Pharmaceutical Gift Laws and Commercial Speech Under the First

133

Journal ofHealth & Biomedical Law, VIII (2012): 133-172

C 2012 Journal ofHealth & Biomedical Law

Suffolk University Law School

Pharmaceutical Gift Laws and Commercial SpeechUnder the First Amendment in the Wake of Sorrell v.

IMS Health, Inc.

Marcia M. Bournil*

Introduction

In recent years the practice of pharmaceutical companies courting health care

practitioners and lavishing them with gifts - ranging from simple pens and meals to

resort travel for educational junkets that satisfy continuing medical education

requirements - has been accepted as routine. The literature suggests, though it has

never actually been proven, that even modest gifts instill a sense of obligation in the

recipient that accomplishes its intended effect: physicians tend to prescribe products

promoted by their sponsor more often than other products.' At the very least, the mug

that prominently displays the company's name serves as a reminder that its product is

available for medical conditions likely treated by the practitioner. Amidst a flurry of

state laws being developed to address a growing concern about pharmaceutical industry

conflicts of interest, a 2008 Prescription Project report estimated that the industry spent

$7.2 billion (excluding drug samples) peddling its wares, primarily in the form of gifts,meals, and medical conference expenses. 2 Few states or organizations actually restricted

* Marcia M. Boumil, MA, MS, JD, LL.M is an Associate Professor of Public Health andCommunity Medicine and the Assistant Dean for Conflict of Interest Administration at TuftsUniversity School of Medicine. Professor Boumil also serves as the Tufts Director of theJD/MPH dual degree program with Northeastern University School of Law.I See Jason Dana & George Lowenstein, A Social Science Per ective on Gifts to Physicians FromIndustry, 290 JAMA 252, 253-55 (2003); ASS'N OF Ai. MED. COLLEGES, THE SCIENTIFIC BASIS

OF INFLUENCE AND RECIPROCITY: A SYMPOSIUM 7-8 (2007), available at http://www.ohsu.edu/xd/about/services/integrity/coi/gifts/upload/AAMC-The-Science-of-Influence.pdf.Research indicates that such influence occurs in ways that individuals cannot perceive and createssubtle biases that are not humanly possible to eliminate. Dana & Lowenstein, supra, at 253-55.2 THE PRESCRIPTION PROJECT, GIFTS, MEALS AND ENTERTAINMENT: A TOOLKIT FOR

ACADEMIC MEDICAL CENTERS, 1 (2008), available at http://www.prescriptionproject.org/

HeinOnline -- 8 J. Health & Biomedical L. 133 2012

JOURNAL OF HEALTH & BIOMEDICAL LAW

pharmaceutical giveaways3 and those that addressed them at all did so primarily in the

form of ethical guidelines such as those established by the American Medical

Association ("AMA") and voluntary regulations such as those set forth by the

Pharmaceutical Research and Manufactures of America ("PhRMA"), the trade

association for the pharmaceutical and medical device industry. 4 For years, efforts to

rein in pharmaceutical marketing fell largely on deaf ears.

And what was the position on giveaways of those who were primarily affected?

Patients who would ultimately be prescribed pharmaceutical products by physicians

influenced by the giveaways knew little of the practice and had even less to say about it.

Many health care practitioners did not acknowledge the influence of pharmaceutical

marketing tactics, if they even understood it. They had simply come to expect that gifts

from pharmaceutical detailers were the norm, and they were entitled, if not expected, to

indulge in the generosity. After years of vocal objection by a relatively few activists,state legislatures and the U.S. Congress finally began to acknowledge what is today

clearly understood - the giveaways at the heart of marketing practices endemic to the

profession create serious conflicts of interest between medical practitioners and the

pharmaceutical industry.5

To date, approximately twenty-five states have proposed or adopted laws that

address the marketing practices of pharmaceutical and medical device companies. 6 Most

laws target transparency, requiring disclosure of such relationships but not otherwise

limiting them; only a handful of states have laws that either prohibit or meaningfully

restrict the giveaways.7 Those that impose disclosure requirements usually include the

tools/initiativesresources/files/0010.pdf.3 See infra Part 1II.A.4 See OIG Compliance Program Guidance for Pharmaceutical Manufacturers, 68 Fed. Reg.

23,731, 23,731-32 (May 5, 2003). The guidelines that the Office of the Inspector General

("OIG") issued were at the recommendation of both the American Medical Association

("AMA") and the Pharmaceutical Research and Manufacturers of America ("PhRMA"). Id. at

23,732. Though the guidelines are voluntary in compliance, the comprehensive guidelines are

extensive and set forth procedures for creating an ethical compliance program for each

manufacturer. Id. at 23,731.s See generally JEROME P. KASSIRER, ON THE TAKE: How MEDICINE'S COMPLICITY WITH BIGBUSINESS CAN ENDANGER YOUR HEALTH 200-01 (2005) (noting that regulations have been put

in place for reasons including both ethical and cost considerations).6 See Markeing and Direct-to-ConsumerAdvertising (DTCA) of Pharmaceuticals, NAT'L CONFERENCE OF

STATE LEGISLATURES, http://www.ncsl.org/issues-research/health/marketing-and-advertising-of-pharmaceuticals.aspx (last updated Nov. 2010) [hereinafter Marketing and Advertising ofPharmaceuticals].7 See The Center for Ethics in Government, 50 State Table: Gift Laws - Restrictions, Prohibitions,

134 VOL. VIII NO. 2



obligation to report gifts over a specified dollar amount (usually $25 or $50) to a specific

state agency, and in some instances on public websites.8 California and Colorado are

examples of states with comprehensive disclosure laws.9 On the other hand, in 2010,

Maine enacted legislation that required pharmaceutical product and medical device

manufacturers to file annual reports with the state Department of Health and Human

Services that specify the "value, nature, purpose and recipient" for all promotional items

including educational or information programs, food, entertainment, gifts over $25,

travel expenses, and product samples, excluding free patient samples. 0 That law,

Exceptions, NAT'L CONFERENCE OF STATE LEGISLATURES, http://www.ncsl.org/?Tabld=15316(last updated Feb. 2012) [hereinafter 50 State Table].8 See KASSIRER, supra note 5, at 201; Markeing and Advertising of Pharmaceuticals, supra note 6.9 California passed two laws that regulated the marketing and advertising practices ofpharmaceutical companies. CAL. HEALTH & SAFETY CODE § 119402 (West 2005); S.J. Res. 24,ch. 139 (Ca. 2004). The law required that pharmaceutical companies doing business in the stateadopt a Comprehensive Compliance Program, which adopts policies governing marketinginteractions with health care professionals and imposes limits on gifts and other incentivesprovided to medical or health professionals. HEALTH & SAFETY 119402(a)-(d). In particular,the law required that include "specific annual dollar limit on gifts, promotional materials, or itemsor activities that the pharmaceutical company may give or otherwise provide to an individualmedical or health care professional." Id. §119402(d)(1). Further, pharmaceutical companies arerequired to publish annual declarations of compliance on company websites indicating publicvisibility. Id. § 119402(e). The program must be in accordance with the United StatesDepartment of Health and Human Services ("DHHS") OIG publication "Compliance Programfor Pharmaceutical Manufacturers." Id. 5 119402(a). SJR 24 requests the President and U.S.Congress to recognize the problems caused by direct-to-consumer advertising of prescriptiondrugs by pharmaceutical companies and to take specified actions in the regulation of consumeradvertising of prescription drugs. Cal. S.J. Res. 24. In 2010, Colorado enacted into law two bills.COLO. REV. STAT. 5 24-34-111 (2010); COLO. REV STAT. § 24-34-110 (2010). One requirespharmaceutical and medical device manufacturers to submit to DHHS certain payments frompharmaceutical and medical device manufacturers to health care professionals. 5 24-34-111. Italso requires the Colorado Department of Regulatory Agencies to post on its website thereported data pursuant to its transparency and disclosure provisions. Id. A second law was arevision of a 2008 Michael Skolnick Medical Transparency Act. 5 24-34-110. The 2008 lawrequired physicians to report certain annual income over $5000 derived from health care-relatedcontracts (employment or independent contractor) to the Director of the Colorado Division ofRegistrations. Id. The 2010 "Transparency Act" adopted the same disclosure requirements butapplied them other health care practitioners such as nurses, physician assistants, physicaltherapists and dentists. Id. This income is thereafter disclosed on a public website. Id. TheColorado law is notable for its absence of a "trade secret" exception allowing disclosures to bewithheld when they contain certain competitive information or trade secrets concerning productdevelopment. Id.10 ME. REV. STAT. tit. 22, § 2699 (2010) (repealed 2011); see also Susan Chimonas et al., Show us themoney: Lessons in transpareny from state pharmaceutical marketing disclosure laws, 45 HEALTH SERVICESRES. 98, 99-100 (2010), http://www.allacademic.com/meta/p304680_index.html. Maine,

2012 135



however, was repealed in 2011 following an ideological shift in the elected officials." It

may have been based, at least in part, on a brewing controversy in Massachusetts over its

pharmaceutical marketing laws which are reputed to be the toughest in the country.12

In 2011, with well-organized industry efforts bubbling up in Massachusetts to

reverse the new marketing restrictions, the U.S. Supreme Court issued an opinion which

may significantly decrease the ability of states to enforce some of these new regulations.

In Sorrell v. IMS Health, Inc.,' 3 the Court reviewed the constitutionality of a neighboring

Vermont statute which attempted to restrict the ability of pharmaceutical companies to

purchase certain physician-identified prescription data for subsequent use in the

marketing of their products.14 In particular, the Court considered whether a Vermont

law prohibiting the sale and use of prescriber-identified pharmacy records by

pharmaceutical companies (but not others) would impose an undue burden on speech

under the First Amendment. 5 In striking down the law, the Court reviewed the statute

under a "heightened" level of First Amendment scrutiny because it determined the

Vermont statute presented both content- and speaker-based burdens on speech.16 In

Sorrell, the application of this more stringent standard, rather than the usual intermediate

level of scrutiny urged by the dissent for regulation of commercial speech, contributed

to the Court's striking down the Vermont law.'7

Part I of this paper gives a brief overview of pharmaceutical and medical device

industry gifts and giveaways, including the so-called free lunches sponsored by

pharmaceutical and medical device companies, which for years had simply become part

of the fabric of medical practice. It reviews three current representative state laws-

Minnesota, Massachusetts, and Vermont-that either (a) prohibit or limit

Vermont and D.C. have set the threshold for reporting at $25. Chimonas et al., supra, at 101.11 H.P. 828, 125th Leg, 1st Reg. Sess. (Me. 2011) (repealing tit. 22, 52699 with An Act To RestoreMarket-based Competition for Pharmacy Benefits Management Services). "Maine joinedWisconsin in going from complete Democratic control of state government, including thelegislature and the governorship, to complete Republican control." Josh Goodman, Republicans

Win Most Legislatve Seats in Generations, STATELINE.ORG (Nov. 3, 2010), http://www.stateline.org/live/details/story?contentId= 525539.12 Matthew Arnold, Massachusetts Antes Up with Tough Transparency Law, MEDICAL MARKETING &

MEDIA (Mar. 29, 2009), http://www.mmm-online.com/massachusetts-antes-up-with-tough-transparency-law/article/128709/ (quoting the Massachusetts State's Deputy Counsel in statingits "the most stringent of the existing state laws").13 131 S. Ct. 2653 (2011).14 Id. at 2656 (outlining the "detailing" process and Vermont's Prescription Confidentiality Law).'5 Id.16 Id. at 2672.17 Id. at 2664-72; see also id. at 2685 (Breyer, J., dissenting).

VOL. VIII NO. 2136



pharmaceutical and device manufacturers' gifts and giveaways to health care

professionals, or (b) impose restrictions on consuming meals during the course of an

industry-sponsored promotional presentation. Part II reviews the majority and

dissenting opinions in Sorrell v. IMS Health, Inc., focusing on the imposition of a

heightened level of First Amendment scrutiny as applied to the "speech" implicated in

the Vermont statute. Part III examines First Amendment case law using both an

intermediate level of constitutional scrutiny, which is generally applied to commercial

speech, and a heightened level of scrutiny, which the Court applied to pharmaceutical

marking efforts in Sorrell. Part IV concludes by analyzing the anticipated impact of

Sorrell on the state laws that prohibit or restrict gifts, giveaways, and the provision of

meals accompanying presentations and other events sponsored by the pharmaceutical

and medical device industries.

