Off-label Innovations

• Publication year: 2022

Off-Label Innovations

David A. Simon
Harvard Law School, dsimon@law.harvard.edu

Off-Label Innovations

Cover Page Footnote
Research Fellow, Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics, Harvard Law School. I wrote this Article during my time as a Visiting Associate Professor & Frank H. Marks Intellectual Property Fellow at George Washington University Law School and as a Fellow at the Hanken School of Economics. I gratefully acknowledge the financial support from the Academy of Finland research project, Fairness, Morality and Equality in International and European Intellectual Property Law (FAME-IP). For comments and suggestions, I thank Michael Abramowicz, Amy Kapczynski, Edith Beerdsen, Sam Brunson, Dan Burk, Rebecca Eisenberg, Scott Kieff, Lynn LoPucki, Lidiya Mishchenko, Faraz Sanei, Sonia Suter, James Tierney, the participants at the 2020 Intellectual Property Scholars Conference at Stanford Law School, the Junior Scholars Workshop, the Seminar on IPR and Pharmaceutical Innovation at the Hanken School of Economics, the 18th Annual Works-in-Progress in Intellectual Property Colloquium hosted by American University Washington College of Law, Texas A&M University School of Law, and University of Utah S.J. Quinney College of Law, the American Association of Law School's New Voices in IP Program, and the Third IP & Innovation Researchers of Asia (IPIRA) Conference. I owe special thanks to Dhanay Cadillo Chandler, Samuel F. Ernst, Dmitry Karshtedt, Erika Lietzan, Lisa Larrimore Ouellette, W. Nicholson Price II, Rachel Sachs, and Ana Santos Rutschman, all of whom provided extensive feedback. I thank the Georgia Law Review for the diligent work.

OFF-LABEL INNOVATION

David A. Simon^*

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Modern medicine faces many significant problems. This Article is about two of them. The first is that approved drugs have many potential therapeutic uses that are never identified, investigated, or developed. The second is the routine practice of physicians prescribing approved drugs for unapproved uses—so-called "off-label" uses. These problems seem very different. Failure to invest in potential new uses is an innovation problem: firms lack incentives to research and develop new uses of old drugs. The problem of off-label uses, on the other hand, is one of safety and efficacy: off-label uses are risky because they are not supported by the same level of evidence as approved uses. While descriptively accurate, this is not the only accurate description. Each of these problems is also one of information—a lack of information about the safety and efficacy of prescribing approved drugs for unapproved uses. Because all new uses of approved drugs are off-label uses, gathering safety and efficacy information about off-label uses, in effect, produces safety and efficacy information about many new uses. Not only

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that, but some off-label uses may be new: physicians may innovate by prescribing drugs off-label. Reframing these two seemingly disparate problems in terms of a common information deficit enables a single, information-based solution. This solution—which draws on the existing suite of innovation policy levers—incentivizes providers, rather than pharmaceutical companies, to generate the post-market information needed to address both problems.

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Table of Contents

I. Introduction...............................................................705

II. The Problem of Off-Label Uses & The Problem of New Uses.....................................................................715

A. THE PROBLEM OF OFF-LABEL USES............................715

1. Off-Label Use....................................................716
2. The Problem of Off-Label Uses as an Informational Problem.....................................722

B. THE PROBLEM OF NEW USES......................................726

1. Patent Law........................................................728
2. Market & Data Exclusivity...............................733
3. The Problem of New Uses as an Informational Problem ............................................................. 736

C. THE COMMON INFORMATIONAL OVERLAP...................738

III. Providers as a Tool to Solve the Problems of New and Off-Label Uses.................................................740

A. DATA COLLECTION AND ELECTRONIC HEALTH RECORDS ................................................................................741
B. INSTITUTIONAL BODIES AND EXPERTISE...................742
C. INSTITUTIONAL KNOW-HOW AND EXPERIENCE..........746
D. THE FDA'S REAL WORLD EVIDENCE PROGRAM.................748

IV. Incentives..................................................................749

A. INCENTIVES GENERALLY............................................750
B. BUILDING OUT EXISTING GOVERNMENT PROGRAMS.... 752
C. NEW GOVERNMENT PROGRAMS: MARKET INCLUSIVITY ..................................................................................759

1. Eligibility & Qualification...............................759
2. Market Inclusivity Subsidy .............................. 763

