The Federal government has wrested billions of dollars from the drug and device industry in settlements of claims that the companies broke the law by promoting their products “off-label” for uses not approved by the FDA. In response, companies have asserted that promotions are a form of speech, protected by the First Amendment. Speech regulations are especially worrisome when motivated by paternalism. This argument has received some traction in the courts, and is now getting a favorable look by the Trump administration.
I have argued (here, here, and here) that this law is not actually a speech regulation. Nor is it paternalistic. Instead, it is simply a vanilla regulation of a behavior (shipment of product in interstate commerce), which depends on various sources of evidence (including speech) as revealing whether the actor has an illicit intent (an unapproved use of the product). The pre-market approval system, which requires that companies prove safety and efficacy for all intended uses, solves a collective action problem to produce information as a public good. This is our key social mechanism for producing knowledge about safety and efficacy. If this law is unconstitutional in the off-label context, the entire pre-market approval system would seem to be as well.
In a new piece out on SSRN, my physician co-author Victor Laurion develops the example of the drug Seroquel XR, to show how a federal prosecution for off-label promotion caused the company to perform scientific research on two new indications (general anxiety disorder and major depression). A detailed discussion of the regulatory record shows how physician prescribing was improved by this public information, regardless of whether the FDA approved the new indication. In this way, the FDA protects the liberty of physicians and patients to try drugs for new uses, even while holding companies to the proof of any uses that they actually intend. The fact that the company’s intention is shown by speech evidence is immaterial. Read More