I. Overview of Gift-Giving within the Pharmaceutical and Medical Device

Industries

In 1982 the Center for Disease Control estimated that the United States spent

an aggregate of approximately $15 billion annually on retail prescription drugs.18 Two

decades later that total had grown to $162 billion.19 While much of this increase resulted

from the development and availability of new drugs, another substantial portion is

attributable to the level of spending by the pharmaceutical industry on sales and

marketing practices directed at physicians. 20 Today, there are adequate data to support

the conclusion that industry marketing strategies that target health care practitioners,including gifts and giveaways, substantially influence prescribing patterns, both in terms

of selecting the heavily-marketed brand name products over less expensive generic drugs

as well as choosing drug options at all.21 The literature on pharmaceutical giveaways is

expansive and compelling.22 Notably, some of the most reliable data comes from the

1s Michele Masucci et al., Gift Bans, NIXON PEABODY LLP (July 2009), http://www.nixon

peabody.com/linked-media/publications/Health LawAlert_-_07_02_2009_.pdf.19 Id.; see also Dana & Lowenstein, supra note 1, at 252-53.20 See Dana & Lowenstein, supra note 1, at 252-53; see also Mark-Andre Gagnon & Joel Lexchin,The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States, 5PLoS MED. 29, 32 (2008), available at http://www.plosmedicine.org/article/info:doi/10.1371/

journal.pmed.0050001. 2004 data shows that the U.S. pharmaceutical industry spent almost twiceas much on promotion as it did on research and development. Id.21 See Dana & Lowenstein, supra note 1, at 253-54.22 See, e.g., Marcia Boumil & Harris Berman, Revisiting the Physidan/Industry Alliance: The Bayh-Dole

Act and Conflict of Interest Management at Academic Medical Centers, 15 MICH. ST. U. J. MED. & L. 1, 7(2010); Troyen Brennan et al., Health Industry Practices That Create Conflicts of Interest: A Policy Proposal

for Academic Medical Centers, 295 JAMA 429, 430 (2006); Dana & Lowenstein, supra note 1, at 253-

2012 137



marketing research conducted by the pharmaceutical and medical device industry itself.23

For more than a decade individual states have been taking action to regulate the

influence pharmaceutical and medical device manufacturers exert over prescribers.

Massachusetts, Minnesota, and Vermont in particular enacted laws that prohibit some

types of giveaways such as travel, "hospitality" (e.g., tickets to theater and sporting

events), and meals provided by the industry that are outside of the professional office or

hospital setting.24 Many other states now have laws that require pharmaceutical and

medical device companies to report all "payments" to health care practitioners that

exceed a minimum threshold to be posted on a publicly-accessible website. 25

Presumably, the legislative goal is primarily to expose, discourage, and/or embarrass

those who accept gifts and giveaways.

While many health care professionals in Massachusetts applaud that state's

tough stance and are content with its stringent mandates, others are fiercely opposed

and some have actively lobbied for repeal of the law - an effort that twice cleared the

Massachusetts House of Representatives but was thereafter rebuffed by the Senate. 26 In

the early days of the Massachusetts law, there were reports about pharmaceutical

companies canceling medical meetings in Massachusetts and reconsidering plans to

locate or do business in Massachusetts, where the local economy thrives on its

substantial pharmaceutical presence.27 There were anecdotes about physicians attending

professional meetings out of town, only to be told they were not welcomed at certain

54; Catherine Marco et al., Gifts to Physidans from the Pharmaceutical Industry: An Ethical Analysis, 48

ANNALS EMERGENCY MED. 513, 517 (2006).23 See Dana & Lowenstein, supra note 1, at 254.24 See generally Marketing and Advertising of Pharmaceuticals, supra note 6 (providing a comprehensive

review of state pharmaceutical disclosure laws). Note that nothing in the final regulations

prohibits continuing medical education and professional societies from using hotels, convention

centers and other special event venues for educational meetings. See id.25 See Rebecca Dresser, Pharmaceutical Company Gifts: From Voluntary Standards to Legal Demands,

HASTINGS CTR. REP., May-June 2006, at 8, 8; see also Marketing and Advertising of Pharmaceuticals,supra note 6.26 MAss. GEN. LAWS ch. 11IN, 55 1-7 (2010); see Katherine Hobson, Follow-Up: Massachusetts Gft

Ban Won't Be Repealed, WSJ BLOGS, Aug. 2, 2010, http://blogs.wsj.com/health/2010/08/02/follow-up-massachusetts-gift-ban-wont-be-repealed/; see also Thomas Sullivan,Massachusetts House Votes Overwhelmingy to Repeal the Code of Conduct AKA the "Gift" Ban, POLICY

AND MEDICINE, Apr. 26, 2011, http://www.policymed.com/2011/04/massachusetts-house-votes- overwhelmingly-to-repeal-the-code-of-conduct-aka-the-gift-ban.html.27 See Thomas Sullivan, Massachusetts Gft Ban Costing State MedicalJobs, POLICY & MED. (Mar.3, 2010, 7:32 AM) http://www.policymed.com/2010/03/massachusetts-gift-ban-costing-state-medical-jobs.html.

138 VOL. VIII NO. 2



events that serve food which, pursuant to Massachusetts law, they are prohibited from

consuming.28 Some were reportedly offended by the suggestion that their prescribing

habits or loyalty could be bought with a cup of coffee or yogurt.29

The outpouring of sentiment in response to the Massachusetts law is

compelling, although the genuineness of the rhetoric is unclear. There is a paucity of

good evidence that the Massachusetts law has resulted in fewer health care companies or

conferences in the state, despite the many anecdotes about the loss of valuable informal

dinner meetings that are now prohibited. The professional literature providing the data

that describe the concept of reciprocity - feelings of indebtedness as a result of receiving

giveaways - has been criticized.30 The Maine legislature, which enacted its own conflicts

of interest regulations imposing new transparency rules, recently reversed its law.31 The

wisdom of the Massachusetts pharmaceutical marketing legislation (particularly its meals

provision) is far from universally embraced and there are those who are committed to

repealing it.32

Overall, reaction to the Massachusetts law is mixed and more data is needed to

substantiate the various positions. Some commentators are concerned that, if the law

were repealed, "the prescription-buying public will end up eating the cost in more ways

than one." 33 Reliable evidence still needs to be gathered to support or deny the

conclusion that the meals rule serves its intended purpose, or even saves the

Massachusetts taxpayers money. What seems to be better documented, at least by way

of anecdote, is that the number of informal "educational" programs generally sponsored

by the pharmaceutical companies has declined within the state. Many health care

practitioners relied upon these programs to learn about new drug products, safety

information, and conditions that the new products are FDA-approved to treat.34

28 Tamar Hosansky, Pharma Dinner Meetings Banned in the Bay State, MEETINGSNET.COM (Apr. 20,2009, 12:31 PM), http://meetingsnet.com/medicalmeetings/news/0420-pharma-dinner-meetings-banned/.29 See e.g., Dennis Ausiello & Thomas P. Stossel, Op-Ed., Legislators Cure in Need of Malady ConflictsDon't Sicken Health Care, Bos. HERALD, Apr. 17, 2008, at 23, available at http://www.bostonherald.com/news/opinion/oped/view.bg?articleid=1087609.30 John Dudley Miller, Conflict of Interest Spurs New Rules, Not Consensus, 98 J. NAT'L CANCER INST.1678, 1679 (2006), available athttp://jnci.oxfordjournals.org/content/98/23/1678.full.pdf; see alsoThomas Stossel & Lee Kirby, Has the Hunt for Conflicts of Interest Gone Too Far? Yes, 336 BRIT.MED. J. 476, 477 (2008).31 ME. REV. STAT. tit. 22, 5 2699 (2003) (repealed 2011).32 See, e.g., Ausiello & Stossel, supra note 29, at 23.33 Editorial, Feeling a Conflict of Interest, Bos. GLOBE, May 5, 2011, available at http://articles.boston.com/2011 -05-02/bostonglobe/29496577_1__gft-ban-drug-industry-drug-reps.34 See e.g., Tinker Ready, BHN Exclusive: Mass Gift Ban Takes a Beating From ACRE, BOS. HEALTH

2012 139



Believing that to a large extent such reliance was misplaced (often from primarily

marketing sources) Massachusetts appears to be willing to accept that result.

More than a few practitioners report having developed a "deep resentment at

suggestions that health care providers make treatment decisions based upon a free

meal." 35 While practitioners often believe that they "recognize marketing, whether from

a pharmaceutical company promoting its medicine or an insurer promoting a generic,"

the data concerning the effectiveness of pharmaceutical marketing strategies and the

impact of marketing efforts on the physicians who are targeted suggest significant

influence.36 There are large numbers of medical practitioners who simply refuse to

acknowledge that their prescribing habits can be meaningfully influenced by the drug

companies. 37

In 2007 the New England Journal of Medicine reported that ninety-four percent

of physicians receive drug samples, gifts, reimbursements, and payments from the

pharmaceutical industry.38 There have been numerous studies that report that marketing

giveaways do, in fact, influence the prescribing of drugs.39 This influence also leads to

greater reliance upon newer and more expensive, name-brand products in lieu of less

expensive generic alternatives, which may also lead to higher costs. 0 "Gifts inherently

influence prescribing decisions by fostering name recognition and reciprocity," said Dr.

Jean Silver-Isenstadt, National Physicians Alliance Executive Director.41 While there are

NEWS (July 24, 2009), http://tinkerready.wordpress.com/2009/07/24/bhn-exclusive-mass-gift-ban-takes-a-beating-pt-1/; Kate Atkinson, How the Massachusetts Gift Ban Hurts Pimary Care

Doctors, KEVINMD.CoM, http://www.kevinmd.com/blog/2010/07/massachusetts-gift-ban-hurts-primary-care-doctors.htmI (last visited Feb. 28, 2012); Massachusetts Law Hits Medical

Conventions, MEETINGSNET.COM (Jan. 26, 2009, 2:09 PM), http://meetingsnet.com/medical

meetings/news/massachusetts lawmedicalconventions_0109/.35 Thomas Sullivan, Massachusetts Code of Conduct: "Gift" Ban What's the Purpose, POLICYMED.COM(May 24, 2011, 5:18 AM), http://www.policymed.com/2011/05/massachusetts-code-of-conduct-gift-ban-whats-the-purpose.html.36 Id.

37 Brennan et al., supra note 22, at 429.38 Eric G. Campbell et al., A National Survey of Physician-Industry Relationships, 356 NEW ENG. J.MED. 1742, 1746 (2007).39 David Blumenthal, Doctors and Drug Companies, 351 NEW ENG. J. MED. 1885, 1887-88 (2004).

4 See id. at 1888. Physicians receiving benefits from drug companies were more likely "to requestthe inclusion of the company's drugs on hospital or health maintenance organization formularies,more likely to prescribe the company's products, and less likely to prescribe generic medications."Id.41 charley-on-the-mta, Docs and Med Student Support Gift Bans, BLUE MASs GROUP (June 26, 2008,5:37 AM), http://bluemassgroup.com/2008/06/docs-and-med-students-support-gift-ban/.

VOL. VIII NO. 2140



also those who challenge the literature, questioning the methodology and soundness of

the conclusions, the greatest evidence in support of influence is that which comes from

industry itself: "[t]he industry would not spend billions of dollars each year providing

gifts if it didn't increase sales."42

In the past nearly-twenty years since Minnesota became the first state to require

pharmaceutical companies to disclose payments made to medical practitioners for

honoraria, attendance at medical conferences, and compensation paid for consulting and

research, many other states and the federal government have either followed suit or at

least initiated legislation.43 Vermont passed its first law in 2001 requiring pharmaceutical

companies to disclose "the value, nature, and purpose" of gifts to health care providers

in excess of $25.44 Maine and the District of Columbia followed shortly thereafter in

2003 with West Virginia next in 2004.45 Massachusetts did not chime in until 2008.46

For the purposes of this discussion, the next section focuses on the laws in three states -

Massachusetts, Minnesota and Vermont. Specifically, it focuses on the laws largely

prohibiting medical industry gifts and giveaways, such as Vermont and Massachusetts, as

well as the prohibition in Massachusetts and Minnesota concerning free meals in

conjunction with industry-sponsored events that do not occur within a medical

practitioner's medical office or hospital setting and provide an educational presentation.

42 Id43 oseph S. Ross et al., Pharmaceutical Company Payments to Physicians: Early Experiences With

Disclosure Laws in Vermont and Minnesota, 297 JAMA 1216, 1216-17, (2007), available athttp://jama.ama-assn.org/content/297/11/1216.full.pdf.4State Laws on Pharmaceutical Marketing and Promotion, AM. COLL. OF PHYSICIANS, http://www.acponline.org/advocacy/state-policy/reports/pharm_market.htm (last visited Mar. 1,2012).45 See Marketing and Advertising ofPharmaceuticals, supra note 6 (noting that Maine and the District ofColumbia passed these laws in 2003); AM. COLL. OF PHYSICIANS, supra note 44; W. VA. CODE (5-16C-9(a)(4) (2001). "SB. 127 of 2001, states that the West Virginia Public EmployeesInsurance Agency may explore 'requiring prescription drug manufacturers to disclose to the stateexpenditures for advertising, marketing and promotion, as well as for provider incentives andresearch and development efforts."' AM. COLL. OF PHYSICIANS, supra note 44. West Virginia'slaw states:

(a) The director may explore innovative strategies by which West Virginia may

manage the increasing costs of prescription drugs and increase access toprescription drugs for all of the state's citizens, including: . . . (4) Requiring

prescription drug manufacturers to disclose to the state expenditures for

advertising, marketing and promotion, as well as for provider incentives and

research and development efforts.

