Caseflicks

Supreme Court of the United States • 1976

Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc.

425 U.S. 748 | 96 S. Ct. 1817 | 48 L. Ed. 2d 346 | 1976 U.S. LEXIS 55

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Takeaway

In short, this case established that truthful advertising about lawful products and prices is protected commercial speech, and a State cannot suppress it simply to keep consumers from acting on the information.

Background

Virginia made it “unprofessional conduct” for a licensed pharmacist to publish, advertise, or promote the price, discount, rebate, or credit terms for prescription drugs. Because only licensed pharmacists could dispense prescription drugs, the provision effectively barred ordinary advertising of prescription-drug prices. The statute did not bar pharmacists from quoting a price when a consumer called or asked directly, but it prevented public dissemination of price information.

The plaintiffs were prescription-drug consumers: an individual who regularly needed medication and consumer and labor organizations with members who used prescription drugs. They alleged that prices for identical prescription drugs varied drastically among pharmacies and that the ban deprived consumers—especially poor, sick, and elderly consumers—of information needed to find affordable medication. The parties stipulated that, absent the statute, some Virginia pharmacies would advertise prescription-drug prices.

A three-judge federal district court held the advertising ban unconstitutional under the First and Fourteenth Amendments, declared it void, and enjoined the Virginia State Board of Pharmacy from enforcing it. The Supreme Court noted probable jurisdiction and affirmed.

Issues

Issue #1

Whether prescription-drug consumers may assert a First Amendment right to receive pharmacists’ price advertising.

Holding

Yes. Where willing speakers exist, the First Amendment protects the communication for both its source and its intended recipients.

Reasoning

The Court treated the plaintiffs’ claim as one involving the right to receive information, not merely an effort to assert pharmacists’ rights. First Amendment doctrine protects the reciprocal interests of speakers and listeners: freedom of speech necessarily includes a right to receive information and ideas when someone wishes to communicate them.

Willing speakers existed because the parties stipulated that some pharmacies would advertise prescription-drug prices if Virginia’s prohibition were lifted. The consumers therefore could challenge the restriction even though they were not themselves pharmacists.

The fact that consumers could obtain prices by calling or visiting pharmacies did not eliminate their First Amendment interest. The Court rejected the idea that government may suppress a speaker’s message simply because listeners could seek out the same information through more burdensome means.

Issue #2

Whether truthful commercial speech that proposes a lawful commercial transaction is wholly outside First Amendment protection.

Holding

No. Truthful commercial speech is protected by the First Amendment, although it may receive a different degree of protection from political or ideological expression.

Reasoning

The Court repudiated the broad proposition from Valentine v. Chrestensen that “purely commercial advertising” receives no First Amendment protection. Later decisions, especially Bigelow v. Virginia, had already undermined that categorical exclusion by recognizing that advertising can convey valuable factual information.

A commercial message does not lose constitutional value simply because the advertiser has an economic motive or because the message proposes a transaction. Economic interests have long coexisted with First Amendment protection in contexts such as labor disputes, solicitation, paid publications, and profit-making media.

Consumers have a substantial interest in price information. For people who rely on prescription drugs, especially the poor, the sick, and the elderly, knowing where identical drugs cost less may determine whether they can afford medicine or other basic necessities.

The public also has an interest in the free flow of commercial information. In a predominantly free-enterprise economy, consumers’ informed choices about products, sellers, and prices help allocate resources and also inform public debate about how the market should be regulated.

Commercial speech is not identical to ideological speech. Its factual claims are ordinarily more readily verifiable by the seller, and advertising is durable because it is closely linked to profit. Those features may justify more regulation of commercial speech than of political expression, but they do not justify treating truthful commercial speech as entirely unprotected.

Issue #3

Whether Virginia may completely prohibit pharmacists from advertising truthful prices for lawful prescription drugs in order to preserve professionalism and protect consumers.

