Off-label marketing: Good for business, bad for health

Off-label marketing has been illegal since 1938 but continues despite major lawsuits because expanding market share leads to hefty industry profits. And now, a last minute Bush administration policy push inside the FDA may be giving this practice of off-label marketing the official thumbs up.

Pharmaceutical companies are spending big bucks to settle suits for illegally promoting drugs for off-label uses and harming customers in the process. The practice, called off-label marketing, has been illegal since 1938 but continues because expanding market share leads to hefty industry profits. And now, a last minute Bush administration policy push inside the FDA may be giving this practice of off-label marketing the official thumbs up.

Most recently, Eli Lilly, the maker of Zyprexa, pled guilty to off-label marketing in a federal suit settled in January and has been ordered to pay a $1.4 billion settlement—the largest in Department of Justice history.1 The FDA approved the use of Zyprexa (olanzapine), for treatment for schizophrenia and bipolar illnesses in 1996 but the drug has been used off-label for generalized anxiety disorder, panic disorder, post-traumatic stress disorder, conduct disorders in children and dementia among elderly patients.

After the ruling, Laurie Magid, the Department of Justice acting attorney in the case, severely criticized the industry for endangering consumer health and ignoring federal law by marketing drugs for off-label uses. In a Philadelphia Inquirer op-ed Magid said, “These cases should send a clear message to the entire pharmaceutical industry: This conduct must stop.”2

Industry profits eclipse potential fines?

In the past five years, almost all major pharmaceutical companies have been involved in lawsuits for off-label marketing offenses, resulting in over $6 billion in settlements.3 Industry documents disclosed in these cases show companies knowingly promoted off-label uses for drugs that had unknown or undisclosed health effects for the express purpose of increasing market share and boosting sales.

Neurontin (gabapentin), an adjunctive antiepileptic made by Warner-Lambert (now part of Pfizer), was marketed off-label for epilepsy monotherapy (for use by itself), as a treatment for migraines, bipolar disorder, restless leg syndrome and attention-deficit/hyperactivity disorder (ADHD). That case settled for $430 million.4 Actiq (fentanyl), a painkiller 80 times more potent than morphine made by Cephalon, was approved by the FDA to treat cancer-related pain but was marketed off-label as a general pain reliever.5 Zyprexa, an antipsychotic approved to treat schizophrenia and some events related to bipolar I mania, was illegally marked. In each example, companies marketed their products for more common conditions than those approved by the FDA. And in each case, patients taking these medications for off-label uses experienced significantly more adverse health events, including death, than those taking the drugs for approved uses. All three companies have pleaded guilty to their charges, and the settlement monies are headed to consumer and state restitution funds and whistleblower compensation.

Unfortunately, however, settlement fines seem scarcely enough to successfully curb the practice of off-label marketing when compared to industry profitability. In 2007, the pharmaceutical industry was the nation’s third most profitable industry out of all Fortune 500 firms, with drug sales over $286.5 billion.6 When Lilly’s Zyprexa was leading company sales, the drug brought in over $1 billion per quarter,7 vastly exceeding the recent settlement fine ($1.4B). Today, the company’s total annual revenue is more than $20 billion.

Why off-label marketing is off limits

Much like direct-to-consumer (DTC) advertising, off-label marketing influences prescribing habits which, in turn, drives drug utilization and sales. DTC ads on TV or in magazines are only allowed to promote on-label uses of drugs and are subject to FDA penalties if guidelines are not met. However, off-label marketing, which targets doctors, is illegal because use of a drug for any indication other than the one on the (FDA approved) label carries unknown risks.

Historically, the FDA has served to protect consumers against those risks. Banning the marketing of drugs for unapproved uses was an issue of consumer protection when first addressed as a federal concern. Since 1938, when the Food Drug and Cosmetics Act established new rules for drug makers, off-label marketing was recognized as a serious threat to consumer health. Sulphanilamide, an elixir marketed for the treatment of infection, was the catalyst for this Act. Having never been tested, and containing what is now recognizable as anti-freeze, the “elixir” killed more than 100 people, most of them children, before being taken off the market. Public outrage led to the establishment of what was to become the defining feature of drug regulation: safety and effectiveness as determined by the independent, peer-reviewed clinical trial.8 Theoretically, FDA approval of a medication is granted for specific use(s) and it is for those uses only that the drug can be marketed.