W. VA. CODE § 5-16C-9(a)(4).46 See MASS. GEN. LAWS ch. 111N, §§ 1-7.

1412012



A. Minnesota

Minnesota was one of the first states to enact a law prohibiting manufacturers

or wholesale drug distributors and their agents from giving most gifts of value to a

medical practitioner. 47 Exempted from the law are "professional samples of a drug

provided to a prescriber for free distribution to patients," items that are valued at not

more than $50 in any calendar year, and payments made to the sponsor of a medical

conference or other educational program, including honoraria, consulting fees in

connection with research, payments for educations materials and salaries to paid

employees. 48 Meals are considered "gifts" unless provided to a speaker in conjunction

with an educational program or as part of a consulting contract. 49 Conference attendees

are limited to the $50 per year restriction.50

B. Massachusetts

In 2009, Massachusetts implemented what is reputed to be the most restrictive

of the state laws.51 The Massachusetts law prohibits pharmaceutical companies and

medical device manufacturers from providing food to physicians unless it is

accompanied by an educational presentation and held in a physician's office or hospital

setting.52 It also prohibits payment for all entertainment or recreational events and for

personal expenses related to attending continuing medical education or scientific

meetings unless the physician is being compensated as a presenter at such an event.53

Finally, although the Massachusetts law does not prohibit all "gifts," it does require

pharmaceutical companies and medical device manufacturers to post any non-restricted

gifts to a medical practitioner in excess of $50 per year on a public website 54 and

imposes fines on those who fail to comply with the law.5 5 The law disallows

47 MINN. STAT. ANN. § 151.461 (West 2011). Enacted in 1993, this law prohibits manufacturersor wholesale drug distributors and their agents from giving any gift of value to a practitioner. Id.48 Id

49 See Rikin S. Mebta, Why Self-Regulation Does Not Work: Resolving Prescription Corruption Caused by

Excessive Gift-Giving by Pharmaceutical Manufacturers, 63 FOOD & DRUG L.J. 799, 813-14 (2008).50 Id. at 813.51 See generally MASS. GEN. LAWS ch. 111N, §5 1-7. The law passed in 2008 and came into effect

January 1, 2009. Id. Marcia M. Boumil & Harris A. Berman, Toward a Greater Level of Transparency:The New Massachusetts Pharmaceutical IndustU Conflict of Interests Law, 10 HARV. HEALTH POL'Y REV.31, 33-34 (2009) (describing strong prohibitions made by the new law).52 MASS. GEN. LAWS ch. 111N 5 2.5 Id.; 105 MASS. CODE REGs. 970.007 (2010) (specifically allowing compensation for "a healthcare practitioner serving as a speaker").54 MASS. GEN. LAWS ch. 111N, § 6(1).5 Id. 5 7. "A person that violates this chapter shall be punished by a fine of not more than $5000

VOL. VIII NO. 2142



sponsorship of continuing education that does not meet the criteria for the

Accreditation Council on Continuing Medical Education.5 6 To the frustration of some,

the Massachusetts law stopped short of prohibiting gifts from drug companies and

device manufacturers altogether. The pharmaceutical companies lobbied aggressively in

Massachusetts to prevent passage of this law, and subsequently to repeal the law.57

While unsuccessful in that effort, the pharmaceutical companies did manage thus far to

forestall their greatest fear - that similar laws would be enacted in many other states.

C. Vermont

In 2010 Vermont, now one of the most progressive states in the field of

pharmaceutical transparency and disclosure laws, amended its 2004 legislation5

concerning the relationship between health care professionals and pharmaceutical and

medical device manufacturers.59 The new Vermont law includes a prohibition on gifts

by pharmaceutical and medical device manufacturers to health care professionals and

also obligates drug and device manufacturers to disclose distribution of free product

samples provided to health care providers. 60 As a variation of the Massachusetts law,

Vermont permits drug and device manufacturers to provide small refreshments at their

for each transaction, occurrence or event that violates this chapter." Id.56 Id. 5 2 (outlining the specific conduct not allowed by the Department).57 See generally Thomas Sullivan, Massachusetts Gubernatorial Candidates Unanimously Support Repeal ofGift Ban, POLICY & MED. (OCT. 7, 2010, 6:02 AM), http://www.policymed.com/massachusetts-code-of-conduct/ (discussing the controversial law and the vigorous acts by many to have itrepealed).58 AM. COLL. OF PHYSICIANS, supra note 44. In 2004, Vermont passed a bill requiringpharmaceutical marketers to annually disclose "the value, nature and purpose" of their marketingactivities in the state. Id.

It covers most gifts, fees and payments over $25 made to doctors or other

health professionals (anyone in Vermont authorized to prescribe, dispense, or

purchase prescription drugs in the state), with a $10,000 penalty for violations.

Free samples, clinical trials, material having a value less than $25 and

scholarship funding are exempt from disclosure. Trade secrets are to be kept

confidential.

Id.; see also 2004 Vt. Acts & Resolves 122 ("An Act Making Appropriations for the Support ofGovernment"); 2002 Vt. Acts & Resolves 127 ("An Act Relating to Prescription Drug CostContainment and Affordable Access") (amending VT. STAT. ANN. tit. 33, 5 1997).s9 VT. STAT. ANN. tit. 18, 5 4632 (2008) (requiring pharmaceutical manufacturers to discloseprescribed product expenditures and permitted gifts to the attorney general and describingprocedures for disclosure).60 Id. § 4632(a)(2)(A).

2012 143



conference booths. 61 Vermont also exempts from its gift ban the donation of

pharmaceuticals and medical devices to free clinics or patient assistance programs. 62 It

also permits pharmaceutical and device companies that sponsor continuing medical

educational programs to fund meals and snacks for conference participants. 63

II. The U.S. Supreme Court: Sorrell v. IMS Health, Inc.6

In 2011, by a ruling of 6-3, the Supreme Court struck down a different but

related Vermont law that prohibited pharmacies, data vendors, pharmaceutical

companies, and marketers from selling, licensing, or exchanging prescriber-identifiable

prescription information for purposes of prescription drug promotion. 65 Prior to

passage of this law, data vendors would purchase certain prescriber-identified records

from pharmacies and other organizations and sell them to pharmaceutical companies

and others. 66 When aggregated, this data would give pharmaceutical companies detailed

information about a physician's prescribing habits and allow the companies to customize

their marketing to individual physicians. 67 In other words, in planning a marketing pitch

to a particular physician, the company would use the information gleaned through data

mining to tailor its presentation. The Vermont Prescription Confidentiality Law, which

permitted data mining for some uses (such as research), but not for others (primarily

marketing), was intended to further the state's goals, primarily managing health care

costs by encouraging less reliance on brand-name products and greater use of generic

drugs. 68 The Supreme Court struck down the law on grounds that the regulation, which

61 Id. 5 4632(a)(1)(A)(v) (allowing coffee or snacks to be served at both conferences andseminars).62 Id. 5 4632(a)(1)(A)(vii) (requiring that these products must be distributed free of charge or at adiscounted price according to a manufacturer-sponsored or manufacturer-funded program).63 See id. 5 4361a(b)(2).64 This section is a summary of a section in the article, Marcia M. Boumil et al., Pharmaceutical DataMining, Medical Privag and the First Amendment: The U.S. Supreme Court in Sorrell v. IMS Health, Inc.,21 ANNALS HEALTH L. 447 (2012).65 Sorrell v. IMS Health Inc., 131 S. Ct. 2653, 2668 (2011).66 See 2007 Vt. Acts & Resolves 80, available at http://www.leg.state.vt.us/docs/egdoc.cfm?

URL=/docs/2008/acts/ACTO8O.htm (discussing legislative findings on "prescriber identity datamining"). Prescriber-identified records would include the name of the physician, the date, the

product(s) prescribed and certain other information. Id.67 See id. (noting data mining "allows [tracking and linking] prescribing habits of nearly every

physician in Vermont").68 VT. STAT. ANN. tit. 18, § 4631 (2008). Under § 4631(a), "It is the intent of the generalassembly to advance the state's interest... through the promotion of less costly drugs." Id.

Under § 4631(d), entities could not "sell, license, or exchange [regulated records] for value" or"use prescriber identifiable information for marketing or promoting" without prescriber consent.

VOL. VIII NO. 2144



imposed both content- and speaker-based burdens on protected speech, would be

examined for First Amendment purposes using a standard of "heightened" - not

intermediate - scrutiny.69 While recognizing the importance of Vermont's asserted

interests - protecting medical privacy, reducing health care costs, and safeguarding

public health - Justice Kennedy, writing for the majority, concluded that the statute did

not meet this rigorous First Amendment standard.70

For purposes of the First Amendment analysis, the majority opinion divided the

Vermont regulation into three constituent parts: (1) the prohibition against pharmacies,health insurers, and similar entities from selling prescriber-identifiable information

without the physician's consent; (2) the ban on pharmacies, health insurers, and other

similar entities from using physicians' identifiable information for marketing activities,even with their consent; and (3) the provision directly forbidding pharmaceutical

manufacturers and marketers from using prescriber-identifiable data without prescriber

consent to shape the company's marketing messages.71 The majority opinion held that

the first two measures discriminated against speech on the basis of its content, in light of

the fact that the Vermont regulation offered several state-approved purposes for which

prescriber-identifiable data could be sold and used. 72 In addition to disfavoring

marketing, the regulation burdened pharmaceutical companies and detailers, without

necessarily foreclosing the possibility that the information might be "purchased or

acquired by other speakers with diverse . . . viewpoints" (i.e., academic organizations or

other entities who might use the information to undertake a counter-detailing

program).73

Id.69 Sorrell, 131 S. Ct. at 2659.70 Id. (stating "the law cannot satisfy that standard").71 Id. at 2660. The Court chastised Vermont for offering an interpretation of this provision atoral argument that diverged from the construction the state had given it in the proceedingsbelow. See id. at 2662 (finding the state's change in position "particularly troubling in a FirstAmendment case"). Initially, Vermont represented that the first portion of 4631(d) barredpharmacies, health insurers, and other similar entities from selling or distributing prescriber-identifiable information for marketing purposes only. Id. At oral argument, Vermont thenrepresented that the sentence at issue prohibited regulated entities from selling prescriber-identifiable data for any purpose, aside from the exceptions specified in § 4631(e). Id. In acomment that did not bode well for Vermont's case, the Court noted it was especiallydisconcerting for the state to waver on the interpretation of its own statute "in a FirstAmendment case, where plaintiffs have a special interest in obtaining a prompt adjudication oftheir rights, despite potential ambiguities of state law." Sorrell, 131 S. Ct. at 2662 (citing Houstonv. Hill, 482 U.S. 451, 467-68, n.17 (1987); Zwickler v. Koota, 389 U.S. 241, 252 (1967)).72 Sorrell, 131 S. Ct. at 2660.73 Id. at 2659.

2012 14 5



From the legislative history and statutory language of the Prescription

Confidentiality Law, the Sorrell majority found that Vermont's statement that detailers'

messages often conflicted with the goals of the state demonstrates the state's clear intent

to "diminish the effectiveness of marketing by manufacturers of brand-name drugs." 74

The majority viewed this as a "specific, content-based burden" on otherwise protected

speech sufficient to invoke the constitutional standard of heightened scrutiny.75

Furthermore, according to the majority, the state's argument that heightened scrutiny

was inapplicable to a "mere commercial regulation" had no merit as the regulation

imposed "more than an incidental burden on protected expression."7 6 The prohibition

on the sale or use of prescriber-identifiable information imposed by the regulation

differed in material ways from, for example, a prohibition on race-based hiring that

would obligate employers to remove a "White Applicants Only" sign77 or a municipal

ordinance prohibiting outdoor fires that might happen to forbid flag-burning.78 In

passing this law, the state intentionally regulated commercial speech specifically based

upon its content and the rpeakers communicating it.79

As to the state's argument that the regulation restricted access to information

that data-mining and pharmaceutical companies had no legal right to obtain, the majority

found it unpersuasive that prescriber-identifiable data was "generated in compliance

with a legal mandate . . . and so could be considered a kind of governmental

information."80 The majority distinguished Los Angeles Police Department v. United

Reportingfl by pointing out that the Vermont law addressed access to records already in

private hands and therefore implicated the regulated entities' right to use or disseminate

information within their possession.82 Further, the complainant in United Reporting had

74 Id. at 2663.75 Id. at 2664; see also Turner Broadcasting Sys., Inc. v. FCC, 512 U.S. 622, 658 (1994)

(emphasizing that regulations manifesting "aversion" to what "disfavored speakers" have to say

should be subject to strict scrutiny); City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410,418 (1993) (applying a higher level of scrutiny to "a categorical prohibition on the use of news

racks to disseminate commercial messages"); Ward v. Rock against Racism, 491 U.S. 781, 791(1989) (noting that the First Amendment mandates strict scrutiny anytime the government

promulgates "a regulation of speech because of disagreement with the message it conveys").76 Sorrell, 131 S. Ct. at 2664-65.77 Id. at 2664-65 (citing Rumsfeld v. Forum for Academic & Institut. Rights, Inc., 547 U.S. 47, 62(2006)).78 Id. (citing R.A.V. v. City of St. Paul, Minnesota, 505 U.S. 377, 385 (1992)).79 Id. at 2665.80 Id.81 528 U.S. 32 (1999).82 See Sorrell, 131 S. Ct. at 2665-67 (relying on Bartnicki v. Vopper, 532 U.S. 514, 527 (2001); Fla.Star v. B.J.F., 491 U.S. 524 (1989); Seattle Times Co. v. Rhinehart, 467 U.S. 20, 32 (1984); N.Y.

