Verify, then Trust: How to Legalize Off-Label Drug Marketing

Abstract

To maximize profits, major pharmaceutical companies (“pharma”) primarily rely on two disparate business practices innovation and marketing. Obviously, discovering additional uses for pre-existing drugs can result in an expanded market and increased profits for these products. However, it is illegal for pharma to actively market these “offlabel” uses without securing FDA approval for these additional indications. Pharma, however, can conduct research outside of the FDA regulatory process to discover additional uses for a specific drug. In turn, these studies on alternative uses might persuade doctors to prescribe the drug in an off-label manner, but only if doctors become aware that such off-label uses are medically indicated. How this off-label usage information reaches doctors is a contentious legal point.

This article will discuss the current state of off-label medicine, relevant legislation in the area, and a proposal designed to capture the benefits of off-label medicine while limiting its dangers when practiced perniciously. Part II will discuss the regulations in place governing offlabel promotion and will detail the practice of ghostwriting and its associated concerns. Part III will analyze the costs and benefits of offlabel marketing and practice of medicine, and will utilize a case study to demonstrate the predicament of drug manufacturers. Part IV will set forth a proposal to use the newly created Patient-Centered Outcomes Research Institute to generate unbiased research on off-label uses, which, in turn, would create a safe harbor for drug companies to widely disseminate studies generated through this process to the medical community. Finally, Part V will present concluding thoughts on the overarching policy considerations driving the need for legislative reform.

Keywords: medical, health, pharmaceutical companies, off-label, FDA, medicine, prescription, marketing, False Claims Act, Patient Centered Outcomes Research Institute

JEL Classification: K23, K39