GlaxoSmith $3 Billion Fraud, Off-Label Use, and Dr. Drew

I woke up this morning and read a story about GlaxoSmith paying out $3 billion in a fraud settlement. At first I was thinking some plaintiff must have been injured however when I read the story I learned that GlaxoSmith was ordered to pay out billions of dollars simply because they were marketing drugs for what is known as “off-label” uses. Off-label use occurs when say a drug is approved for cancer but a doctor prescribes it for something else because they believe it will help. In Glaxo’s case they had a drug Paxil which was used for treating depression however wasn’t approved for treating in depression in anyone under 18. This is somewhat bizarre considering it is treating depression for different age group. How exactly is this an “off-label” use? The other drug was Wellbutrin which was approved for depression however GlaxoSmith promoted from 1999 until 2003 for ADHD, weight lost, sexual dysfunction, and substance addictions. Speaking of substance addiction Dr. Drew was actually linked to this case as he was paid $275,000 for in the 1990’s for being involved in a two year project that looked at intimacy and depression.

What is curious however is that this was labeled as fraud yet how many consumers where hurt? Actually many people were hurt by not being allowed to use the drug for off-label use that could have benefitted them. Patients are not going to take something for an off-label use unless they first go to an American Medical Association approved doctor and then have that doctor write a prescription for a drug that was approved for some other use (which cost the drug company $1 billion to make and at least ten years of research.  The reason there is so much off-label use is because the FDA is zealously over regulates even approved drugs. Even if a FDA drug is approved for one illness it has to go through the whole FDA process again to get approved for another illness. This increases the cost to the drug company which is just passed on to the consumer in the form of higher drug prices.

As I have said many times two things that would drastically decrease the price of health care is getting the American Medical Association out of the business of determining who becomes a doctor and getting rid of the FDA. In a free-market consumers would decide whether or not a drug was effective. If a drug company sold people drugs that didn’t work the drug companies would still get sued. Fraud is frowned upon in free-markets since companies do have reputations which affect the value of the company. The effect of having the FDA regulate drug companies to death is only a few companies with blockbuster drugs.  If the FDA was abolished there would be more drug companies, more options, which would in time lead to more effective and safer drugs.