146 VOL. VIII NO. 2



not suffered a personal First Amendment injury insofar as the plaintiff had "neither'attempt[ed] to qualify' for access" to the police records in question nor presented an"as-applied" challenge.83 By contrast, the majority in Sorrellbelieved that the data mining

companies and PhRMA had a reliable basis for asserting that the Vermont regulation

impermissibly burdened their own speech.84

The Sorrellmajority refused to construe the Vermont regulation as a restraint on

conduct (as opposed to speech), holding that the creation and distribution of information

constituted protected expression within the meaning of the First Amendment.85 "Facts,after all, are the beginning point for much of the speech that is most essential to advance

human knowledge and to conduct human affairs," the majority noted. 86 Thus,Vermont's imposition of content- and speaker-based burdens on the availability and use

of prescriber-identifiable data was conceptually comparable to a law forbidding trade

publications from purchasing or using ink.87 Even assuming that prescriber-identifiable

information represented a "mere commodity," as Vermont argued, the majority found

the Vermont regulation's restrictions objectionable to the First Amendment.88

After finding the Vermont regulation to be content-based on its face and

viewpoint-discriminatory in practice, the majority concluded that it could not withstand

even intermediate scrutiny.89 In so holding, it acknowledged that burdens on

commercial speech are traditionally analyzed under a standard of intermediate scrutiny,using a four-part test articulated in Central Hudson Gas e'& Electric Corp. v. Public Service

Times Co. v. United States, 403 U.S. 713 (1971) (per curiam)).83 Id. at 2666.84 Id85 Id. at 2667 (citing Bartnicki v. Vopper, 532 U.S. 514, 527 (2001)) ("'[Ijf the acts of 'disclosing'and 'publishing' information do not constitute speech, it is hard to imagine what does fall withinthat category, as distinct from the category of expressive conduct' (some internal quotation marksomitted)"; Rubin v. Coors Brewing Co., 514 U.S. 476, 481 (1995) ("information on beer labelsconstitutes commercial speech"); Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S.749, 759 (1985) (plurality opinion) ("credit report is 'speech")).86 Id, at 2667.87 Id.88 See Sorrell, 131 S. Ct. at 2664. Notwithstanding the lower level of scrutiny traditionally appliedto commercial speech, in this case, the majority displayed a markedly protectionist attitudetoward such expression. See id. For example, the majority explicitly stated that "[a] 'consumer'sconcern for the free flow of commercial speech often may be far keener than his concern forurgent political dialogue' . . . That reality has great relevance in the fields of medicine and publichealth, where information can save lives." Id. (quoting Bates v. State Bar of Ariz., 433 U.S. 350,364 (1977)).89 Id. at 2663-65.

2012 147



Commission of New York. 0 First, the majority rejected the argument that the law was

intended to support Vermont's articulated interest in protecting medical privacy.91

Commenting on the Vermont regulation's opt-in opportunity, the Sorrell majority

believed that this provision was inadequate to "insulate [the Prescription Confidentiality

Law] from First Amendment challenge." 92 Though having an effect of giving physicians

some privacy in their prescription choices, the opt-in provision presented physicians

with an odd choice: participate in allowing their information to be sold and used for

pharmaceutical marketing or refuse consent, thus giving in to the state's unconstitutional

participation in "burdening disfavored speech by disfavored speakers." 93 In light of the

fact that the Prescription Confidentiality Law contained provisions that left numerous

uses of prescriber-identifiable information unscathed, the Sorrell Court concluded that

replacing the statute's opt-in language with the alternative opt-out provision might

achieve the goal of being less restrictive but only mask the reality that Vermont was

willing to suppress a particular distasteful message to achieve an important state

interest. 94

The Sorrell majority was equally unreceptive to the state's argument that the

regulation was necessary to shield physicians from detailers' "harassing sales

behaviors."95 While "a few" physicians had apparently sought legislative relief, it was an

90 447 U.S. 557, 566-71 (1980) (outlining and applying the 4-part test); infra notes 148-160

(discussing Central Hudson test). Although the state's prescribers had an interest in preserving the

confidentiality of their patients' medical privacy and perhaps even their drug choices, the Court

declined to hold that the regulation would further that interest. Sorrell, 131 S. Ct. at 2668.

Specifically, pharmacies retained the ability to transfer prescriber-identifiable data to others for

purposes not related to marketing such as insurers, researchers, journalists, etc. who might use

that information to engage in activities that the state chose to further. Id. The majority did

suggest that Vermont could have developed "a more coherent policy" to address physician

confidentiality "by allowing the [regulated] information's sale or disclosure in only a few narrow

and well-justified circumstances." Id. In making de-identified patient prescription records

"available to an almost limitless audience," except to "a narrow class of disfavored speakers,"

Vermont undermined its own medical privacy argument. Id.

91 Sorrell, 131 S. Ct. at 2668. Since the nature of the speech bore no relevance to the outcome of

the analysis, the majority also found it unnecessary to tease out whether all speech hindered by §4631 was commercial, or whether this was an instance where 'pure speech and commercial

speech' were inextricably intertwined, so that 'the entirety must . . . be classified as

noncommercial."' Id. at 2667 (quoting Bd. of Trustees of State Univ. of N.Y. v. Fox, 492 U.S.

469, 474 (1989)).92 Id. at 2669.93 Id.94 Id. at 2669.9s Id. (quoting 2007 Vt. Acts & Resolves, No. 80 § 1(28)). The legislature had also found that,"[s]ome doctors in Vermont are experiencing an undesired increase in the aggressiveness of

VOL. VIII NO. 2148



inadequate basis for upholding such a sweeping content- and speaker-based speech

restriction.96 "Many are those who must endure speech they do not like, but that is a

necessary cost of freedom," offered the majority.97 To the extent physicians found visits

from pharmaceutical detailers distasteful or intrusive, their remedy was simply to refuse

to meet with them.98

The majority's rationale concerning Vermont's medical privacy argument also

led to its conclusion that the regulation utilized an impermissible means for a state to

advance the public policy purpose of containing health care costs and promoting the

public health.99 Vermont's regulation of data mining was both indirect'00 and based

upon a paternalistic view that prescribers make inferior prescribing choices when

exposed to detailing that is informed by prescriber-identified marketing information.10'

The Sorrell majority found that assumption particularly objectionable where the audience

(i.e., physicians and other prescribers) consisted of 'sophisticated and experienced'

consumers." 02 Furthermore, the record indicates that prescribers have conflicting

perspectives about the benefits of detailing; in fact, some even endorsed the use of

pharmaceutical sales representatives and a few have reported that they felt coerced and harassed."2007 Vt. Acts & Resolves 80 § 1(20), available at http://www.1eg.state.vt.us/docs/legdoc.cfm?URL=/ docs/2008/acts/ACT08O.htm.96 Sorrell, 131 S. Ct. at 2669.97 Id. (citing Erznoznik v. City of Jacksonville, 422 U.S. 205, 210-11 (1975); Cohen v. California,403 U.S. 15, 21 (1971)).98 Id. The Court also concluded that Vermont's argument that pharmaceutical companies weremanipulative in their use of prescriber-identifying information and that use of the data thusthreatened the integrity of the physician-patient relationship lacked merit, and could not stand asa basis for trampling on First Amendment values. Id. at 2670 (citing 2007 Vt. Acts & Resolves80, § 1(27)). The majority concluded, "If pharmaceutical marketing affects treatment decisions, itdoes so because doctors find it persuasive . .. he fear that speech might persuade provides nolawful basis for quieting it." Id. (citing Brandenburg v. Ohio, 395 U.S. 444, 447 (1969) (percuriam)).99 Id. ("While Vermont's stated policy goals may be proper, § 4631(d) does not advance them in apermissible way").100 Sorrell, 131 S. Ct. at 2670. As the majority pointed out, Vermont itself seemed reticent toacknowledge the logistical link between prohibiting the sale and use of prescriber-identifiableinformation for marketing and achieving the state's latter two public policy goals. Id. At oralargument, Vermont repeatedly denied that the goal of § 4631 was to make detailing less effectiveand prevent such messages from influencing physicians' prescribing decisions. Id. (citingTranscript of Oral Argument at 5-6, Sorrell v. IMS Health Inc., 131 S. Ct. 2653, 2670 (2011) (No.10-779)).101 Id. at 2670-71 (citing Thompson v. W. States Med. Ctr., 535 U.S. 357, 374 (2002); Virginia Bd.of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 769-70 (1976)).102 Id. at 2671 (quoting Edenfield v. Fane, 507 U.S. 761, 775 (1993)).

2012 149



prescriber-identifiable information in marketing because it allows detailers to tailor their

presentations to pharmaceuticals of interest to the practitioner.103 The federal

government, which appeared before the Court in favor of upholding the regulation, also

disputed Vermont's "unwarranted view that the dangers of [njew drugs outweigh their

benefits to patients." 104

According to the Sorrell majority, the divergence of opinion concerning the

virtues of detailing (with or without prescriber-identified information) and brand-name-

drug marketing would be best resolved through more speech, not less.105 Thus,

Vermont remained free to create its own counter-detailing efforts without attempting to

"hamstring the opposition" by suppressing data miners' or pharmaceutical companies'

speech "in order to tilt public debate in a preferred direction."106 Since Vermont's

purpose was not to claim that its law was necessary to discourage detailing because it

amounted to a form of false or misleading speech not protected by the First

Amendment, the majority concluded that the state's alleged rationale for restricting this

form of commercial speech "turn[ed] on nothing more than a difference of opinion." 07

Thus, Vermont had misappropriated the privacy concept in an effort to rationalize its

disparate treatment toward disfavored speakers and their disfavored speech. 08

Justice Breyer, joined by Justices Ginsburg and Kagan, countered with a

forceful dissent. Citing the seminal 1938 case of United States v. Carolene Products, the

dissent urged that "regulatory legislation affecting ordinary commercial transactions is

103 Id. (noting that some doctors find the information "very helpful").104 Sorrell, 131 S. Ct. at 2671. (citing Brief for United States as Amicus Curiae Supporting

Petitioners at 24 n.4, Sorrell v. IMS Health Inc., 131 S. Ct. 2653, 2670 (2011) (No. 10-779)).105 Id. at 2671 (stating that Vermont can always "express ... [its] view through its own speech"

and attempt to persuade others of its opinion).106 Id. (explaining that "the general rule is that the speaker and the audience, not the government,assess the value of the information presented") (quoting Edenfeld, 507 U.S. at 767 (1993)).107 Id. at 2672 (citing Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 69 (1983); Thompson

v. W. States Med. Ctr., 535 U.S. 357, 376 (2002)). "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." Id. The

Court asserted that "Privacy is a concept too integral to the person and a right too essential tofreedom to allow its manipulation to support just those ideas the government prefers." Id.

108 Sorrell, 131 S. Ct. at 2672. Significantly, the Sorrell Court was sympathetic to the difficulties

Vermont encountered in protecting physicians' private information from unauthorized and

unwanted disclosure. Id. Nevertheless, the Court noted that regulation enacted was ill-suited to

that goal in that it allowed pharmacies, insurers, and other similar entities "broad discretion and

wide latitude" for use of the prescriber-identifiable data, while simultaneously restricting

pharmaceutical companies which would use the same information for marketing purposes. Id.

VOL. VIII NO. 2150



not to be pronounced unconstitutional" merely because it is based "upon some rational

basis within the knowledge and experience of the legislators." 0 9 Breyer rejected the

imposition of heightened scrutiny, considering it inappropriate in Sorrell because it was

applied to "legitimate commercial regulatory objectives." t 0 According to Breyer, the

First Amendment should restrict governments' efforts to limit "core" political speech,

but that "looser constraints" should be applied to commercial speech, particularly that

which is pursuant to a "traditional regulatory program.""' Building upon this

distinction, the dissent thought it essential to adhere to the Court's longstanding

distinction between pure speech, that which furthers First Amendment values in

maintaining a free marketplace for "social, political, esthetic, moral and other ideas and

experiences," and commercial speech, that which "propos[es] a commercial transaction

which occurs in an area traditionaly subject to governmental regulation."112 The dissent would

apply a heightened level of First Amendment scrutiny to social, political, and moral

ideas, but not to commercial speech with legitimate regulatory intent.

Breyer distinguished the promotional speech in Sorrell from the other

commercial speech on the basis that the former has "informational function" under the

Central Hudson rubric, thus triggering only an intermediate level of scrutiny.113 Where, as

here, a substantial governmental interest is advanced by the regulation, Breyer argued

that Vermont met its First Amendment burden pursuant to an intermediate standard of

constitutional scrutiny. 114 Breyer went further, however, suggesting that the Vermont

regulation might be accorded review under an even lesser standard as speech intended to

counteract "misleading or deceptive" advertising.1t5 The vigorous dissent insisted that

the Court should defer to legislative regulatory authority when addressing commercial

speech burdened by a regulation "in less direct ways."" 6

109 Id. at 2675 (quoting United States v. Carolene Products Co., 304 U.S. 144, 152 (1938)) (Breyer, J.,dissenting).110 Id. at 2673.

