NCPA - National Center for Policy Analysis


September 29, 2004

The experience with "off-label" drug usage -- the prescription of medicines for treatment of ailments not specifically targeted by the drug -- suggests federal efficacy requirements may do more harm than good, say economics professors Daniel B. Klein and Alexander Tabarrok.

One example, they say, is off-label usage of Viagra. The drug was originally intended to treat angina (chest pains), but when older men reported its unusual side-effect it became a blockbuster treatment for erectile dysfunction.

In fact, most cancer and AIDS patients are given drugs that are not certified by the Food and Drug Administration (FDA) for the prescribed use. According to Klein and Tabarrok, physicians prescribe off-label for many reasons:

  • Off-label drugs provide patients with more options when standard treatments fail.
  • Patients are heterogeneous -- what works for one person may not work for another -- so a certain level of experimentation is necessary.
  • Medical knowledge advances at a faster rate than the FDA's; on average, off-label uses are widely adopted about 2.5 years before they are recognized by the agency.

News of off-label uses travels fast because physicians learn about them through medical research and experience conveyed by peer-reviewed publications, newsletters and conferences.

The success of off-label drug usage suggests that the market is best equipped to determine the effectiveness of a drug. The benefits of restricting the FDA to safety-testing would expedite the flow of drugs into the marketplace -- estimated to have been slowed by 60 percent due to efficacy testing -- as well as significantly reducing pharmaceutical costs, say Klein and Tabarrok.

Source: Daniel B. Klein and Alexander Tabarrok, "Who Certifies Off-Label?" Cato Institute, Summer 2004.

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