Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc.
1976 U.S. LEXIS 55, 425 U.S. 748, 48 L. Ed. 2d 346 (1976)
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Rule of Law:
A state may not completely suppress the dissemination of truthful information about an entirely lawful activity, as speech that does no more than propose a commercial transaction is not wholly outside the protection of the First Amendment.
Facts:
- Virginia law designated the practice of pharmacy as a professional practice subject to regulation by the Virginia State Board of Pharmacy.
- A Virginia statute defined it as unprofessional conduct for any licensed pharmacist to publish, advertise, or promote the price, discount, or credit terms for any prescription drug.
- Because only licensed pharmacists could dispense prescription drugs in Virginia, this statute operated as a complete ban on the advertisement of prescription drug prices to the public.
- The plaintiffs included an individual consumer who required daily prescription drugs and two non-profit consumer advocacy organizations.
- There were wide, stipulated variations in the prices of the same prescription drugs at different pharmacies, with one drug varying in price by as much as 650% in the same geographic area.
- The plaintiffs, particularly the elderly, sick, and low-income consumers they represented, argued that access to price information was essential to making informed economic decisions about their health care.
- It was stipulated that, in the absence of the statutory ban, some Virginia pharmacies would advertise their prescription drug prices.
Procedural Posture:
- The Virginia Citizens Consumer Council, Inc., and other consumers filed suit against the Virginia State Board of Pharmacy in the U.S. District Court for the Eastern District of Virginia.
- Plaintiffs sought a declaratory judgment that the Virginia statute banning prescription drug price advertising was unconstitutional and an injunction against its enforcement.
- A three-judge panel of the District Court was convened to hear the case.
- The District Court declared the challenged portion of the statute void and granted the plaintiffs' request for an injunction, prohibiting the Board from enforcing the ban.
- The Virginia State Board of Pharmacy, as the defendant-appellant, appealed the District Court's decision directly to the Supreme Court of the United States.
- The Supreme Court noted probable jurisdiction to hear the appeal.
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Issue:
Does a Virginia statute that declares it unprofessional conduct for a licensed pharmacist to advertise the prices of prescription drugs violate the First and Fourteenth Amendments?
Opinions:
Majority - Justice Blackmun
Yes, the Virginia statute violates the First and Fourteenth Amendments. Speech is not stripped of First Amendment protection simply because it is commercial in nature. Both the individual consumer's interest in the free flow of commercial information and society's interest in the intelligent allocation of resources are substantial. The state's proffered justifications for the ban, such as maintaining professionalism and preventing destructive price wars, are based on a paternalistic desire to keep the public in ignorance, which is an impermissible goal under the First Amendment. While states may regulate commercial speech that is false, misleading, or proposes an illegal transaction, they cannot completely suppress the dissemination of truthful information about a lawful activity.
Concurring - Chief Justice Burger
Yes. The Court's holding is appropriately limited to the advertisement of standardized, prepackaged drugs sold at retail. It does not extend to the advertisement of professional services by the traditional learned professions like medicine or law. Those professions involve providing unique services and professional judgment, not just selling commodities, which presents different risks of confusion and deception in advertising that may justify different, and potentially greater, state regulation.
Concurring - Justice Stewart
Yes. While commercial speech is protected by the First Amendment, it differs from ideological expression and is subject to different regulatory standards. The government has greater latitude to regulate false or deceptive advertising because commercial speech is more easily verifiable by its disseminator and more durable, meaning regulation is less likely to chill protected speech. The First Amendment protects commercial advertising primarily for its informational value, so ensuring the accuracy of that information through regulation serves, rather than hinders, the constitutional purpose.
Dissenting - Justice Rehnquist
No, the Virginia statute does not violate the First and Fourteenth Amendments. The majority's decision wrongly elevates purely commercial speech to the same level as the 'marketplace of ideas' traditionally protected by the First Amendment. The Virginia legislature made a rational determination that the potential harms of promoting drug use and undermining the professionalism of pharmacists outweighed the public's interest in price advertising. This legislative judgment should be respected, and the Court should not substitute its own economic and social beliefs for those of an elected body. This ruling will improperly open the door to advertising for all professions and for potentially harmful products like liquor and cigarettes.
Analysis:
This landmark decision fundamentally altered First Amendment jurisprudence by extending constitutional protection to purely commercial speech, effectively ending the doctrine established in Valentine v. Chrestensen. The ruling recognized that the free flow of truthful commercial information serves a vital public interest in a free-market economy and benefits consumers, particularly the most vulnerable. However, by noting that commercial speech is not entitled to the same robust protection as political or ideological speech, the Court created a new tier of First Amendment analysis. This case laid the groundwork for the intermediate scrutiny test later articulated in Central Hudson, which permits regulation of commercial speech that is not false or misleading only if it serves a substantial government interest and is narrowly tailored.
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