MI Id. at 2673-74.112 Sorrell, 131 S. Ct. at 2674 (quoting Red Lion Broad. Co. v. FCC, 395 U.S. 367, 390 (1969);

Ohralik v. Ohio State Bar Ass'n., 436 U.S. 447, 455-456 (1978)) (emphasis in original).113 Sorrell, 131 S. Ct. at 2674 (Breyer, J., dissenting); see also Cent. Hudson Gas & Elec. Corp. v.Pub. Serv. Comm'n of N.Y., 447 U.S. 557, 563 (1980) (noting that the nature of the expression

determines the protection available); Bigelow v. Virginia, 421 U.S. 809, 826 (1975) ("The

relationship of speech to the marketplace of products or of services does not make it valueless in

the marketplace of ideas.").114 Sorrell, 131 S. Ct. at 2684 (Breyer, J., dissenting).115 Id. at 2674 (citing 44 Liquormart, Inc v. Rhode Island, 517 U.S. 464, 501 (1996)).116 Id

1512012



Under intermediate scrutiny, Breyer pointed out that the pharmaceutical

industry is already heavily regulated, which substantial regulation reaches the very

promotional activities at issue here.' 17 The content (prescriber-identified data) regulated

by the Vermont law only exists because of government regulation, argued Breyer.118

Thus, to adapt restrictions to comport with the intent of the industry would be

compatible with its regulatory authority. The dissent's irritation was apparent in its

assertion that the Supreme Court had simply "never found that the First Amendment

prohibits the government from restricting the use of information gathered pursuant to a

regulatory mandate . . ."119 Similarly, the dissent insisted that the Supreme Court had

never before applied heightened scrutiny in this type of regulatory matter.120

The dissent also objected to the majority's characterization of "content-based"

and "speaker-based" burdens on speech; the majority had held that the former triggers

heightened scrutiny, whether commercial or not.121 Breyer again emphasized that when the

subject of a regulation is a matter of commercial speech (content-based or speaker-based),the Court has never imposed a heightened level of First Amendment scrutiny.122 "If the

Court means to create constitutional barriers to regulatory rules that might affect the

content of a commercial message, it has embarked upon an unprecedented task - a task

that threatens significant judicial interference with widely accepted regulatory activity."123

Thus Breyer concluded that "content-based" and "speaker-based" labels have no

meaning in the context of commercial speech.124

The dissent urged that the Sorrell majority intimates contempt for a regulation

(concerning prescriber-identified data) that "targets" a specific industry - pharmaceutical

manufacturers.125 Of course, the majority opinion did determine that the primary intent

of the legislation is not aimed at protecting privacy, but instead at restricting unpopular

117 Id. at 2676 (discussing the myriad of regulations already imposed on pharmaceutical drugindustry).118 Id.. at 2676 (Breyer, J., dissenting). Federal law allows certain prescription drugs to be releasedby pharmacists working under a physician. Id. This differs from Vermont, which has specificregulations for pharmacists, and obligates them to maintain their own records of drugs prescribedby doctors. Sorrell, 131 S. Ct. at 2676." Id. at 2677 (emphasis in original).120 Id.121 Id. at 2677 (Breyer, J., dissenting) (emphasis added).'2 Id. (emphasis added).123 Id. at 2678 (Breyer, J., dissenting) (emphasis in original).124 Sorrell, 131 S. Ct. at 2677-78 (discussing how rules that are "content-based" or "speaker-based" should not mean less deference to regulators and legislators).125 See id. at 2678, 2680.

152 VOL. VIII NO. 2



marketing speech of an unpopular industry - an agenda at odds with the Constitution. 126

The dissent pointed out that state regulations often target specific industries, popular or

not, with an agenda important to the state - exactly what was done here. 127 Indeed,

while the majority opposed a regulation targeting a specific industry and unpopular

restraint on content, the dissent supported the Vermont regulation, which it believes

withstands an "intermediate" level of scrutiny and appropriate to restrictions on

commercial speech.128

Applying the usual standard for commercial speech, the dissent would hold that

the Vermont law furthers an important state goal in that it limits the sale and use of

prescriber-identified data by pharmacies and others - a legitimate regulation of a

business practice satisfying First Amendment scrutiny.129 The dissent rejected the

notion that strict or heightened scrutiny is the appropriate standard because the statute is

an "ordinary economic regulatory program[ ]" - "even if that program has a modest

impact upon a firm's ability to shape a commercial message."o30 Pursuant to

intermediate scrutiny, the regulation prohibiting the use of prescriber-identified data for

pharmaceutical marketing has a legitimate relationship to the legislative goals of

preserving prescriber privacy, emphasizing drug safety and effectiveness and, more

poignandy, promoting less costly drugs. 131 Absent the heightened standard, the dissent

126 See id., 131 S. Ct. at 2671-72 (majority opinion) (noting "The State may not burden the speech

of others in order to tilt public debate in a preferred direction").127 Id. at 2678 (Breyer, J., dissenting). Breyer used the following example, "An energy

regulatory... might require the manufacture of home appliances to publicize ways to reduceenergy consumption, while [simultaneously] exempting producers of industrial equipment [fromthe same requirement]." Id.128 See id. at 2663, 2671-72 (majority opinion); Sorrell, 131 S. Ct. at 2673, 2679, 2684-85 (Breyer,J.,dissenting).129 Id. at 2681, 2685 (Breyer, J., dissenting). Breyer added that, "There [was] no obvious equallyeffective, more limited alternative." Id. at 2685.130 Id. at 2675. Breyer suggested that "modest" harm, if any, would result from "the withholdingof information collected through a regulatory program, thereby preventing companies fromshaping a commercial message they believe[d] maximally effective." Id. at 2681. In contrast,Breyer suggested that the legitimate state interests were "substantial where the statutory languagecalled for "protecting the privacy of prescribers . .. ensur[ing] costs are contained . . . through

the promotion of less costly drugs." Id.131 See Sorrell, 131 S. Ct. at 2681-83. The dissent denied that the commercial marketplace forprescriber-identified data "provides a forum where ideas and information flourish" thustriggering heightened First Amendment scrutiny. Id. at 2671 (majority opinion); see id. at 2674-75,2679 (Breyer, J., dissenting). This is a commercial transaction and should be reviewed for FirstAmendment purposes in that light just as would any other regulated industries. Id. at 2673, 2675-76 (Breyer, J., dissenting). Furthering the majority's "marketplace of ideas" concept, which thedissent agrees is at the core of First Amendment protection and a necessary feature of

2012 153



would hold that the Vermont's legislation is a routine regulation of economic activity

with only an "incidental burden" on speech that passes muster as a substantial state

goal.132

III. State Laws Restricting Pharmaceutical Gifts and Meals: Do They Violate the

First Amendment?

To date, the U.S. Supreme Court has not ruled on whether the usual marketing

practices employed by pharmaceutical companies, specifically the giveaways that routinely

accompany detailing and the meals that accompany professional presentations, constitute

protected "speech" under the First Amendment. It is also unclear whether the

intermediate standard of First Amendment scrutiny set forth in Central Hudson for

commercial speech or a "heightened" level of scrutiny set forth in Sorrell v. IMS Health,

Inc. would be applied to state laws restricting pharmaceutical and device company food

and gifts. Whether or not the various state restrictions could withstand scrutiny as

permissible regulation of protected speech may depend upon the level of scrutiny. It is

notable that the legislative purpose of the gift and meals laws are similar to that of

Vermont's Prescription Confidentiality Law, at least in part: to reduce over-reliance on

expensive, brand-name pharmaceutical products. This section examines the law to date

on these issues.

A. The Various Forms of Gifts and Giveaways

The complimentary gifts and giveaways traditionally provided to physicians and

currently the subject of state regulation take several forms. Pharmaceutical companies

routinely market their prescription products by sending detailers to hospitals and

medical offices to describe and discuss their brand-name products with an audience

understood to be in a position to prescribe them. 33 Pens, mugs and prescription pads

that display the sponsor's name or product or logo are similar to gifts routinely given out

in many industries and are understood to advertise the company and/or its product or

service. Whether or not they engender a sense of reciprocity as a gift, they certainly

serve as a reminder to the recipient to use or prescribe or tell one's friends about the

product or service advertised.

A second form of usual pharmaceutical or medical device industry giveaway

democracy, the dissent asserted that the regulation at issue here withstands the appropriate levelof constitutional scrutiny. Id. at 2678 (Breyer, J., dissenting).132 See id. at 2681, 2685.133 See Sorrell, 131 S. Ct. at 2659-60 (describing the "detailing process").

154 VOL. VIII NO. 2



takes the form of events such as local dinners sponsored by industry or expense-paid

travel to Continuing Medical Education programs.134 In both cases the industry funding

the event is also the sponsor of the program and enjoys a substantial advertising

presence. Along the same lines is industry hospitality - social events that include food,

sporting or theatre tickets or other activities hosted and visibly supported by the

sponsor.'13 Certain states, including Massachusetts and Vermont, prohibit health care

practitioners from receiving most of these giveaways at all, and specifically preclude

travel expenses unless the practitioner is a presenter at an educational conference. 136 Do

these gifts of expense-paid travel and hospitality, even when educational (and

presumably combined with industry advertising) constitute protected "speech" for

purposes of the First Amendment? Keeping in mind Sorrell's content- and speaker-

based rationale, note that the same travel sponsored by a computer software company,for example, to showcase its new gadgets would encounter no similar restriction.

The third form of industry giveaway is an invitation to industry-sponsored

"educational" or social events that serve food in a local hotel or restaurant.'37 Under the

Massachusetts and Minnesota laws, the health care practitioner is neither prevented

from attending the lecture nor delivering the lecture; he or she is only prevented from

consuming food at the lecture - food provided by the industry sponsor.138 The

prohibition affects the attendee whether he or she is a speaker or listener. If the event is

purely a social event, or if "hospitality" (e.g., a theatre or sporting event) is involved, the

Massachusetts health care practitioner can participate only if there is a viable opportunity

and a willingness to pay for one's own meal or recreational fare. In part, the operative

inquiry includes whether the consumption of food at such an event is such an integral

part of the gathering that the inability to do so (or fund the activity separately) imposes

such a "chilling effect" on the medical practitioner's enjoyment of the event that it

134 See Ashley Wazana, Physidans and the Pharmaceutical Industry: Is a Gift Ever Just a Gift?, 283 JAMA373, 375 (2000), available at http://jama.ama-assn.org/content/283/3/373.full.pdf (explainingthat when physicians accept all-expenses-paid trips to various educational symposia, it affectsprescribing behavior up to two years later).135 See Pharmaceutical Marketing to Physicians: Free Gifts Cany a High Prce, AM. MED. NEWS (June 10,2002), http://www.ama-assn.org/amednews/2002/06/10/edsaO6lO.htm (arguing thatrestrictions on pharmaceutical marketing are necessary to protect the potential patients' interests).136 See e.g., MASS. GEN. LAWS ch. 111N, 5 2(4) (2009); 18 VT. STAT. ANN. tit. 18, 5 4631A(1)(E)(2011).137 See Wazana, supra note 134, at 378 (stating that many physicians would not attend sucheducational events without the free meals and gifts).138 See MINN. STAT. ANN. § 151.461 (3) (West 2011); MASS. GEN. LAWS ch. 111N, § 2(6) (2009).Whether the Massachusetts law legitimately reaches to events held out of state is another issuebeyond the scope of this article.

2012 155



effectively precludes his or her participation.139

Most health care practitioners acknowledge that pharmaceutical giveaways

including pens, mugs and prescription pads that prominently display the company's

name or logo constitute "advertising" for purpose of the First Amendment. 140

Arguably, the "hospitality" freebies and resort trips that display the name or logo of the

sponsor also constitute advertising. The Vermont law that prohibits pharmaceutical

gifts to health care practitioners would be analyzed under traditional First Amendment

"advertising" rules.141 In general, non-commercial (sometimes called "pure" or

"personal") speech is permissible subject only to reasonable "time, place, and manner"

restrictions that are narrowly tailored to a significant state interest and allow "substantial

other opportunity" for the speech to occur.142 Commercial speech enjoys a lesser level

of constitutional protection in accordance with the four-part test set forth in Central

Hudson.143

139 See Lamont v. Postmaster General, 381 U.S. 301 (1965). Lamont did not focus on a law that

explicitly outlawed speech; there, a "chilling effect" existed even without an explicit prohibition

of speech in the law. Id. at 309; see also Freedman v. State of Maryland, 380 U.S. 51, 61 (1965). In

that case the principle was that the law would have a "deterrent effect" on freedom ofexpression. ILamont, 381 U.S at 307. Thus the concept of "chilling effect" refers to laws that do

not explicitly prohibit protected speech, but impose an undue burden on speech. Id.140 See Natasha Singer, No Mug? Drug Makers Cut Out Goodies For Doctors, N.Y. TIMES (Dec. 30,2008), http://www.nytimes.com/2008/12/31/business/31drug.html?_r=1 (describing drug

companies widely used practice of branded giveaways to make their product known to doctors).

