How the FDA Produces Knowledge (and Is Not So Weird)

Credit: SalFalko

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.

In a second part of the new article, produced for a symposium at NYU’s Classical Liberal Institute, we show how innumerable other laws function similarly, proscribing behaviors only when done with illicit intent and using speech as evidence thereof. This account contrasts with the view of some commentators who suggest that the FDA’s “speech as evidence of intent” theory is somehow aberrant or disingenuous.   Below the fold, I’ll share an excerpt from the paper developing an example from the pharmaceutical IP world.

From the paper:

     [G]eneric manufacturers can be liable for inducing others to infringe by using a product in a way that is covered by an inventor’s use-patent. Here, Congress has here adopted a specific-intent test, rather than predicating liability on mere knowledge.  In a pivotal case, the Supreme Court has said, “advertising an infringing use … show[s] an affirmative intent that the product be used to infringe, and … that infringement … overcomes the law’s reluctance to find liability when a defendant merely sells a commercial product suitable for some lawful use.” Indeed the illegal intent is often shown by speech, including product instructions and advertisements. Yet no court has thought this practice has violated the First Amendment.

In the pharmaceutical domain, for example, although the patent on the chemical compound gabapentin had expired, Warner Lambert also owned a patent on the use of gabapentin for certain neurodegenerative diseases, including Alzheimer’s.  TorPharm sought to market the drug for epilepsy, but would infringe the Warner Lambert patent if they induced physicians to prescribe gabapentin for one of the patented uses. To determine whether TorPharm had done so, the court looked to whether it had a sales force, published advertisements in medical journals, directly marketing to physicians, funded research, or funded meetings on the claimed method — all forms of speech.  No First Amendment right was invoked.

It would be ironic if, in the pharmaceutical industry, innovator-companies (like Warner Lambert, since acquired by Pfizer) successfully pled the First Amendment to give them a right to market off-label, but when they become plaintiffs in patent cases, were unable to enforce their use-patents because generic makers (like TorPharm) claimed a First Amendment right to promote on-label in ways that infringed the innovator’s patent. These two laws have a common goal. Patent law’s prohibition on the marketing of infringing uses and the FDCA’s prohibition on the marketing of unapproved uses both create incentives for the production of scientific knowledge.

Check the paper for the cites, as well as other examples from the law of bribery, employment discrimination, securities law, and bankruptcy law — all using speech as evidence of intent.

We call this paper “Tip of the Iceberg,” because if the law of off-label promotion is worrisome, then there is much much more that should worry the courts as well.  On the other hand, perhaps a more coherent theory would uphold the pre-market approval system we now have as not so peculiar after all.

We would welcome your feedback on the paper too!


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