NCPA - National Center for Policy Analysis


December 21, 2007

Drug makers are unfairly treated by federal prosecutors who claim that the medical community is goaded by the drug companies into filing "false claims" with the government, where hospitals and health plans charge Medicare and Medicaid for drugs used for unapproved indications says Scott Gottlieb, a practicing physician and resident fellow at the American Enterprise Institute.

Drug firms tend to settle these cases, and with good reason:

  • If they fight and lose in court, they can be banned from doing any business with government programs like Medicare.
  • At one time, prosecutions were aimed at a handful of bad actors who encouraged prescriptions for purposes far outside popular medical practice.
  • But like a lot of government efforts, the scope of these prosecutions expanded to encompass a much broader slice of medical activity.

The Justice Department rarely alleges in these cases that the scientific information is false or misleading, only that a firm can be "ahead of the science" in sharing with doctors information about emerging uses of medicines, even when those new uses quickly become the mainstay of care, says Gottlieb.

This might be more tolerable in a world where the FDA rapidly adjudicates study results to decide what belongs in and out of drug labels.  But in reality the FDA reserves 10 months to consider supplemental uses for marketed drugs, and the entire process usually is much longer.  In many cases, doctors don't easily learn about these new drug uses, or get targeted education on prescribing, without the role of the drug firm that is the only deep-pocketed actor with an incentive to share this kind of information.

Source: Scott Gottlieb, "Stop the War on Drugs," Wall Street Journal, December 17, 2007.

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