld a lower court decision that struck down the law as unconstitutional.

Justice Anthony Kennedy, writing for the 6-to-3 majority, said the law violates First Amendment rights by imposing a “burden on protected expression” on specific speakers (drug marketers) and specific speech (information about the doctors and what they prescribed). It is unconstitutional because it restricts the transfer of that information and what the marketers have to say.

In dissent, Justice Stephen Breyer explains that the law’s only restriction is on access to data “that could help pharmaceutical companies create better sales messages.” He notes that any speech-related effects are “indirect, incidental, and entirely commercial.” By applying strict First Amendment scrutiny to this ordinary economic regulation, he warns, the court threatens to substitute “judicial for democratic decision-making.”

The law would have been upheld, Justice Breyer says, if the court had treated it as a restriction on commercial speech, which is less robustly protected than political speech. The court’s majority unwisely narrows the gap between commercial and political speech, and makes it harder to protect consumers.

(Full text)

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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