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How much clearance is needed if your mirror goes right to the wall and the adjacent wall holds a medicine cabinet?

This all depends on how far away the medicine cabinet is from the mirror. If it is too close, some frames may not fit, as they are of differing heights. The best thing to do is to get a sample of the frames you like, place them on the mirrors surface at the edge of the mirror, and see how well you can open and close the medicine cabinet. Or you can respond with more detailed measurements and I can try to help you out from there!

The edge of the medicine cabinet is 1 1/2 inches from the mirror on the wall.

Okay, so you would need a frame with a profile no higher than 1". You may be able to get away with one 1 1/4", but luckily most of our frame profiles are no higher than 1". You can see the profile drawing that gives height and width for each frame style by going to Shop>Frame Styles>than click on the style you want and scroll down. I would still highly recommend buying a sample first, they are $1.50 each with free shipping, otherwise there is little way to tell for sure.