In 1999, a New York physician started "No Free Lunch," a nonprofit group that encourages

doctors to reject drug company giveaways. Id. Note that the "free lunch" could also be viewedmore in the light of a kickback of sorts which, while perhaps independently problematic, isbeyond the scope of this analysis which is limited to speech implications.141 VT. STAT. ANN. tit. 18, § 4632 (2012). Many states only require transparency in the form of

the reporting of such gifts to the state, and although one could argue that reporting is a limitation

on speech, reporting in and of itself is generally not held to be an impermissible limitation on

speech. See Citizens United v. Fed. Elections Comm'n., 130 S. Ct. 876, 914 (2010) (explaining

disclosure may burden the ability to speak but does not completely prevent it).142 See Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, 425 U.S. 748, 771 (1976)(explaining restriction must leave open ample alternative channels for the speech and is justified

without reference to the contents of the speech).143 See Cent. Hudson, 447 U.S. at 561-63. "The Constitution ... accords a lesser protection to

commercial speech than to other constitutionally guaranteed expressions." Id. at 562-63; see also

Va. Citizens Consumer Council, 425 U.S. at 758-61 (acknowledging that past decisions indicated

commercial speech was unprotected).

156 VOL. VIII NO. 2



B. Analysis of the Law on Gifts and Giveaways under Central Hudson'sIntermediate Scrutiny Standard

Under the First Amendment, pure (personal) speech is entitled to the highest

level of constitutional scrutiny. A regulation that burdens pure speech is only upheld if

it advances a compelling state interest. 144 Commercial speech, on the other hand, is

traditionally accorded an "intermediate" level of constitutional scrutiny. 145 In B Ofer '.Youngs Drug Products Corp., the Supreme Court noted three characteristics of "commercial

speech" - the speech is in the form of an advertisement, it is motivated by a speaker's

economic interests, and it references a specific product.'1 To that end, Bolger held that"the combination of all these characteristics" determines whether promotional activities"are properly characterized as commercial speech." 147

The determination of whether the pharmaceutical gift laws constitute "pure

speech" or "commercial speech" or some hybrid could affect the constitutionality of giftlaws since the majority in Sorrell spoke to that distinction in determining the level ofscrutiny that would be applied to a law that burdens protected speech. The fact that the

speech at issue in Sorrell entailed the use of prescriber-identified pharmacy and patient

records for the marketing of pharmaceutical products did not lead the Court to conclude

that it was necessarily commercial speech under the First Amendment.

Prior to Sorrell, the standard generally applied to regulations that attempt to

restrict commercial speech was set forth in the landmark Central Hudson case.148 In

striking down a New York regulation that affected an electric utility by prohibiting

promotional advertising, Central Hudson held that an intermediate standard of scrutinywas the appropriate standard for evaluating the state interest. 149 In so doing it

144 See Brown v. Entm't Merch. Ass'n, 131 S. Ct. 2729, 2738 (2011) (stating a law restricting thecontents of speech must pass strict scrutiny, which requires a compelling state interest that isnarrowly drawn to serve that interest).145 Cent. Hudson, 447 U.S. at 573 (1980) (Blackmun, J., concurring). "I agree with the Court thatthis level of intermediate scrutiny is appropriate for a restraint on commercial speech." Id.146 See Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 66-67 (1983).147 Id. at 67 (emphasis in original).148 Cent. Hudson, 447 U.S. at 565 (outlining four-step analysis for determining if commercialspeech restriction is constitutional); see IMS Health Inc. v. Sorrell, 630 F.3d 263, 275 (2d Cir.2010), affd on other grounds, Sorrell v. IMS Health Inc., 131 S. Ct. 2653, 2667-68 (2011) (applyingthe four step analysis from Central Hudson); IMS Health Inc. v. Ayotte, 550 F.3d 42, 55 (1st Cir.2008), abrogated by Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011) (applying the Central Hudsonanalysis).149 Cent. Hudson, 447 U.S. at 566.

2012 157



established a four-prong test for determining whether the regulation at issue constituted

a valid restriction under the First Amendment.150

Under the first Central Hudson prong, the speech must be lawful and not

misleading.151 Secondly, the government must assert a substantial interest in regulating

the speech.'52 Third, the government's substantial interest must be directly advanced by

the regulation; and fourth, the regulation on commercial speech must be narrowly

tailored to achieve the governmental interest.15 3 Although the majority in Sorrellrejected

the Central Hudson analysis as operative in that case, the dissent relied squarely on Central

Hudson, asking "whether Vermont's regulatory provisions work[ed] harm to First

Amendment interests that [was] disproportionate to their furtherance of legitimate

regulatory objectives."1 54 The Second Circuit Court of Appeals (whose decision was

later affirmed by the Supreme Court) also relied upon the Central Hudson analysis,finding, pursuant to the first prong, the speech being banned (prescriber-identified

medical information) was lawful and not misleading.'5 5 As to the second and third

Central Hudson prongs, however, the Second Circuit concluded that the Vermont

regulations were not narrowly tailored to advance the state's substantial interests in

promoting the public health or containing health care costs to any appreciable extent. 56

In particular, the Second Circuit determined that the chain of events between the

regulation and the state interest was too attenuated to advance such interests. 57 Indeed,the Second Circuit concluded that real purpose of the regulation was to suppress speech

that was both very effective and unpopular - the pharmaceutical industry's ability to

promote and encourage the prescription of brand name drugs.'58 Invoking the concept

of the state putting its "thumb on the scales of the marketplace of ideas in order to

influence conduct," the Second Circuit held that the Vermont regulation failed the third

Central Hudson prong.'59 Finally, as to the fourth Central Hudson prong, the Second

Circuit concluded that the New York regulation was not narrowly tailored because, as

applied, there were other means available to limit the use of the prescriber-identified

patient records and the method chosen affected all brand name drugs - regardless of the

150 Id.15' Id.152 Id.153 Id.154 Sorrell v. IMS Health Inc., 131 S. Ct. 2653, 2673 (2011).'55 IMS Health Inc. v. Sorrell, 630 F.3d 263, 275 (2d Cir. 2010), afd on other grounds, 131 S. Ct.2653 (2011).156 Id. at 276-79.157 Id. at 277.158 Id.

15 Id.

158 VOL. VIII NO. 2



availability of a generic equivalent and the effectiveness of the product. 160

C. Analysis of the Laws on Gifts and Giveaways Under Recent First

Amendment Case Law Including Sorrell

In Brown v. Entertainment Merchants Associationl61 the U.S. Supreme Court in 2011

reviewed the constitutionality of a California law that attempted to restrict the sale or

rental of violent video games to minors.162 The statute at issue would have prevented

minors from purchasing video games that included

'killing, maiming, dismembering, or sexually assaulting an image of a

human being, if those acts are depicted' in a manner that '[a] reasonable

person, considering the game as a whole, would find appeals to a

deviant or morbid interest of minors,' that is 'patently offensive to

prevailing standards in the community as to what is suitable for

minors,' and that 'causes the game, as a whole, to lack serious literary,artistic, political, or scientific value for minors."63

The Supreme Court began its examination of the California regulation byobserving that "as a general matter ... government has no power to restrict expression

because of its message, its ideas, its subject matter or its content."1 64 Noting that "the

First Amendment has permitted restrictions upon the content of speech in few limited

areas" the Court struck down the California law, holding that the video games constitute

content-based "speech" which communicates "social messages."165 Finding that the law

was content-based, the Court further concluded that "it is difficult to distinguish politics

from entertainment and dangerous to try." 66 Unwilling to be persuaded by the

offensive nature of the videos, the Court held that "esthetic and moral judgments about

art and literature . .. are for the individual to make." 67 Holding that the California law

imposed a content-based regulation on protected speech, the Court evaluated the law

using a standard of strict constitutional scrutiny and held that California had not

160 Id. at 279.161 131 S. Ct. 2729 (2011).162 Id. at 2732.163 Id. at 2732-33 (quoting CAL. CIV. CODE § 1746(d)(1)(A) (West 2010)).164 Id. at 2733.165 Id166 Id167 Brown, 131 S. Ct. at 2733 (quoting United States v. Playboy Entertainment Group, 529 U.S.803, 818 (2000)).

2012 159



demonstrated that the law advanced a compelling state interest.168

In 2010, in Cifiiens United v. FEC,169 the U.S. Supreme Court addressed a

dispute over whether a non-profit corporation could show a film critical of a political

candidate and whether the film could be advertised in ads that presented her image in a

manner that was arguably contrary to a federal campaign reform law (the McCain-

Feingold Act).170 In a 5-4 decision, the Court struck down portions of the McCain-

Feingold Act that imposed various restrictions on "electioneering communications." In

particular, the McCain-Feingold Act limited the spending of "soft money" by tax-

exempt political organizations not officially registered as political committees under the

Federal Election Campaign Act ("FECA") which could support candidates by

contributing to political campaigns without complying with the limitations set forth in

FECA.171 Holding that the contributions prohibited by FECA constitute commercial

speech entitled to the protections of the First Amendment, the Supreme Court

overturned that portion of FECA concerning "electioneering communications" as it

related to corporations and unions. 172 The provision had attempted to ban the

broadcast transmission of political ads paid for by corporations in the days immediately

preceding a presidential primary or general election. 173

Citigens United, widely criticized for limiting the government's ability to rein in

corporate political expenditures, may have a significant impact on other forms of heavily

regulated speech such as that which promotes pharmaceutical products. 174 Holding that

an amorphous regulatory scheme that has the effect of suppressing unpopular speech

functions as a "prior restraint," the CitiZens United Court held that a regulation is

168 Id. at 2741.169 130 S. Ct. 876 (2010).170 Id. at 886-87; Bipartisan Campaign Reform (McCain-Feingold) Act of 2002, Pub. L. 107-155,116 Stat. 81.171 Federal Election Campaign Act of 1971, Pub. L. 92-225, 86 Stat. 3 (codified as amended at 2U.S.C. § 431 (1972)).172 See Citizens United v. FEC, 130 S. Ct. 876, 913 (2010).173 Id; see Commonwealth Brands, Inc v. United States, 678 F. Supp. 2d 512 (W.D. Ky. 2010)(invoking the First Amendment to support advertizing regulations in general); Wash. LegalFound. v. Friedman, 13 F. Supp. 2d 51 (D. D.C. 1998), vacated sub nom. Wash. Legal Found. v.Henney, 202 F.3d 331 (First Amendment involved to support marketing activities ofpharmaceutical companies).174 This may include current FDA regulations concerning off-label marketing of pharmaceutical

products. See Decision in Washington Legal Foundation v. Henney, 65 Fed. Reg. 14,286 (Mar.

16, 2000). FDA guidance document noting that the FDA operates to determine on a case-by-case basis to determine whether a manufacturer's written materials and activities are appropriateto a particular product. Id.

VOL. VIII NO. 2160



particularly vulnerable where there is no claim that the speech is untrue or misleading. 75

The local governments' interests in regulating pharmaceutical marketing efforts to

promote the states' public health and fiscal integrity might be held achievable by less

restrictive means. Citizens United sends an ominous signal that the current Supreme

Court harbors an inherent mistrust of governmental regulations that abridge protected

speech.176

Sorrell v. IMS Health, Inc. involved a state law which, like the state gift and meals

laws at issue here, singled out the pharmaceutical industry, specifically its marketing

activities, and concluded that such activities constituted protected "speech" (rather than

conduct) under the First Amendment. 77 The conclusion that data mining activities

constitute speech is more nuanced than the argument that a mug displaying it sponsor's

name constitutes commercial speech. Having made that conceptual leap, however, Sorrell

then declined to impose the intermediate standard of First Amendment analysis set forth

in Central Hudson, determining instead that a heightened level of constitutional scrutiny

was appropriate because the regulation imposed direct (not incidental) speaker-based and

content-based burdens on protected speech (as opposed to conduct) to suppress a

disfavored message contrary to public policy.17 8 Because the majority found that the

Vermont regulation implicated "'[. . .p]ure speech and commercial speech"' [that] were

intertwined, so that 'the entirety must ... be classified as noncommercial,"' it declined to

rely upon the Central Hudson four-prong test applicable to traditional commercial

speech.179

In Sorrell, the Vermont regulation was considered content-based because its

prohibition on the sale and use of prescriber-identified prescription data applied to

pharmacies, health insurers, and other similar entities only for their use in marketing

activities. The regulation was also speaker-based because it allowed purchase and use by

some recipients (such as researchers and public health professionals) but not others

(specifically pharmaceutical companies and their marketing departments). The state's

public policy rationale of containing health care costs and shielding physicians from

harassing behavior was not persuasive.

175 See CiiZens United, 130 S. Ct. at 896.176 See generally Tamara R. Piety, Ciiens United and the Threat to the Regulatory State, 109 MICH. L.REv. 16 (2010).177 Sorrell v. IMS Health, Inc., 131 S. Ct. 2653, 2672 (2011).178 Id. at 2664.179 Id. at 2667 (quoting Bd. of Trustees of State Univ. of N.Y. v. Fox, 492 U.S. 469, 474 (1989)).The Court did, however, go through the exercise of applying the traditional commercial-speechanalysis to conclude that the regulation would not be upheld even under intermediate scrutiny.Id. at 2667-68.