Side effects

Ten years after being on the market, Zyprexa was given a black box warning that states, “Not approved for the treatment of patients with dementia-related psychosis.” Independent studies revealed these patients have almost two times the risk of death compared to those taking a placebo (non-theraputic control drug).9 But the company had already made a global marketing blitz, advertising the drug as a good treatment for dementia-related symptoms. Their “five at five” campaign championed 5 milligrams at 5 PM to subdue disruptive elderly patients with dementia.

Zyprexa also causes weight gain and diabetes, side effects that are particularly pronounced in children and youth. According to the drug’s label, more than half of people taking Zyprexa as a long-tem treatment gain 12 or more pounds. Additionally, “safety and effectiveness in pediatric patients have not been established.” Despite the warnings, the dramatic increase in the number of antipsychotic prescriptions written between 1996 and 2005 was due, one study found, to a “remarkable increase in the rates of use for off-label conditions and use among youth.”10 The authors singled out “drug company marketing effects” and the “dominance of industry-funded trials” as two potential sources for the profusion of antipsychotic prescriptions.

Beyond drug safety; health spending and ‘manufactured’ evidence

To be clear, off-label prescribing is both legal and common—it is off-label marketing that is illegal. Doctors can prescribe any medication they believe will be helpful as long as that drug is FDA approved. Radley et al. reported in the Archives of Internal Medicine that according to a large nationwide sample of prescriber reports collected in 2001, 21% of all prescriptions were for off-label uses.11

Many argue off-label drug prescription is necessary in situations where clinical trials have not included vulnerable populations, for example children and elderly adults, due to ethical guidelines. So off-label prescribing is not necessarily a bad idea, but it does carry extra known and unknown health risks and costs to health care.

There are other concerns about off-label marketing. First, blockbuster drug sales driven by marketing campaigns contribute to skyrocketing health care spending. Prescription drug costs account for $1 out of every $10 spent on health care in the U.S. and that number is expected to increase rapidly over the next 10 years, in part due to rising drug utilization rates.6 In 2007, 3.8 billion prescriptions were filled, up 72% since 1997.6 The U.S. spends $792 per capita on pharmaceuticals, more than all other OECD countries, and nearly twice the OECD median.12 One might expect this kind of spending to translate in to real health benefits, but U.S. health status, as measured by WHO indicators, only slipped further behind developed nations since 1997 with the highest mortality from causes considered amenable to health care.12

Second, conflicts of interest between drug researchers, the pharmaceutical industry and the FDA, leave consumers vulnerable to untested, scientifically unsound medical practices, the health care system to pay for the billions of dollars spent on medications used for off label purposes, and treatments for their untoward side effects. In an interview with McClatchy Newspapers, Arthur Caplan, Professor of Bioethics, University of Pennsylvania called it a “fox in the hen house situation.”13 The research available to doctors regarding off-label drug treatments is heavily biased by pharmaceutical industry interests—one recent study found 73% of medications prescribed for off-label use had “little or no scientific support.”11 Additionally, FDA drug advisory panels that make recommendations about which drugs should be approved are populated with drug company consultants who have financial ties to the drugs reviewed. In a report published in JAMA in 2006, Public Citizen’s Health Research Group found conflicts of interest occurred in 73% of advisory meetings in 2001-2004.14

As Marcia Angell, former editor of The New England Journal of Medicine and author of The Truth About Drug Companies, recently wrote, “It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines.”15

Marketing matters—expanding the target audience

When a drug’s specific indication is narrow and therefore appropriate for a relatively small group of patients, pharmaceutical companies can expand potential user groups and boost sales legally by adding new indicators that have been demonstrated to respond favorably to this medication, using scientifically valid testing procedures. This approach, however, requires FDA approval. As the recent court cases reveal, many drug companies chose to sidestep regulatory authorities and expand their drug’s market share by off-label marketing to doctors.

src=”uploads/images/old_archives/img/Cocktailofdrugs.png” alt=”Cocktailofdrugs” hspace=”10″ vspace=”5″ width=”250″ height=”167″ align=”right” />Blockbuster sales of a product approved for a very limited audience is less likely a measure of drug efficacy than the outcome of powerful marketing campaigns directed at doctors. Whether a medication’s use is expanded legally with FDA approval (as GlaxoSmithKline did with Paxil when its use was extended from treatment of depression to social anxiety disorder), or illegally with off-label marketing (as was the case with Neurontin, Actic, Zyprexa and many others), the result is more people receiving a prescription and consequently sales soar. In the words of Barry Brand, Paxil’s product director at GlaxoSmithKline, “Every marketer’s dream is to find an unidentified or unknown market and develop it.”16

