Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council

425 U.S. 748 (1976)
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The Respondents, consumers of prescription drugs and non-profit organizations in Virginia, brought proceedings against the Virginia State Pharmacy Board, alleging that a Virginia statute prohibiting the advertising of prescription drug prices violated the freedom of speech clause of the First Amendment.

Section 54-524.35 of the Virginia statute provided that:

“a pharmacist licensed in Virginia was guilty of unprofessional conduct if he publishe[d], advertise[d] or promote[d], directly or indirectly, in any manner whatsoever, any amount, price, fee, premium, discount, rebate or credit terms . . . for any drugs . . . [dispensable] only by prescription.”

The District Court declared the statute void and enjoined the appellants from enforcing it.

The Court first examined whether the Virginia statute violated the freedom of speech clause of the First Amendment; i.e., did the First Amendment protect the flow of drug price information to users of prescription drugs. The Court held that the flow of prescription drug price information fell within the scope of the clause and that the freedom extended not only to the advertiser, but also to the appellants as recipients of the information. It rejected the Board’s argument that the advertisement of prescription drug prices fell with the “commercial speech” exception to the freedom of speech clause. The Court held that “having a purely economic interest in the content of speech [did not] deprive the speaker or recipient of the protection of the First Amendment.” It explained that, in this instance, suppression of prescription drug information significantly impacted the poor, sick and aged who commonly spent a disproportionate amount of their scarce income on prescription drugs. Considering the striking variance in drug prices, it concluded that “information as to who [was] charging what [was] more than a convenience. It could mean the alleviation of physical pain or the enjoyment of basic necessities.”

The Court also emphasized that the “free flow of commercial of information [was] indispensible” given our “predominantly free enterprise economy” and that, as a matter of public interest, our “private economic decisions” were to be “intelligent and well informed.”

The Court then examined whether the prohibition could be justified on the basis of the State's interest in maintaining the professionalism of its licensed pharmacists. The Court acknowledged that the State had a strong interest in maintaining a high degree of professionalism among licensed pharmacists, but rejected the claim that aggressive price competition resulting from unlimited advertising would “place in jeopardy the pharmacist’s expertise and . . . the customer’s health.” The Board unsuccessfully argued that consumers would be driven toward low-cost, low-quality services thus diminishing respect for the profession. The Court asserted that professional standards were guaranteed by the close regulation of pharmacists in Virginia, noting that a pharmacist who actually endangered a customer would lose her license in any case. The Court emphasized that while the purpose of the statute was to uphold professionalism, it did so by keeping the public in ignorance. It held that if consumers had sufficient access to information regarding drug pricing, they would be aided in their decisions concerning particular drug suppliers.

“Generalizing, society also may have a strong interest in the free flow of commercial information. Even an individual advertisement, though entirely "commercial," may be of general public interest. The facts of decided cases furnish illustrations: advertisements stating that referral services for legal abortions are available, Bigelow v. Virginia, supra; that a manufacturer of artificial furs promotes his product as an alternative to the extinction by his competitors of fur-bearing mammals, see Fur Information & Fashion Council, Inc. v. E. F. Timme & Son, 364 F. Supp. 16 (SDNY 1973); and that a domestic producer advertises his product as an alternative to imports that tend to deprive American residents of their jobs, cf. Chicago Joint Board v. Chicago Tribune Co., 435 F. 2d 470 (CA7 1970), cert. denied, 402 U. S. 973 (1971). Obviously, not all commercial messages contain the same or even a very great public interest element. There are few to which such an element, however, could not be added. Our pharmacist, for example, could cast himself as a commentator on store-to store disparities in drug prices, giving his own and those of a competitor as proof. We see little point in requiring him to do so, and little difference if he does not.” 425 U.S., pp. 664 – 665.

“There is, of course, an alternative to this highly paternalistic approach. That alternative is to assume that this information is not in itself harmful, that people will perceive their own best interests if only they are well enough informed, and that the best means to that end is to open the channels of communication rather than to close them. If they are truly open, nothing prevents the ‘professional’ pharmacist from marketing his own assertedly superior product, and contrasting it with that of the low-cost, high-volume prescription drug retailer. But the choice among these alternative approaches is not ours to make or the Virginia General Assembly's. It is precisely this kind of choice, between the dangers of suppressing information, and the dangers of its misuse if it is freely available, that the First Amendment makes for us. Virginia is free to require whatever professional standards it wishes of its pharmacists; it may subsidize them or protect them from competition in other ways. Cf. Parker v. Brown, 317 U. S. 341 (1943). But it may not do so by keeping the public in ignorance of the entirely lawful terms that competing pharmacists are offering. In this sense, the justifications Virginia has offered for suppressing the flow of prescription drug price information, far from persuading us that the flow is not protected by the First Amendment, have reinforced our view that it is. We so hold.” 425 U.S., p. 770.