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U.S. Supreme Court Says FDAMA Ban On Compounded Drug Advertising Is Unconstitutional


HLD, v. 30, n. 7 (July 2002)

Opinions Issued

U.S. Supreme Court Says FDAMA Ban On Compounded Drug Advertising Is Unconstitutional

Under the Food and Drug Administration Modernization Act of 1997 (FDAMA), "compounded drugs" are exempted from Food and Drug Administration (FDA) drug approval requirements as long as providers refrain from advertising or promoting the compounded drug. See 21 U.S.C. � 353a(c). A group of licensed pharmacies that specialize in drug compounding, a process used to tailor medication to a particular patient's needs, challenged the advertising restrictions in federal district court, arguing they violated First Amendment free speech. The district court granted the pharmacists summary judgment motion, holding the restrictions amounted to impermissible government regulation of commercial speech under Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557. The Ninth Circuit affirmed the lower court's grant of summary judgment on this issue.

The U.S. Supreme Court affirmed, holding the FDAMA's prohibitions on advertising and promotion of compounded drugs are unconstitutional. In the five-four decision, authored by Justice Sandra Day O'Connor, the Court concluded that the FDAMA advertising restrictions failed the Central Hudson test for regulating commercial speech. The Court acknowledged the important governmental interest in preserving the integrity of the new drug approval process while, at the same time, ensuring that compounded drugs are available to patients with certain sensitivities. Given the economic realities of drug compounding, the Court recognized the need "to draw a line between small-scale compounding and large-scale drug manufacturing." However, the Court disagreed with the government's assertion that advertising was the appropriate barometer for triggering the FDA approval process. Even assuming the FDAMA prohibitions "directly advance" the governmental interest in preserving the FDA approval process, the Court said the government had failed to show that other less restrictive alternatives could not be employed to meet those interests. The Court noted "[s]everal non-speech related means" that could be equally effective in preventing large-scale compounding from undermining the new drug approval process. Among the alternatives cited by the Court were banning the use of "commercial scale manufacturing or testing equipment for compounding drug products" and prohibiting pharmacists from "[o]ffering compounded drugs at wholesale to other state licensed persons or commercial entities for resale." Aside from the government's failure to justify the speech regulation, the Court also observed that the FDAMA prohibitions restrict a substantial amount of beneficial speech. For example, the Court said, the restrictions would prevent pharmacists from informing doctors about alternative drugs available through compounding that could be used in treating patients with special needs. "The fact that the FDAMA would prohibit such seemingly useful speech even though doing so does not appear to directly further any asserted governmental objective confirms our belief that the prohibition is unconstitutional," the Court wrote.

Citing "considerable evidence that consumer oriented advertising will create strong consumer-driven demand for a particular drug," a dissenting opinion argued that the majority overlooked the FDAMA's important safety objective of preventing patients from seeking compounded drugs where not medically necessary. The dissent discounted the alternatives to the advertising restrictions offered by the majority, finding no "significantly less restrictive way" for achieving the statute's safety objective.

Thompson v. Western States Med. Ctr., No. 01-344, 122 S. Ct. 1497 (U.S. Apr. 29, 2002) (18 pages).

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