David R. Henderson  

The FDA's $2.3 Billion Attack on Free Speech

Obama's Baby Step on Free Trad... A Contestable Market...
Even Google didn't believe it. After Pfizer's $2.3 billion settlement with the Food and Drug Administration was announced, if you were to search for the words "Pfizer 2.3 billion legal settlement," Google responded with, "Did you mean: Pfizer 2.3 million legal settlement?" Unfortunately, we meant billion. What did this drug company do to merit a $2.3 billion record-breaking claim by the federal government? You might think it knowingly sold a dangerous drug without government permission or a drug that went on to cause hundreds of needless deaths--but no.

So begins my latest co-authored Forbes.com article, out today. The article is about how the FDA cracked down on Pfizer for communicating to doctors that their drugs are useful for "off-label" uses. I testified against this restriction on free speech in 1995.

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COMMENTS (12 to date)
El Presidente writes:

Alright. I was trying to dutifully entertain the arguments about medical efficacy and regulatory inefficiency, until you decided to trot out such a flimsy Constitutional argument. You really should have aimed for something less outlandish than the First Amendment. I want to respect you. Please help me. I encourage cross-disciplinary thinking. I don't mind people musing in unfamiliar territory, but check your pistols with the Sheriff when you ride into town.

If Ford told dealers that some people said their trucks worked better than Toyotas for deep sea diving and a dealer used that suggestion to sell a truck to a customer, please tell me either the dealer or Ford should bear some responsibility for failing to mention that there could be some unfortunate side effects if the customer drove off the end of a ferry. Please tell me that their feigned or willful ignorance stops shielding them when they receive money as a direct result of their inept statements. This isn't about the FDA's approval process unless you already hate the FDA's approval process. This is about product liability and truth in advertising, however one might choose to advertise. Advertising in wholesale markets does not shield a firm from consequences by way of a subsequent retail sale. Approval by the FDA does. That's why it needs to be rigorous and strictly enforced. I'm sure you know some law professors. You might want to talk to them. Freedom of speech also doesn't protect you from prosecution for slander, fraud, or even espionage, nor should it. It isn't carte blanche to say whatever you want without consequence, even if it's true. There are all sorts of truths we could tell in order to persuade people to do things that might be bad for them. When we do it, especially for money, that's wrong. Surely this point isn't lost on you.

Now, if we could talk about the economics instead, I think there's some merit to what you're saying.

Floccina writes:

The funny thing about this is that Kevin Trudeau is still on the air.

I'm glad you see some economic merit.
Notice that I didn't even mention the Constitution: what I referred to was free speech. I grew up in Canada, which didn't get something similar to the Bill of Rights until 1981, well after I had left. But that didn't stop us from talking about and understanding free speech.
And notice also that the FDA didn't claim that there were any harmful side effects of these uses. Their claim was simply that the companies aren't allowed to talk about "off-label" uses, no matter how beneficial those uses. So our analogy with Ford trucks stands.

Dennis Szilak writes:

[Comment removed pending confirmation of email address. Email the webmaster@econlib.org to request restoring this comment. A valid email address is required to post comments on EconLog.--Econlib Ed.]

Li writes:

I am appalled by the logic in this article.
1. What qualification/experience give you the right to make an overall judgement that off-lable usages are beneficial? Is that because doctors have been prescribing for off-lable uses based on "perceived" benefit for a long time? Just because sth has been done for a long time doesn't make it valid/correct/acceptable.
2. Do you have a large scale scientific study to back you up, showing that off-lable usage did create tangible benefit for patients? Doctors are not research fellows that have spent tons of money and time to go through rigorous FDA vetting process for each "ON-LABLE" use. So are you saying that we should rely on perceived benefit rather than scientific research/analysis to deal with human health (and potentially life and death) issue?
3. Given big pharm's ultra-agressive practice promoting their products among prescribing doctors, it's even more important not to accept doctors' claim without some serious debate/research/analysis.
4. There is sth wrong with your comparison of off lable use of drugs with pick-up trucks. Would potential damage caused by wanton off lable use be much more severe and devastating?

Daublin writes:

Would any commentators like to respond to what the authors actually wrote?

