A pharmacist or doctor combines ingredients to create a medication -- a compounded drug -- for a particular patient.
The 1997 Food and Drug Administration Modernization Act exempts compounded drugs from the FDA's standard approval process as long as such prescriptions are not pressed upon patients and the providers do not advertise the compounded drugs.
A group of licensed pharmacies that specialize in creating compounded drugs filed suit in U.S. District Court in Nevada, contending the restriction violated the First Amendment's free commercial speech protections.
A federal judge agreed, and a U.S. appeals court largely upheld the judge. After hearing argument last February, the Supreme Court upheld the appeals court ruling.
In a plurality opinion joined by three other court members, Justice Sandra Day O'Connor said the government had failed to show why it had a compelling interest in banning such commercial speech. The ads are not misleading, O'Connor said.
Banning compounded drug ads would prevent pharmacists from telling doctors about alternative drugs, she said, or prevent them from informing doctors about easier ways for children to take medication or of making medication taste better for children.
"The fact that the (federal law) would prevent such seemingly useful speech even though doing so does not appear to directly further any asserted governmental objective," O'Connor said, "confirms our belief that the prohibition is unconstitutional."
Justice Clarence Thomas filed a brief concurring in the judgment for different reasons, making up the five-member majority. Thomas said the plurality was using the wrong precedent in analyzing the law.
Justice Stephen Breyer, joined by three other justices, dissented.
"I believe that the court seriously undervalues the importance of the government's interest in protecting the health and safety of the American public," Breyer said.
The advertising restriction "'directly advances' the statute's important safety objective," he added, "to confine the sale of untested, compounded drugs to where they are medically needed."
The court's deciding opinion holds the statute unconstitutional "because it prohibits pharmacists from advertising compound drugs to doctors," Breyer said. " ... Doctors, however, obtain information about individual drugs through many other channels. And there is no indication that restrictions on commercial advertising have had any negative effect on the flow of this information."
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