Thompson, Health & Human Services Secy. v. Western States Medical Center (04/29/2002)

Questions presented: Is the prohibition in the 1997 Food and Drug Administration Modernization Act against drug providers promoting or advertising particular compounded drugs in return for their exemption from the FDA's standard drug approval requirements a violation of 1st Amendment free speech rights in that it fails to directly advance a sufficiently substantial government interest?

BY KATHRYN EGGERT, MEDILL NEWS SERVICE

Pharmacists who mix up compounds have an axe to grind with the Federal government, which, they feel, has restricted free speech in the name of a regulatory quid pro quo.

In 1997, the Federal and Drug Administration Modernization Act set forth new guidelines for pharmacists advertising compound mixing services. The Act prohibited the licensed drug providers from promoting or advertising particular compounded drugs, in exchange for an exemption from the standard drug approval requirements imposed by the Food and Drug Administration (FDA).

The law went into effect a year after it was created.

A group of pharmacists from every corner of the nation Nevada, Wisconsin,Tennessee, Colorado and New Jersey filed suit in Nevada, attempting to enjoin enforcement of the provisions in the Act that specifically restrict advertising of prescription compounds.

The claim was that the provisions which allow a pharmacy to compound drugs only if the pharmacy "does not advertise or promote the compounding of any particular drug, class of drug, or type of drug," is an abridgment of speech protected by the 1st Amendment.

"Compounding" is a process by which a pharmacist mixes ingredients to create a medication for an individual patient. It is typically used to prepare medications that are not commercially available, such as a medication for a patient who is allergic to an ingredient in a mass-produced product. Pharmacists can provide compounded drugs to individual patients only upon receipt of a valid prescription.

Attorneys for the federal government responded that because compounded drugs fall under the definition of a "new drug" and cannot be legally introduced or delivered into interstate commerce without the approval of an application for such drug unless the compounded drug is exempted from the approval process under the Act, it is constitutional for the federal government to control or ban the advertisement of the particular compounded drug. The government did not argue that advertising a particular compounded drug or compounded drugs generally is inherently misleading.

In December 1998, the Federal District Court in Nevada sided with the pharmacists, enjoining the FDA from enforcing the speech-related restrictions because they did not meet the test for acceptable government regulation of commercial speech set forth in the 1980 Supreme Court decision in Central Hudson Gas & Electric Corp. v. Public Service Commission.

The government appealed to the 9th Circuit Court of Appeals, which, on Feb. 6, 2001, unanimously sided with the pharmacists, and went further than the district court in striking down the Act in its entirety.

In agreement with the district court, the appeals court concluded that the government had failed to meet the Central Hudson tests in two respects. It had failed to show it balanced the need to preserve drug compounding for individual patients with particularized needs while preventing the widespread distribution of compounded drugs.

"There is insufficient evidence in the record to conclude that the government has a substantial interest in preventing widespread compounding," wrote Judge Cynthia Holcomb Hall. "The government asserts that increased distribution of compounded drugs is dangerous because of the health risks associated with large numbers of patients taking such drugs. The government neither explains nor supports this contention. In fact, most of the evidence runs to the contrary. Compounding is not only legal under state law, but most states require their pharmacists to know how to compound."

The appeals court also found the Acts speech restrictions unconstitutional because the government had not shown that lower demand for compounded drugs would protect the public or that workable alternatives to the speech restrictions failed to exist.

In going even further than the district court, the appeals panel unanimously struck down the Act itself. "We believe that Congress would not have passed FDAMA absent the restrictions on commercial speech," Hall wrote.

"No matter what [the governments] concerns are [regarding advertising compounded prescriptions] they cant get to them by stifling free speech," said Michael A. Reiter, an attorney for several independent compounding pharmacists from the Western States.

Reiter added that over the last 25 years, the Supreme Court has taken a number of cases regarding whether truthful speech can be outlawed or prohibited. The Court is generally against restrictions, he said.

In the governments petition to convince the U.S. Supreme Court to review the case, the U.S. Solicitor General argued that the Acts speech limitations were intended the prevent manufacturing from occurring under the guise of compounding. "It would strike at the core of the drug approval requirements, and thus at the core of the FDCA itself," the petition argued. "If drug producers could mass produce drugs through a pharmacy engaged in widespread compounding, and thus bypass the approval process, manufacturers would have far less incentive to bear the cost of establishing that the drugs they seek to market are in fact safe and effective."

In conclusion, the government urged the Court to review the case because the appeals courts decision upsets the careful balance that Congress struck ... in specifying the point at which drug products should be subject to the FDCA's generally applicable new drug approval requirements. Those requirements are the linchpin of the Nation's laws regulating the manufacturing and distribution of drugs, and thus a central component of Congress's efforts in the FDCA to protect the public health and safety."

On Oct. 29, 2001, the Court granted certiorari in the case, and on April 29, 2002, the Court affirmed by a 5-4 vote, holding that the act's prohibitions on soliciting prescriptions for, and advertising, compounded drugs amount to unconstitutional restrictions on commercial speech.

Justice Sandra Day O'Connor wrote for the majority that if the "1st Amendment means anything, it means that regulating speech must be a last -- not first -- resort. Yet here it seems to have been the first strategy the government thought to try."

Joining in the majority opinion were Justices Antonin Scalia, Anthony Kennedy, David Souter, and Clarence Thomas.

Justice Stephen Breyer wrote a dissent for himself, Chief Justice William Rehnquist, and Justices John Paul Stevens and Ruth Bader Ginsburg.