March 4, 2013

A hard pill to swallow–compelling private speech for the benefit of pharmacies

By A hard pill to swallow–compelling private speech for the benefit of pharmacies

Should the government be constitutionally permitted to require you to compile and distribute information, for the private benefit of a private company? This important question arises in the pharmaceutical industry in the upcoming California Supreme Court case Beeman v. Anthem Prescription Management.

When customers fill their prescriptions at California pharmacies, those pharmacies are reimbursed by third party payors, such as insurance companies.  Pharmacy Benefit Managers (PBMs)–also known as Prescription Claims Processors–are intermediaries in the reimbursement process.  Unhappy with reimbursement rates from the PBMs, pharmacies tried to pass a price-fixing bill that created a statutory minimum reimbursement.  But the legislature ultimately chose to replace the rate-setting provisions with a mandate that requires PBMs to obtain or conduct price studies of fees pharmacies charge to private customers to fill prescriptions and to transmit those studies to their insurance company clients.

In Beeman, pharmacies sued PBMs for failing to obtain and distribute the studies.  The PBMs rightly responded that the statute’s requirements violated the California Constitution’s liberty of speech clause.  California’s speech protections are independent of, and often broader than, the First Amendment freedom of speech clause. Today, PLF filed this brief in the case, urging the California Supreme Court to fully protect noncommerical factual speech under the California Constitution.

The category of speech in this case deserves full constitutional protection because the already hazy line between factual speech and core political speech becomes harder to draw everyday.  Numbers tell stories.  Facts persuade skeptics.  If such speech is not protected, any quantifiable piece of information is at risk of being unjustly compelled or prohibited by the government. To abandon such valuable communication in favor of helping private groups obtain private benefits would not only be constitutionally repugnant, but would also open the floodgates for countless special interest groups to lobby the legislature for similar privileges.

We hope the Golden State’s highest court agrees that protecting speech and expression is the best medicine.

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