D. TAX CREDITS AND GRANTS.........................................770
E. MODIFIED MARKET EXCLUSIVITY, ROYALTIES, AND SUA SPONTE LABEL EXPANSIONS......................................778

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V. Conclusion..................................................................784

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I. Introduction

In 1966, the Food and Drug Administration (FDA) approved the drug amantadine hydrochloride (amantadine) for the prevention of Asian influenza A (H2N2).¹ Doctors began prescribing the drug shortly thereafter.² One patient who was prescribed the drug also happened to suffer from Parkinson's disease (Parkinson's).³ To her surprise—and the surprise of her neurologists—many of her neurological symptoms lessened shortly after starting a course of the medication.⁴ Those doctors—who noted that "[s]uch serendipitous findings are not rare[,] . . . especially in chronic diseases"—proceeded to study amantadine's effect on Parkinson's.⁵ But it would be another seven years before the FDA approved amantadine to treat that condition.⁶

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In the interim, and even after its approval for Parkinson's,⁷ doctors would prescribe amantadine for an increasing number of unapproved conditions, including shingles,⁸ chronic fatigue syndrome,⁹ hepatitis,¹⁰ autism,¹¹ Jakob-Creutzfeldt Disease,¹²

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epilepsy,¹³ and traumatic brain injury (TBI).¹⁴ And they would do so despite the unknown efficacy and risks of prescribing amantadine

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for new indications in populations—some of whom probably took other medications—with underlying health conditions. Researchers identified some of these potential uses from the initial investigation spurred by the first patient report.¹⁵ Other uses, including amantadine's uses for treating Jakob-Creutzfeldt Disease and epilepsy, were tested by physicians prescribing this approved drug for unapproved uses—they were prescribing "off-label."¹⁶

How were so many doctors prescribing approved drugs for such different unapproved uses, especially given that those unapproved uses had unknown risks? While this may seem puzzling, it is actually quite common. Physicians frequently prescribe drugs off-label.¹⁷ And in some areas of medicine, such as cardiology and psychiatry, off-label prescriptions predominate.¹⁸ Yet, the discovery of amantadine as a treatment for Parkinson's and other conditions, and its slow development for many of those uses, highlights two important problems for medicine that remain unsolved—and how to solve them.

One is the "Problem of Off-Label Uses."¹⁹ Off-label uses may not be supported by the same level of evidence as approved, on-label uses. Patients prescribed drugs off-label are, therefore, subjected to a greater risk of harm. The risk, however, is often necessary for patients with limited or no efficacious on-label treatments. At the time doctors discovered that amantadine might have some effect on Parkinson's, for example, no known curative treatments for it

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existed.²⁰ Like all off-label uses, amantadine's safety and efficacy profile for Parkinson's was largely unknown because it hadn't been researched either through observational studies (where researchers make observations without any interventions)²¹ or experimental randomized controlled clinical trials (RCT)²² (where researchers typically randomize subjects into treatment and control groups and ensure that neither the subject nor the researcher knows who is in which group).²³ The same is true for its current off-label use by doctors to treat many other conditions, such as TBI.²⁴

One reason for the lack of research into new uses of existing drugs, including widespread off-label uses, is because of a different challenge, dubbed the "Problem of New Uses"²⁵ : patent law and drug regulation—which work well for some kinds of novel drug development²⁶ —don't always provide sufficient economic incentives

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for companies to research and develop (R&D) new uses for old drugs (and existing off-label uses).²⁷ Although R&D for new uses is much cheaper than R&D for new drug molecules,²⁸ firms often don't pursue it because they can't exclude others (enough) from using the results.²⁹

Research on amantadine illustrates this.³⁰ The FDA approved amantadine in 1966, the same year the United States Patent and Trademark Office (PTO) issued to DuPont two patents related to amantadine.³¹ From 1966 until 1983 when amantadine's patents expired—and especially before Congress enacted the Hatch-

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Waxman Act in 1984³² —DuPont had incentives to invest in clinical trials needed to obtain FDA approval for other possible indications, including Parkinson's.³³ The strength of these incentives, of course, waned as 1983 and 1984 drew closer, and largely dried up thereafter.³⁴ As the patent term decreased, DuPont's ability to recoup investment costs and turn a profit also decreased.³⁵ Because shrinking patent terms framed...