PharmExec Blog

Supreme Court Strikes down Vermont Law, Upholds Rep Free Speech

June 23rd was a good day for the pharmaceutical industry. The Supreme Court released two decisions that largely went pharma’s way. There was much rejoicing across the industry, and for good reason, business as usual won out.

In PLIVA v. Mensing, the Court ruled that generic drug companies should comply with federal regulations instead of conflicting state regulations when it comes to updating warning labels. Federal law prohibits generic companies from updating the warning labels, while some states require generic companies to include updated safety information. For pharmaceutical sales representatives, though, all eyes were riveted on the Sorrell v. IMS Health case, which pitted rep free speech vs. physician privacy.

In a 6 to 3 decision, the Court roundly came down on the side of pharmaceutical marketing as predicted during a recent Pharma Faceoff debate on the topic. “The State may not burden the speech of others in order to tilt public debate in a preferred direction,” Justice Anthony Kennedy argued in writing for the majority. “The capacity of technology to find and publish personal information, including records required by the government, presents serious and unresolved issues with respect to personal privacy and the dignity it seeks to secure. In considering how to protect those interests, however, the State cannot engage in content-based discrimination to advance its own side of a debate.”

In essence, the Court dismissed the privacy concerns, and utilizing ample evidence from the Vermont legislature, insisted that the real goal was to decrease the effectiveness of branded pharma sales efforts and increase generic utilization. Kennedy insisted that the case really was about free speech and just because the state of Vermont does not like the marketing practices of pharma doesn’t mean it can place an additional burden on it. The state should instead enter the “marketplace of ideas” and offer its own perspective on equal footing.

The case could be considered something of a landslide. Typically the court breaks down 5 to 4 along ideological lines, but in this case Justice Sotomayor, joined her more conservative colleagues, Alito, Scalia, Thomas and Roberts.

Not surprisingly, PhRMA and the data mining companies crowed over the decision. PhRMA claimed it was “not only a victory for free speech, but also a triumph for patients and future research and development by biopharmaceutical companies. SDI predicted that “existing laws in Maine and New Hampshire also will likely be declared unconstitutional or repealed in light of this Supreme Court decision.”

In dissenting, though, Justice Breyer raised some interesting challenges. Arguing that the state was not counter-detailing as implied in the decision, Breyer worried that the Court was opening up all state and federal regulation that impinges upon speech. “At best the Court opens a Pandora’s Box of First Amendment challenges to many ordinary regulatory practices that may only incidentally affect a commercial message,” he argued. “At worst, it re-awakens… pre-New Deal threat of substituting judicial for democratic decision making where ordinary economic regulation is at issue.”

Since the law’s passage, Vermont has created the nation’s most significant effort to create a universal health program, which only increases the state’s interest in drug marketing and healthcare costs and raising the stakes for the next showdown.

So, the question for pharma is more basic: Will there be a backlash as Frank Pasquale predicted in Pharma Faceoff? Will states like Vermont take a different approach that restricts pharmaceutical marketing in a way that is less likely to draw the ire of the court?

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