Jane Bambauer
For the conference on Public Health in the Shadow of the First Amendment
This is Part Two of a two-part post on the First Amendment issues raised in United States v. Caronia
Commercial Speech Protection Is Not That Dumb
First
Amendment protection of commercial speech generally is not at odds with
consumer protection. To the contrary, restrictions on advertising often favor
incumbent firms, and the development of these restrictions is often the product
of self-interested lobbying.
Legal scholars sometimes obscure the fact that the commercial
speech doctrine was developed to promote a right to receive information by
consumer listeners, and not to strengthen the power of corporations. Since the
only dissenter in the seminal commercial speech case Virginia State Board of Pharmacy was then-Justice Rehnquist, it’s
difficult to argue that the doctrine developed as mere obeisance to corporate
America. Rather, the Court believed regulators were interfering with
information exchanges that were desirable for consumers.
The
Court was correct. A few years before Virginia
State Board of Pharmacy, several studies showed that well-meaning
advertising bans punished consumers instead of producers. For example, a 1972 study comparing states that either permitted or banned advertising by optometrists
found that the prices for prescription eyeglasses were 25% higher in the states
with advertising bans. The FTC itself found that the product quality was
indistinguishable, and that the gap in prices was attributable to the
information asymmetries in the ad ban states.
Other studies found the same effects from advertising restrictions on legal services and prescription drugs.
Even cigarette advertising
restrictions have ambiguous effects, sometimes negative. Notwithstanding the
Supreme Court’s findings in Lorillard, empirical
evidence is mixed on whether tobacco advertising mostly affects market share
among brands or if it raises overall demand for tobacco products. There was at
least one period when cigarette advertising had the effect of decreasing demand for cigarettes. 1950 marked the first time that
doctors were making an explicit connection between smoking and cancer. But
while the federal government, the American Medical Association, and the American Cancer Institute reassured consumers that the evidence was preliminary and that there was no reason to drastically alter smoking habits, the tobacco
industry lost sales every year for several years
in a row.
One plausible explanation, as explained by John Calfee, is that the industry was engaged in a “less worse”
campaign. The brands were encouraging smokers to pick their slightly
less-unhealthy brand over other more dangerous ones. So consumers were
bombarded with the message that these things are NOT healthy.
(Image from Euro-Cig.com)
But in 1955, cigarette sales picked up again, and continued to climb at a breakneck until the Surgeon General’s famous 1964 report. What happened in 1955 to reverse the trend? One candidate for causation is the Federal Trade Commission's first set of guidelines restricting health claims in cigarette advertising. After that year, cigarette companies were helped out of their Prisoner’s Dilemma and went back to advertising based on taste and smoothness.
(Image from the American Association for Cancer Research)
The regulation of advertising doesn't always have the effects regulators expect. A 1993 study of European countries with and without cigarette advertising bans found a positive effect on consumption caused by the ad bans, and today the most rigorous studies of the effects of cigarette advertising restrictions continue to show that they have either no effect, or a small effect—an effect that is easily dwarfed by other policies like a simple tax increase. In other words, cigarette advertising regulation might not survive rational basis review, let alone intermediate scrutiny.
Regulations
of prescription drug promotion are a different matter. Because on-patent drugs can
extract monopoly rents for some time, the Chicago School story about efficient
markets in advertising is not as plausible. The FDA is funding a “torrent ofstudies” right now to assess the effects of direct-to-consumer advertising for
prescription drugs. Hopefully these will shed some light on whether there is a
problem to be solved. But generally speaking, the public is not overly
credulous. Surveys of consumer perceptions about advertising consistently find
that 70% of people are skeptical of the claims made in advertising. (Skepticism
is reduced, however, when consumers know that advertising regulations are in
place.) In contrast to taxes and direct regulations of sales, the regulation of
the information environment will have ambiguous effects on consumers.
Fostering the Production of Knowledge
Chris Robertson has argued that the
regulatory scheme challenged by Caronia
should survive a First Amendment challenge because it creates the proper incentives
for drug producers to improve the state of scientific knowledge. The
supplemental new drug application process will compel a drug company to do more,
and better, research before promoting an off-label use of the drug. This is
especially appealing where we have legitimate fears that a drug producer
benefits from maintaining ignorance or thwarting independent research. For the
reasons I described in Part One, I think the heightened standards for accuracy
currently used by the FDA do not actually improve the state of knowledge
because those standard, with their costly compliance, will have the net effect
of filtering out useful information without supplying better information.
Moreover, the federal government has
other, better, ways to improve the state of research. It could use its compulsion
powers to generate more research data from doctors and pharmaceutical companies
and make it available to researchers. And it could get out of the way of
private data collection efforts.
First, consider how the government
could expand the data commons available to public health researchers. A good
deal of drug testing actually occurs after a drug has been FDA-approved.
Because the pre-approval drug studies are limited in duration and subject
population, doctors wind up using trial and error after the drug has come to
market in order to see how a drug, for example, affects children, affects
minority populations, interacts with other drugs, works over time, and works as
off-label therapies. The benefits of this ad hoc research are not always shared
with other doctors and with the public at large, and sometimes, without pooling
the data over a large population of patients, important side effects and
benefits will be missed. The FDA can improve the quality of post-market drug
research by mandating reporting to its Adverse Event Reporting System. (Today
reporting is voluntary.)
Second, the government should
reconsider well-intentioned privacy and trade secret protections that stymie
the production of knowledge. Researchers have used Google search results
containing drug names and symptoms to discover previously unreported side
effects. Public health workers in Kenya have used cell phone location data to
track the spread of malaria. And Fitbit data can track recovery times from
surgery. Future innovations of this sort could be wiped out if strong forms of
data privacy laws are adopted to limit collection and repurposing of
information. Existing laws like HIPAA make access to useful data cumbersome,
and de-identification requirements often damage the utility of the data.
Public health receives great,
albeit indirect, benefits from the collection and sharing of individual-level
data. Poorly designed privacy laws disrupt those benefits. They might even violate First Amendment rights in collecting information, or so I
have argued in my recent article “Is Data Speech?” I admit this is not a
straightforward or easy argument to make. Historically, courts have
distinguished between information dissemination and information gathering,
recognizing First Amendment interests in the former but not the latter.
However, one of the core achievements of free speech is to
liberate minds. To do so, individuals must have the freedom to learn not
only from each other, through traditional speaker-listener transfers, but also
directly from the world, and from our observations of it. When the government
regulates the collection of information for the very purpose of interfering with new knowledge, that regulation
should give rise to First Amendment scrutiny.
Sure enough, courts are now
beginning to recognize a right to record as a free speech necessity. Since the
government can easily circumvent the free exchange of ideas and information by
frustrating access to raw data, the freedom to collect information is
indispensible to meaningfully free speech.
What I describe here is yet another
expansion of First Amendment liberties. Its implications trouble scholars who
already feel that the right to free speech has metastasized and grown beyond
its use as a tool for democratic self-governance. I remain doubtful, but
open-minded, about the horrors that are predicted to come in the Big Data era.
At a high level of abstraction, though, I am quite confident the First
Amendment will be interpreted to set limits on the scope of unprotected
“misleading” speech and on the government’s ability to thwart data-collection.
If it isn’t, we will live with a government that can decide what is “true” and
keep us from learning on our own.
Jane
Yakowitz Bambauer is Associate Professor of Law at the University of
Arizona James E. Rogers College of Law. You can reach her by e-mail at
janebambauer@email.arizona.edu