First Amendment takes center stage in DTC price fight
A string of court decisions in recent years has handed the pharmaceutical industry wins in an ongoing legal fight over the promotion and marketing of prescription drugs.
That streak could be tested again, as the Trump administration seeks to compel pharmas to reveal list prices in their direct-to-consumer advertising.
The trade group PhRMA has warned that a proposal similar to what Health and Human Services Secretary Alex Azar pitched last week would encroach on their rights under the First Amendment, which can protect some commercial speech from regulation.
While a showdown between government and pharma could bring First Amendment issues freshly to the fore, the administration's proposed rule would be the latest in a line of battles between industry and regulators over the acceptable boundaries for marketing their products.
Legal experts outlined a group of cases that have paved the way to a pharma First Amendment claim in recent decades. These decisions have involved drugmakers' ability to promote their drugs off-label to doctors as well as restrictions on drug advertising.
Willy Jay, a partner at the law firm Goodwin, said courts may find it difficult to dismiss industry arguments that the government would "tread on the First Amendment to essentially extort lower prices from embarrassed companies."
"The government's going to have to show it can't achieve the same result without trampling on people's speech," he concluded in an interview with BioPharma Dive.
For its part, HHS contends it's on firm legal footing in saying that disclosure of prices would be factual and noncontroversial. The department's proposal, for instance, cited Supreme Court rulings that the government is within its means to regulate "purely factual and uncontroversial disclosures about commercial product."
Supporters of the proposal point to precedent from nutrition labels on food, gallon prices on gas and sticker prices on cars. Azar highlighted a comparable uproar from the automotive industry 60-plus years ago over sticker price requirements.
"Manufacturers protested that these prices weren't meaningful, so mandating their disclosure wouldn't help consumers," the former Eli Lilly executive said. "Doesn't that sound familiar?"
Controversial to who?
But industry lawyers have a different take on whether mandating price disclosure is as uncontroversial as all that.
"It's really going to be: 'Is that a factual and uncontroversial statement?,' which is what the standard has been for those kind of compelled disclosures. I don't see how anybody could say it is," said Jeffrey Chasnow, an associate general counsel and senior vice president for Pfizer, at an Oct. 17 panel discussion.
Within pharma's world, some of the Supreme Court's past decisions helped guide legal strategies, Jay noted. A 2011 Supreme Court decision penned by Justice Anthony Kennedy that struck down a state law regulating the exchange of prescriber-identifiable information was particularly influential.
"He might as well have said, 'Dear pharmaceutical criminal defense lawyers, please use this in all future off-label marketing promotions,'" Jay said.
On that case Justice Stephen Breyer dissented, warning "the court opens a Pandora's box of First Amendment challenges to many ordinary regulatory practices."
By installing Justices Neil Gorsuch and Brett Kavanaugh, the Trump administration has pushed the court in a conservative direction, although it remains to be seen if that will have an impact directly on pharma.
"The more conservative-leaning Supreme Court would more aggressively limit the FDA if they try to act more in these areas where the First Amendment is a concern," Chad Landmon, a partner at Axinn, Veltrop and Harkrider said in an interview with BioPharma Dive.
This fits into a broader legal trend that Justice Elena Kagan dubbed earlier this year the "weaponizing the First Amendment," whereby "the majority has chosen the winners by turning the First Amendment into a sword, and using it against workaday economic and regulatory policy."
That's a view that David Kessler, the FDA commissioner from 1990 to 1997, recently warned is happening to his former agency.
"It is being used as a weapon against the agency," he said at a conference on Oct. 19.
CMS — not FDA — at the steering wheel
Notably, though, the Trump administration proposal was sponsored by the Centers for Medicare and Medicaid Services, citing statutory authority stemming from the Social Security Act.
While the FDA has been given authority by Congress to regulate communication around the safety and efficacy of drugs, observers believe the administration sees CMS as having a stronger case around price disclosures.
The FDA, meanwhile, has been rethinking its approach to policing drugmaker promotion and marketing, after coming in on the losing side of those Supreme Court and other federal cases.
"I think FDA really faces a very, very important inflection point, and it is not at all prepared for the future of administrative law and First Amendment law," said Daniel Troy, former general counsel to GlaxoSmithKline and former FDA chief counsel, speaking at a conference on Oct. 19.
Legal precedent affecting the balance between drugmakers and government
|Case||Decision date||Deciding court||Importance|
|Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc.||1976||Supreme Court, 7-1||Free speech protections apply in commercial speech as they would with noncommercial speech|
|Central Hudson Gas & Electric Corp. v. Public Service Commission||1980||Supreme Court, 8-1||Established a four-step analysis for commercial speech, considering if a regulation is narrowly tailored and directly advancing a substantial government interest|
|Washington Legal Foundation v. Henney||2000||D.C. District Court||FDA violated First Amendment by penalizing drugmakers for sending scientific literature to physicians on off-label use|
|Thompson v. Western States Medical Center||2002||Supreme Court, 5-4||Struck down a drug advertising restriction over compounding drugs as a First Amendment violation|
|Sorrell v. IMS Health||2011||Supreme Court, 6-3||Deemed a Vermont state law unconstitutional on free speech grounds for banning the sale or use of prescriber-identifiable data|
|U.S. v. Caronia||2012||U.S. Court of Appeals, 2nd circuit||Vacated a criminal conviction of a sales representative that promoted off-label use, ruling it neither untruthful or misleading|
|Amarin v. FDA||2015||U.S. District Court for the Southern District of New York||Further eroded FDA off-label promotion regulation on First Amendment grounds|
One signal of that concern, some say, is the dramatic decline in the FDA's written warnings to pharma companies for mislabeling or illegal promotion of drugs. The office has issued six letters in 2018 as of Oct. 22, compared to a relative peak of 51 in 2010.
FDA Center for Drug Evaluation and Research Director Janet Woodcock acknowledged recently that the FDA is "walking very carefully" with its use of warning letters from the Office of Prescription Drug Promotion due to legal concerns.
"Each one of those cases or letters is a joint effort between the Office of Chief Counsel and OPDP because of the First Amendment implications of all of this," Woodcock said. "We're looking at these things carefully, but we really have to recognize the current jurisprudence."
Julie Tibbets, a partner at Goodwin, also noted in an interview with BioPharma Dive the decline in warning letters could lead marketing and legal teams to adjust their risk tolerance on future campaigns.
An FDA spokesperson contended the First Amendment won't prevent it from policing drugmakers that step over the line with their marketing.
"The First Amendment plays an important role in protecting the exchange of truthful and non-misleading information, which is crucial to scientific innovation and informed decision-making," the FDA spokesperson wrote.
"However, the First Amendment does not protect the dissemination of false or misleading information, and it does not prevent the FDA taking action against manufacturers whose communications result in violations of FDA authorities."
Scott Lassman, a Goodwin partner, explained in an email to BioPharma Dive that FDA has ratcheted enforcement activities back in an effort to avoid "a devastating loss" that would "further erode its authority."
At the same time, PhRMA is weighing its options. For now, the CMS proposal is open to a 60-day comment period, and surely a period of fierce industry lobbying is underway.
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