1612012



The "content" regulated by the gifts and meals laws is the provision of a gift or,in Massachusetts, a meal outside of a health care setting and unaccompanied by an

educational presentation. Presumably, the state interest in enacting the meals laws is to

diminish the effectiveness of pharmaceutical promotion of name-brand products when

there is no redeeming educational value. Thus, the Massachusetts law disallows

"content" when it is purely advertising but not when redeemed by an educational

component. Further, the venue of a restaurant is presumed to be a more attractive

delivery implement to communicate the pharmaceutical message.180 Under Sorrel, the

"meals" law would raise the inquiry of whether the venue and educational requirement

are more than a mere "incidental burden on protected expression."' 8 '

In determining whether pharmaceutical gift laws would be held content-based

and discriminatory under Sorrel!, it is notable that they would not prevent a

pharmaceutical company from hosting a dinner for legislators or insurance companies

for the purpose of influencing them. Similarly, the company could host a dinner for

companies that manage pharmacy benefits or health and hospital systems or a plethora

of other services related to pharmaceuticals. The Sorrell language that a regulation

"burdening disfavored speech by disfavored speakers" 182 makes such regulations

suspect, as does Sorrell's admonition that "fear that speech might persuade provides no

lawful basis for quieting it."183 Finally, since it is unclear that the Massachusetts

"restaurant" prohibition actually accomplishes its intended goal, Sorrel! suggests that a

mere "difference of opinion" as to the virtues of advertising brand-name

pharmaceuticals is better addressed through "more speech, not less."18 4

Although the majority in Sorrell opined that the Vermont regulation also would

not have withstood analysis under even an intermediate standard of First Amendment

scrutiny,185 the issue of whether state pharmaceutical gift and meals laws would be

upheld certainly could depend upon the level of constitutional scrutiny applied.

Specifically, the issue might be whether the gift and meals laws, assuming they constitute

180 The final version of the implementing regulations clarifies that Code does not prohibitcompanies from using hotels, convention centers, or other special-event venues for continuingmedical education or other third-party medical meetings. The code says that venues need to be"appropriate and conducive" to education. See Bay State Bans Pharma Gifts to Physicians, MED.

MEETINGS oune 1, 2009, 12:00 PM), http://meetingsnet.com/medicalmeetings/0601-massachusetts-marketing-code/#ixzzlm66gwwRQ.181 Sorrell, 131 S. Ct. at 2664-65.182 Id. at 2669.183 Id. at 2670 (citing Brandenburg v. Ohio, 395 U.S. 444, 447 (1969) (per curiam)).184 Id. at 2671.185 Id. at 2667-68.

VOL. VIII NO. 2162



"speech" at all, would be evaluated under Central Hudson standard applicable to entirely"commercial speech" or under Sorrells "heightened" scrutiny - a hybrid of "pure" and

"commercial" speech.

D. Do the State Laws on Gifts and Giveaways Satisfy Either the Central

Hudson or Sorrell First Amendment Criteria?

In 44 Liquormart, Inc. v. Rhode Island,186 the U.S. Supreme Court invalidated a

Rhode Island law that prohibited the advertisement of alcoholic beverage prices in

places other than those establishments where alcohol was sold.'87 Rhode Island's stated

interest was in reducing alcohol consumption.88 Finding that the advertisements

constitute "speech" and relying upon Central Hudson, the Court declared the ban

unconstitutional on the basis that the state had not established that the regulation would

directly further the asserted state interest and was not narrowly tailored to accomplish

that objective.' 89 Among the issues discussed by the Court was whether an increase in

alcohol advertisements would lead to an increase in alcohol sales (public policy

disfavored by the state), or would simply increase competition among sellers (public

policy favored by the state).190

Assuming that a court would find that the state gift and meals laws burden

some form of speech, the next issue would be whether, under the lesser intermediate

scrutiny, the restrictions advance at least a substantial state interest that is narrowly

tailored to advance that interest. Since any law restricting speech is said to have a"chilling effect" on that speech, the state interest must be considered at least"substantial." This is a determination that requires empirical data. In Florida Bar v. Went

For It, Inc.,' 9' the U.S. Supreme Court upheld a Florida regulation limiting the ability of

186 517 U.S. 484 (1996).187 Id. at 516.188 Id. at 504 n.14.189 Id. at 505-08.190 Id. at 506 n.16. On the other hand, in Missouri v. American Blast Fax, Inc., the Eighth CircuitCourt of Appeals upheld a federal law that restricted the ability of marketers to send unsolicited"blast faxes" that contained advertisements. 323 F.3d 649, 660 (8th Cir. 2003). The faxesimposed unwanted costs on the recipient, however minimal, to receive the advertisement. Id. at657. In upholding the law, the Eighth Circuit concluded that the federal government had alegitimate interest in sparing taxpayers that was substantial enough to overcome any FirstAmendment right of the advertisers to communicate their messages. Id. at 660; see also JoshuaWeiss, Note, Medical Marketing in the United States: A Prescrition for Reform, 79 GEO. WASH. L. REV.260, 280 (2010).191 515 U.S. 618 (1995).

2012 163



lawyers to solicit clients. 192 The Court specifically noted that the state law was supported

by extensive evidence, both empirical and anecdotal, commenting that the presence of

empirical evidence was a significant factor in being able to support both the claims of a

chilling effect and that of a substantial state interest,193 Even the dissent, which would

have struck down the statute, focused upon the importance of being able to document

the rationale for the state's claim.194 Indeed, Justice Kennedy, who authored the

dissenting opinion, concluded that the state had not met its burden because the empirical

evidence was not necessarily reliable in that it had not been published in peer-reviewed

publications and there was not sufficient information on the methodology of the data

collection.195

If, for example, the data were to show that medical practitioners from

Massachusetts and Minnesota do not attend some medical conferences, or attend in

significantly smaller numbers, it may be possible to demonstrate empirically that the

state laws "chill" protected speech. If a court were to so find, the final analysis would be

whether the effect is either an incidental burden or permissible under the applicable

standard for constitutional scrutiny. The fact that "free food" attracts people to various

gatherings may not, in and of itself, be dispositive on the issue of whether the inability to

consume food necessarily "chills" the opportunity to attend these gatherings.

The Massachusetts and Minnesota regulations that may present the greatest

obstacles to pharmaceutical promotional activities concern the provision of food or

meals at presentations sponsored by industry and showcase uses of their new products.

Note that in Massachusetts the law only prohibits health care practitioners from

consuming food at a conference sponsored by a pharmaceutical company.196 Thus the

192 Id. at 635. The substantial interest stated in this case was to protect state residents from

invasive conduct by lawyers and to prevent the erosion of confidence in the legal profession. Id.

Florida's law, a "30-day restriction on targeted direct-mail solicitation of accident victims and

their relatives," was narrowly tailored to that interest in both scope and duration. Id.193 Id. at 626-29 (focusing on the state's anecdotal and empirical evidence in concluding that the

second prong of the CentralHudson test was met).194 Id. at 640-41 (Kennedy, J., dissenting).'9 Florida Bar, 515 U.S. at 640-41; cf Edenfield v. Fane, 507 U.S. 761, 770-71 (1993). In Edenfield,

the Supreme Court invalidated Florida's ban on certified public accountants from direct, in-

person, uninvited solicitation. Edenield, 507 U.S. at 761. In holding that the ban violated the

First Amendment, the Court relied in part on the fact that the asserted harm, which was to

protect consumers from fraud and maintain Certified Public Accountant independence, was not

validated by studies or anecdotal evidence. Id. at 761-62.196 See MASS. GEN. LAWS ch.111N, § 2 (2009); 105 MASS. CODE REGS. 970.000 (2011)(encompassing Massachusetts's pharmaceutical and medical device manufacturer's marketingcode of conduct). Section 2(1) prohibits:

164 VOL. VIII NO. 2



provision of food at the same conference, if sponsored by the local medical society, for

example, would not be prohibited.'97 Similarly, the laws prohibiting the "gift" of travel

from the pharmaceutical or medical device company to attend a continuing education

program would not be prohibited if offered by any commercial enterprise other than

one selling pharmaceutical products or medical devices.' 98 A company selling any other

type of widget can fund a demonstration of its products anywhere in the world and issue

an expense-paid trip for potential buyers to attend.

Under either First Amendment standard, content-based regulations generally

trigger strict scrutiny, whether or not the speech is considered commercial." 99 A

regulation is considered content-based if it permits a message that the government

favors but not one that it disfavors. The seminal case is Boos v. Bany,200 in which the

U.S. Supreme Court struck down a District of Columbia regulation that prohibited the

placement of a sign within 500 feet of a foreign embassy if the content of the sign

brought the foreign government into odium or disrepute, but not if the content of the

sign was favorable to the foreign government.201 The Court held that the District of

Columbia regulation was content-based and would only be upheld if it were found to

advance a compelling state interest, which it declined to find.202

The challenge for the Massachusetts law is to determine whether the

[TMhe provision of or payment for meals for health care practitioners that: (a)

are part of an entertainment or recreational event; (b) are offered without an

informational presentation made by pharmaceutical marketing agent or

without the pharmaceutical marketing agent being present; (c) are offered,

consumed, or provided outside of the health care practitioner's office or

hospital setting ....

MAss. GEN. LAWs ch. 111N 5 2(1)(a)-(c); see also 105 MASS CODE REGS. 970.006.197 See MASS GEN. LAWS ch. 11 1N ( 2(l)(a)-(c); 105 MASS CODE REGS. 970.006.198 See MASS. GEN. LAWS ch. 11 1N § 2(4); 105 MASS CODE REGS. 970.007. Section 2(4) prohibits

"financial support for the costs of travel, lodging or other personal expenses of non-faculty

health care practitioners attending any CME event, third-party scientific or educationalconference, or professional meetings, either directly to the individuals participating in the event

or indirectly to the event's sponsor. . . ." MASS. GEN. LAWS ch. 111N § 2(4). The U.S. Supreme

Court has held that 'the basic principles of freedom of speech . .. do not vary' when a new anddifferent medium for communication appears." Brown v. Entertainment Merchants Ass'n, 131

S. Ct. 2729, 2733 (2011).199 Sorrell v. IMS Health, Inc., 131 S. Ct. 2653, 2677 (2011) (Breyer, J., dissenting).200 485 U.S. 312 (1988).201 Id. at 316, 334.202 Id. at 318-29.

1652012



promotional activities in question (gifts of travel and hospitality as well as meals

provided at events outside of a medical or hospital setting) constitute "speech" at all

under the First Amendment and, if so, whether the regulation of them is "content-

based." 203 As in Sorrell, the objectionable content in the state gifts and meals laws is the

marketing message that solicits physicians to prescribe new and expensive name-brand

drugs without regard to whether they are the best product for the patients and whether

or not a generic equivalent is available.

A Central Hudson analysis might proceed as follows: Under the first prong,would a state gift and meals statute be considered to be lawful and not misleading? The

Vermont regulation failed this prong because it purported to protect the state's interest

in medical privacy but instead was designed to contain the effectiveness of particular

pharmaceutical markets tactics. 204 Applying this analysis to state gift and meals laws, the

very title of the Massachusetts Act, for example, describes the asserted state interest as

"an act to promote cost containment, transparency and efficiency in the delivery of

quality health care." 205 Under the first Central Hudson prong, the state interest, as

articulated, would appear to be lawful and not misleading. Like Sorrell, however, the

state laws in question specifically target the pharmaceutical industry and might be held to

suppress speech that delivers an unpopular message and is too successful in

accomplishing its intended goal - promoting name brand pharmaceuticals instead of

generic drugs, and promoting the use of pharmaceuticals under circumstances where no

drugs otherwise might have been prescribed.206

Under the second Central Hudson prong, the next question would be whether the

substantial state interest asserted is directly advanced by the state regulation. Evaluating

Massachusetts' asserted interest in promoting cost containment, transparency and

203 If gifts and meals are found to constitute speech, the next inquiry would be whether they

qualify as "pure speech" (as in an individual expressing a viewpoint about a particular subject that

is not otherwise prohibited) or "commercial speech" (as in a company advertising or promoting

its product). In general, a regulation that burdens pure speech is analyzed under the First

Amendment using a standard of strict scrutiny; if the regulation is found to burden commercial

speech, the standard is generally one of intermediate scrutiny. See Cent. Hudson Gas & Elec.

Corp. v. Public Serv. Comm'n. of N.Y., 447 U.S. 557, 562-65 (1980). Under the Sorrell rubric,however, a regulation that burdens commercial speech that is inextricably interwoven with purespeech triggers the "heightened scrutiny" that may have tipped the balance in Sorrell. See Sorrell,131 S. Ct. at 2667.204 Id. at 2663-64 (2011).205 An Act to Promote Cost Containment, Transparency and Efficiency in the Delivery and

Quality of Health Care, ch. 305, 2008 Mass. Acts 1322 (2008).206 See Sorrel, 564 U.S. at 2670-71; Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm. of

N.Y., 447 U.S. 557, 562-63 (1980).

