BioInsights, May 2009 - Issue 11: Drug Company Settlements for Off-Label Promotions Surpass US $1 Billion

May 29, 2009 Advisory
Off-label promotions of drugs by pharmaceutical companies continue to be a concern of the United States Food and Drug Administration (FDA) and United States Department of Justice (DOJ). In January 2009, Pfizer's US $2.3 billion settlement and Eli Lilly's US $1.42 billion settlement in connection with off-label promotions have been two of the largest payouts to date.
While doctors are free to prescribe drugs for any treatment, pharmaceutical companies are prohibited from promoting drugs for any purposes not approved by the FDA. Each drug's label must contain "adequate directions for use," meaning that the label must describe the uses for which the drug manufacturer received the FDA's approval. Any promotion of a drug for a use that is not indicated on its labeling is an "off-label promotion."
One concern the FDA has is that potentially dangerous uses of a drug that have not been vetted through the clinical trials required for the FDA's approval will be encouraged through off-label promotions. Another FDA concern is that off-label promotions can cost federal and state government programs millions of dollars. Patients get reimbursed for drugs they are taking for off-label uses that are not reimbursable pursuant to those program's guidelines.