From the New England Journal of Medicine:
Vermont’s statute had a fatal self-inflicted wound. By prominently announcing that the state intended to tip the balance in the “marketplace for ideas” against drug companies, the law dug itself into a constitutional hole: state interference with that marketplace was likely to provoke the ire of a majority of the Supreme Court. Writing for the Court, Justice Anthony Kennedy stated, “[t]he more benign and, many would say, beneficial speech of pharmaceutical marketing is also entitled to the protection of the First Amendment.”
Instead of dealing with this statute under existing precedent, Kennedy seized the opportunity to expand the First Amendment’s reach and power to strike down government regulation of health care information. The Court’s opinion raises serious questions for some public health rules and the regulation of drug marketing. Justice Stephen Breyer, writing in dissent, charged that the Court added an unprecedented constitutional standard that would hinder consumer-protection regulations, including Food and Drug Administration (FDA) restrictions against off-label marketing.
Although the First Amendment’s core is the protection of religious freedom and political speech, in recent decades, federal courts have expanded its application to business-related or “commercial” speech. In the 1970s, the Court used the commercial speech doctrine to reach state laws prohibiting advertising by professionals such as lawyers, accountants, pharmacists, and physicians. These professions had been self-regulating, following ethical rules that limited market competition. The Supreme Court struck down the prohibitions, using a standard of review that reserved some deference to the state legislature. By 1980, this “intermediate-scrutiny” standard was encapsulated in the Central Hudson decision, and until now, the Central Hudson test — whereby it’s considered constitutional to regulate commercial speech only if doing so “directly advances” a “substantial” government interest in a way that “is not more extensive than is necessary” — has been the operative standard.
Kennedy applied a more stringent “heightened-scrutiny” standard to the Vermont law, seeing the additional burden as justified because the law regulated specific conduct (drug marketing) and specific persons (data miners and drug companies). Under this standard, the Court didn’t carefully weigh the health care cost savings described by Vermont and gave short shrift to physicians’ confidentiality in patient-related decision making, claiming that prescriber-identifiable information was widely available in the marketplace. The majority dismissed Vermont’s concerns about data mining as “nothing more than a difference of opinion,” without considering seriously the peer-reviewed evidence on marketing’s effect on prescribing choices. Indeed, experts’ testimony to the Vermont legislature was offered as evidence of the state’s bias.