El Presidente, it's true that the present blog titla mentions free speech, but the linked article is almost entirely about costs and benefits. Did you take a look at it? Yes, it gets political, but only in asking the question of why drug companies can be penalized to a large degree for doing something that is most likely helpful for consumers.

Li, I thought it fairly obvious that there was no scientific study described in the article. So it's a side point, and a weird one to make. Do you not know that many scientific studies support drug uses that aren't FDA approved? Look up abortion drugs some time if so.

To address what's actually there, the fact that doctors widely make off-label prescriptions is at least suggestive. It's a pretty normal assumption, isn't it, that doctors stand up for their patients and are generally competent to do so. Maybe they are mistaken in crossing the FDA. What do you think?

El Presidente writes:


I'm glad you see some economic merit.

As am I. I can see how, as you explain, the current regime might preclude some beneficial outcomes unnecessarily. Kudos to you for making that point and making it well. Perhaps a labeling system that would show a range of uses, approved and not approved, with substantive and accessible disclaimers and information would help to bridge the divide. If doctors were required to tell patients that the drugs they prescribe are not approved for their ailment, that their side effects and interactions when used as part of an unapproved therapy are not fully known, but that the doctor believes it may be the best treatment, that would put the patient in the position of making an informed decision in consultation with their doctor. I don't suppose pharmas would have a problem with that if they are really just concerned about securing the best outcome for patients and not abusing the patients' trust in their doctor, or the doctor's desire to help, in order to pump up sales and avoid the cost of obtaining FDA approval while securing their portion of the benefits. I don't suppose libertarian economists would have aproblem with it either because it provides the relevant information in a way that empowers individuals to choose what is best for themselves. I think that has some merit as long as the drug is already approved for _something_. Obviously, experimental treatments are already handled in a like manner and there is no need for them to be previously approved.

I can't let you slide on the other part though. Your integrity is too valuable to leave your flank exposed. Let's protect it, shall we?

In the Forbes article, you or your co-author write:

Does this support the First Amendment's protection of free speech? No. The only entity that it helps is the government agency that brazenly says that its rules supersede the Constitution.

I assume we are talking about the same Constitution. If so, then the First Amendment guarantees free speech by amending the Constitution. So, we are making a Constitutional argument, not merely a philosophical one. Please explain how you can then say this with any logical consistency:

Notice that I didn't even mention the Constitution: what I referred to was free speech.

The only way that I can explain this is that perhaps your co-author inserted the bits about the First Amendment and the Constitution. Is that the case, or is there some other explanation I haven't happened upon?

El Presidente writes:


Did you take a look at it?

I read it, twice, before commenting.

David R. Henderson writes:

Dear EP,
Oops. You're right. I thought you were referring to my short blog note, but you're absolutely right that we did raise the First Amendment issue. Please pardon my haste.

Li writes:

Daublin, would you recommend the off lable abortion drug use (but of course backed up by rock solid scientific research/data) to your loved ones or any one you know of, assuming you are highly respected doctors in your community? if you say yes, then I have nothing to add.

El Presidente writes:


Quite alright. I've done worse.

El Presidente writes:

And notice also that the FDA didn't claim that there were any harmful side effects of these uses.

I quibble with this a little. If the FDA said that the drugs were harmful or ineffective they would be committing as great an error as the pharmas failing to acknowledge that they could be. The point is that the FDA cannot make claims one way or the other until the rigorous testing has been done. That's why they have the application process; so that they will know. The absence of unsupportable claims by the FDA is not evidence of a faulty prosecution, but rather proof of high standards. The current standard is that we must demonstrate that drugs are substantially safe and effective and catalogue their risks, interactions, and side effects _before_ we relieve the manufacturer of liability and dole them out en masse. If anything, it demonstrates that the FDA is more concerned about being accurate than the pharmas. It makes me more inclined to trust them with my safety, not less. That doesn't destroy your argument about regulatory inefficiency, but I think my point is clear that pharmas can take advantage of doctors' authority and patients' ignorance when they go around the approval process. I don't share your sentiment toward the FDA in this case. Maybe your experience gives you better intuition. I don't know.

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