VOL. VIII NO. 2166



efficiency in the delivery of quality health care (and assuming that a court finds that the

gift laws satisfy the first Central Hudson prong), there is likely to be ample evidence that

this criteria could be met. The ills created by pharmaceutical gifts and giveaways to

prescribers, both in terms of cost and influence, are extremely well-documented in peer-

reviewed literature207 as well as in the Congressional Record. 208

Under the third Central Hudson prong, the state's substantial interest must be

directly advanced by the regulation of speech. As in Sorrell, there is substantial room for

debate on this issue. In particular, the question is whether cost and quality of health care

is improved by prohibiting many (but not all) of the pharmaceutical giveaways and

restrictions. 209 Does allowing Massachusetts physicians to consume industry-sponsored

food at a presentation at the physician's office or hospital but not at the restaurant

across the street promote cost containment and improved quality of health care? Does a

prohibiting Massachusetts physician from attending social events sponsored by the

pharmaceutical industry while recognizing that physicians from neighboring Connecticut

will attend accomplish the asserted Massachusetts goal?210 The answers to these

questions may depend more upon the ability of each party to marshal compelling

evidence and tailor persuasive arguments. In Florida Bar, both the majority and dissent

focused on the presence or absence of evidence, both empirical and anecdotal, as a

determining factor in whether the state would meet its burden of demonstrating that the

law furthered a substantial state interest.211

207 See Marcia M. Boumil & Harris A. Berman, supra note 22 at 7-14; Lance K. Shell, Drug Reps OffCampus! Promoting Professional Purity by Suppressing Commerdal Speech 37 J.L. MED. & ETHICS 431,439-40 (2009) (part of symposium entitled Dangerous Liaisons? Industy Relations with Health

Professionals); Troyen A. Brennan et al., Health Industy Practices that Create Conflicts of Interest: A Policy

Proposal for Academic Medical Centers, 295 JAMA 429, 429-33 (2006); Jason Dana & George

Lowenstein, A Social Science Perspective on Gifts to Physicians from IndustU, 290 JAMA 252, 253-55

(2003). See generally ASS'N OF AM. MED. COLLEGES, SCIENTIFIC BASIS OF INFLUENCE AND

RECIPROCITY: A SYMPosIUM (2007), available at http://www.ohsu.edu/xd/about/services/

integrity/coi/gifts/upload/AAMC-The-Science-of-Influence.pdf (symposium report "designed

to explore the challenges to objectivity that are presented by gifts, favors, and influence").208 See SuHqeons for Sale: Conflicts and Consultant Payment in the Medical Device Industg: Hearing Before the

Special Comm. on Aging, 110th Cong. 2 (2008) available at http://aging.senate.gov/

publications/2272008.pdf (explaining the prevalence and problems of gifts to physicians); 155

CONG. REC. S788 (daily ed. Jan. 22, 2009) (statement of Sen. George Voinovich) (detailing therelationship between physicians and pharmaceutical companies as relates to drug and device

marketing and prescribing).209 See Sorrell v. IMS Health Inc., 564 U.S. 2653, 2658 (2011).210 This assumes that industry does not make available the option of paying for the event

separately or that the burden of doing so effectively "chills" participation in the event.211 Florida Bar v. Went For It, Inc., 515 U.S. 618, 626-29 (1995).

1672012



Finally, under the fourth Central Hudson prong, the state regulation on

commercial speech must be narrowly tailored to achieve the state interest. Are the

various restrictions imposed by state gift and meals laws narrowly tailored to the

substantial state interest? In Board of Trustees v. Fox, 212 the U.S. Supreme Court upheld a

regulation of a state university prohibiting commercial demonstrations in its

dormitories. 213 In that case, the students organized a "Tupperware party" that involved

commercial transactions but arguably also advanced an educational objective. 214 The

Court took the opportunity to define what it considered to be a "narrowly tailored"

restriction: one that is "no[] more extensive than necessary" but not necessarily one that

meets the more exacting standard of a "least-restrictive-means." 215 Similarly, in Thompson

v. Western States Medical Center,216 the U.S. Supreme Court applied the Central Hudson

analysis in a case where a federal statute permitted pharmacists, pharmacies and

physicians to advertise "compounding service[s]" but prohibited them from advertising

the actual compounded drug.217 Holding the federal restriction to be unconstitutional,the Court concluded that the regulation could not satisfy the fourth Central Hudson prong

because it was not sufficiently narrowly tailored - burdening as little speech as

necessary.218 So stated the Court, "[i]f the First Amendment means anything, it means

that regulating speech must be a last - not first - resort." 219

Under the more rigorous Sorrell rubric, the Massachusetts and Minnesota laws

would likely be found to be content-based because they permit attendance at a

conference sponsored by a pharmaceutical company with food if the content of the

presentation is something other than promotion of drug products. For example, if the

content of the lecture were a non-marketing discussion about the company's

philanthropic endeavors in a third-world country, or research efforts concerning orphan

drugs - but not a discussion of its new name brand drugs - attendance at the conference

and food would likely be permitted. The laws would also likely permit a pharmaceutical

company to hold a conference with food if, for example, it sought to market a new

software product that assists health care practitioners in organizing their medication

formularies to prevent medication errors. On the other hand, a court could consider the

laws to be content-neutral in that they allow any of these presentations to be delivered in

212 492 U.S. 469 (1989).213 Id. at 486.214 Id. at 472.215 Id. at 480-81.216 535 U.S. 357 (2002).217 Id. at 364-65. The regulation specifically banned "advertis[ing] and promot[ing] thecompounding of any particular drug." Id. at 365.218 Id. at 377.219 Id. at 373.

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a medical office or hospital with food - regulating only the place of the presentation. As

such the regulations could be viewed merely as a reasonable time, place, or manner

regulation of otherwise content-neutral laws, arguably constitutional since there is

substantial other opportunity for the speech to occur.220

Under the Sorrell framework, the Massachusetts and Minnesota laws could also

be found to be speaker-based in that they allow the health care practitioner to attend

marketing events and consume food or receive giveaways from any vendors other than

those who market pharmaceuticals. A company selling physicians widgets-perhaps

medical billing software to make their offices more efficient, or services for investing

their money or insurance products for their office staff-could market with food. And

what would the laws in Massachusetts and Minnesota say if it were a pharmaceutical

company that developed a wing devoted to offering these collateral products? The

Massachusetts law specifically targets those who are engaged in "the marketing of

prescription drugs or medical devices," thus exempting any unrelated marketing

activities. 221 Finally, a court might consider the law speaker-based since the same

presentation can be delivered by any other speaker (not connected to the

pharmaceuticals) in any location, with food, as long as it is fully divorced from the

pharmaceutical or medical devices industry's marketing efforts.

IV. Conclusion: Do State Gift and Meals Laws Violate the First Amendment?

Certainly there are legitimate, credible, and even compelling arguments that

highlight the ills that are a direct result of the marketing giveaways that are a hallmark of

the pharmaceutical and medical device industry, including the so-called "free lunch."

There is ample, convincing evidence that pharmaceutical marketing strategies result in

drug choices influenced by factors other than the well-being of patients. The literature is

so vast and the anecdotes so numerous that all of the major medical, academic and even

the pharmaceutical trade organization, PhRMA, have taken steps to control them. 222

Nevertheless, First Amendment protections cannot be ignored to accomplish an end

that is inimical to the Constitution.

The Supreme Court's guidance in Sorrell suggests that if a state law implicates

220 See Va. State Bd. of Pharmacy v. Va. Citizens' Council, Inc., 425 U.S. 748, 771 (1976)(explaining time, place, and manner regulations that leave open ample other channels may be

constitutional).221 MASS. GEN. LAWS ch. 111N, 5 1 (2010) (defining "[p]harmaceutical or medical device

marketer").222 See supra note 207.

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both content- and speaker-based burdens on speech, a heightened level of First

Amendment scrutiny will be applied even to commercial speech pursuant to a state

regulatory program. Like the Vermont data mining regulation, the pharmaceutical gift

laws target a single industry. In Sorrell, the majority's conclusion that the Vermont

regulation amounted to a content-based burden on speech was based upon the Court's

determination that the law prohibited only that speech disfavored by the state - the

promotion of brand name drugs - while not addressing or prohibiting speech that

favored or encouraged the use of generic drugs. As to the Sorrell majority's conclusion

that the Vermont regulation was "speaker-based," it cited the fact that the regulation

only prohibited pharmaceutical companies from obtaining and using the prescriber-

identified data; those who would obtain it for research and other purposes favored by

the state would continue to be entitled access. A similar argument should be expected

by those challenging the gift and meals laws.

The pharmaceutical companies' pens and mugs would appear to be products of

advertisement, displaying a company name, product, or logo. It would be difficult to

deny that these are implements of commercial speech. Thus, they would likely be

reviewed under the Central Hudson four-prong analysis and the state interest in denying

their distribution would have to be at least substantial. This may be a difficult burden to

meet.

The state laws restricting giveaways and some meals could be found to be

content-based in that they only prohibit some activities of the pharmaceutical and

medical device companies, but not others. The fact the Massachusetts law applies to the

"activities or other marketing of prescription drugs or medical devices" 223 but does not

apply to other commercial or even charitable endeavors or products of a pharmaceutical

or medical device company will make it vulnerable. The pharmaceutical company that

chooses to open a new division to improve the efficiency of a health care practitioner's

billing or formulary operation presumably could market that division with a full

complement of gifts, giveaways or food at its promotional events. A law is content-

based if it only prohibits some messages of the speaker and not others.

The laws imposing restrictions on gifts and meals, analyzed under Sorrell, could

be held as speaker-based in that they only apply when it is a representative of a

pharmaceutical company who is delivering the speech. That is, the regulations are

industry-specific, applying only to speakers in the pharmaceutical industry and not to a

3 See MASS. GEN. LAWS ch. 111 N, § 1 (2010) (defining "[p]harmaceutical or medical devicemarketer").

170 VOL. VIII NO. 2



speaker other than one who is engaged by the pharmaceutical industry. Would a

shareholder of the company also be prohibited from delivering such a speech?

Furthermore, once a law is held to be content-based, it is unclear that the speaker

increases its vulnerability.

A state law that burdens commercial speech will only be upheld if it promotes at

least a "substantial" state interest and is narrowly tailored to that interest. The

significance of the interest and the tailoring of the interest are measured in First

Amendment terms and it is not enough that the interest is well-documented or

considered very important as a matter of state policy. In the 1976 case of Virginia State

Board of Pharmacy P. Virginia Citia.ens' Council, Inc,224 the U.S. Supreme Court invalidated a

Virginia law that forbade pharmacies from advertising the prices of their drugs. The

Court held that advertisements constituted commercial speech, which could be regulated

through content-neutral time, place and manner regulations. 225 However, to be upheld,the advertisement would have to advance a "substantial" state interest and must burden

no more speech than necessary to achieve the state's interest. 226 In striking down the

law the Court held that although the Virginia statute did articulate a substantial state

interest in regulating the pharmacy profession, the statute promoted consumer

ignorance, effectively preventing them from ascertaining prescription drug prices.227

Significantly increasing the odds of a successful challenge to state gift laws is the

Sorrell Court's application of "heightened" scrutiny for commercial speech inextricably

interwoven with pure speech. If applied, it would require more than a "substantial"

state interest, and indeed one that may be nearly indistinguishable from a "compelling"

interest. While the absence of the buzz-word "compelling" is notable in Sorrell, the

Supreme Court's literal interpretation (including the idea that the law might contain both

"pure speech" and "commercial speech") would impose a very high bar for state gift and

meals laws that are found to burden both pure speech and commercial speech or some

hybrid variety of speech.

Sorrell is not the first case in which the U.S. Supreme Court has held that

commercial speech can be interwoven with pure speech thus triggering more than an

intermediate level of constitutional scrutiny. In Rily v. National Federation of the Blind of

224 Va. State Bd. of Pharmacy v. Va. Citizens' Council, Inc., 425 U.S. 748 (1976).225 Id. at 770-71.226 See Aaron S. Kesselheim, & Jerry Avorn, Pharmaceutical Promotion to Physicians and First

Amendment Rights, 358 NEw ENG. J. MED 1727, 1728-29 (2008).227 Va. Bd. of Pharmacy, 425 U.S. 748 (1976). This case preceded Central Hudson and hence was

not reviewed under its four-prong test. See id.

2012 171



North Carolina, Inc.,228 the U.S. Supreme Court struck down a North Carolina law that

required professional fundraisers to report to potential donors the percentage of the

charitable revenue that actually ended up with the charity after deducting the expenses

of the fundraising.229 While recognizing that the solicitation itself involved primarily

commercial speech, the Court nevertheless imposed strict scrutiny on the basis that the

North Carolina statute was content-based: "mandating speech that a speaker would not

otherwise make necessarily alters the content of speech." 230 Finding that "pure speech"

and "commercial speech" were intertwined, the Court imposed a heightened level of

constitutional scrutiny-strict scrutiny in that case-and required a compelling state

interest that was narrowly tailored to accomplish the state's goals. 231 The North

Carolina regulation was unable to meet that burden.232

Should that very rigorous Sorrell or even Riley standard be imposed on state

pharmaceutical gift and meals laws on the basis that they are both content-based and

speaker-based, it may be difficult to craft a policy argument that can sustain the burden

of evincing a nearly "compelling" state interest. Outside of the civil rights context,marshaling a First Amendment argument demonstrating a compelling state interest is

rarely accomplished. Thus despite the influence of pharmaceutical marketing practices,restrictions on gifts, giveaways, and meals may still elude substantial regulation after

Sorrell.

228 487 U.S. 781 (1988).229 Id. at 798. The law required that the fundraisers disclose the percentage of gross revenue thatwas turned over to the charity within the past twelve months. See N.C. GEN. STAT. § 131C-16.1(1986) invalidated by Riley v. National Federation of the Blind of North Carolina, Inc., 487 U.S.781 (1988).230 Riley, 487 U.S. at 795.231 Id. at 796.232 Id. at.798.

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Pharmaceutical Gift Laws and Commercial Speech Under the First

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