Holding

No. Virginia may regulate pharmacy practice and prevent deceptive advertising, but it may not completely suppress truthful price information about lawful transactions on the paternalistic premise that consumers are better off uninformed.

Reasoning

Virginia had a legitimate and substantial interest in professional pharmacy standards, including safe dispensing, proper handling of drugs, and competent pharmaceutical advice. But its extensive licensing and disciplinary system directly addressed professional misconduct and weakened the claim that a total price-advertising ban was necessary to protect consumers.

The asserted harms from price advertising depended on withholding information from consumers. Virginia feared that consumers would choose lower-priced pharmacies, that price competition would reduce service quality or weaken ongoing pharmacist-customer relationships, and that advertising would diminish the profession’s status. The Court regarded this as a paternalistic argument that consumers should be kept ignorant of lawful market terms for their own good.

The First Amendment resolves the choice between the risks of suppressing information and the risks that consumers may make unwise use of it in favor of open communication. A pharmacist offering higher-quality service remained free to explain and promote that service; the State could not protect that pharmacist from competition by concealing competitors’ prices.

The decision did not invalidate all commercial-speech regulation. States may impose valid time, place, and manner rules, regulate false, misleading, or deceptive advertisements, require appropriate disclosures or warnings, and prohibit advertisements for unlawful transactions. But Virginia’s law was a content-based, complete suppression of concededly truthful information about lawful activity, and therefore could not stand.

Concurrences

Chief Justice Burger

Reasoning

Chief Justice Burger emphasized the limited setting of the case. Because roughly 95% of prescriptions were filled with manufacturer-prepared dosage units, the decision principally concerned pharmacists’ advertising of the retail prices of standardized, prepackaged products rather than advertising of individualized professional judgment.

He cautioned that the result did not necessarily govern lawyers’ or physicians’ advertising. Legal and medical services involve highly individualized professional judgments, and price or quality claims may be inherently harder for consumers to evaluate and more likely to mislead. States therefore could have a stronger regulatory interest in those learned professions than in the retail sale of standardized drugs.

Justice Stewart

Reasoning

Justice Stewart agreed that the Court should end the anomalous rule that commercial speech was wholly unprotected. He wrote separately to explain why recognizing protection for commercial advertising did not disable government from regulating false or deceptive advertising.

In his view, the central constitutional value in commercial price and product advertising is the dissemination of accurate information about identifiable goods and services. Unlike participants in political debate or journalists working under deadline, advertisers generally know their own products and prices and can verify their factual representations before speaking.

Because commercial claims are empirically testable, regulation targeting falsity or deception ordinarily does not threaten the robust exchange of ideas protected at the First Amendment’s core. Indeed, removing deceptive claims promotes the accurate flow of commercial information that justifies constitutional protection in the first place.

Dissents

Justice Rehnquist

Reasoning

Justice Rehnquist disputed the consumers’ standing. The statute did not stop them from obtaining a drug price by telephone or in person, and it did not prevent consumer organizations from collecting and publishing comparative price data themselves. In his view, the plaintiffs were effectively asserting absent pharmacists’ rights to advertise, even though pharmacists had not joined the case and might prefer the ban.

He objected to extending First Amendment protection to ordinary commercial interchange between sellers and buyers. The majority’s policy preference for informed consumer choice, he argued, was not a constitutional command requiring Virginia to adopt free-market principles rather than the legislature’s judgment about professional regulation and public welfare.

He believed the majority’s distinction between truthful speech and false or misleading speech was too rigid. Legislatures could reasonably consider broader concerns, including the risk that promotional advertising of prescription drugs would encourage patient pressure on doctors, improper demand, or drug misuse even when an advertisement was literally true.

Justice Rehnquist warned that the decision’s logic would reach far beyond drug-price advertising, affecting advertising by doctors, lawyers, and sellers of products such as alcohol and cigarettes. He would have deferred to Virginia’s considered judgment that restricting promotion of prescription drugs served the public interest.