For example, in the case of Zyprexa, indicated uses (for schizophrenia and some bipolar symptoms) occur relatively rarely—between 1-3% of the general population. But when the company began marketing the drug as a treatment for other off-label symptoms, the potential market share was greatly expanded. Documents used as evidence in a Zyprexa court case indicate this was the result of a targeted off-label marketing agenda. In a company meeting, Zyprexa brand manager Mike Bandick said the company “intends, quite simply, to redefine the way [primary care physicians] treat mood, thought, and behavioral disturbances.”17 Eli Lilly’s efforts to convince prescribers that Zyprexa was a good treatment for dementia (and several other disorders) launched the drug into a top selling position—with a total of $39 billion in sales since it hit the market.18

FDA industry ‘Guidance Doc,’ new cause for worry

Before a solution to the above concerns can take shape, there is a new monkey wrench in the off-label drug promotion conflict. In January, during the last days of the Bush administration, policy makers at the FDA issued a ‘Guidance Document’ for the pharmaceutical industry.19 Despite recent court rulings, the document appears to give pharmaceutical companies the thumbs-up to market “unapproved new uses” for FDA approved drugs to doctors. In other words, drug sales reps have the legal ‘ok’ to send prescribers medical articles their company has funded, directly benefiting from the evidence they have produced.

Several health and consumer groups strongly criticized an earlier draft of this FDA guidance. In a 2008 statement,20 the Patient and Consumer Coalition, comprising such organizations as Center for Science in the Public Interest, Consumers Union, National Physician’s Alliance, Our Bodies Ourselves, the Prescription Project and others, asserted that it “strongly opposes this draft guidance, which would allow the promotion of off-label use of prescription drugs and medical devices by giving manufacturers the right to distribute reprints of poorly regulated journal articles with minimal federal oversight.” In the Coalition’s view, “the draft guidance is much too lenient, has no enforcement tools, undermines the Food and Drug Administration’s prohibition on off-label marketing, and lowers incentives for drug and device makers to complete clinical trials or seek FDA approval for new uses.”

Proposed solutions

As the FDA comes under new leadership, several solutions to the problem of off-label marketing warrant consideration.

  1. Enforce existing federal laws and drop the exceptionalism in the new ‘Guidance Document.’ As U.S. Attorney Magid from the Zyprexa case wrote, “Off-label marketing is a sales strategy that ignores the basic purpose of the federal drug-regulatory program, which is to protect the consumer… Off-label-marketing cases are not easy to bring. They can take years and involve the review of millions of documents by an alphabet soup of federal agencies, state regulators, and law-enforcement officers. But we will keep bringing them until this practice stops.”2
  2. Pass new laws that require full disclosure of all drug company payments to physicians. Senators Grassley (R-IA) and Kohl (D-WI) have introduced “The Physician Payments Sunshine Act” that would require pharmaceutical companies to report all marketing and payments to doctors to the Department of Health and Human Services. With increased attention to the need for corporate transparency under the Obama administration and a Democrat led Senate, the bill may have a chance to pass this year.
  3. Provide new incentives and penalties to encourage physicians to report off-label promotional campaigns. Fugh-Berman and Melnick suggest increasing fines, increased marketing regulations and more culpability for physicians. “Perhaps financial incentives could be provided to reward physicians and others who report off-label promotions,” the authors suggest.



1 Pharmaceutical company Eli Lilly to pay record $1.415 billion for off-label drug marketing. U.S. Department of Justice. Jan 15, 2009. Available at:

2 Magid L. Keeping us safe from drug reps. The Philadelphia Inquirer. Jan. 27, 2009. Available at:

3 Adams C. Bush admin opened door to controversial off-label marketing of drugs. McClatchy-Tribune News. Feb 1, 2009. Available at:

4 Warner-Lambert to pay $430 million to resolve criminal and civil health care liability relating to off-label promotion. U.S. Department of Justice. May 13, 2004. Available at:

5 Attorney General Announces $6.15 Million Settlement For Illegal Drug Marketing. Connecticut Attorney General’s Office. September 29, 2008. Available at:

6 Prescription Drug Trends – Fact Sheet. Kaiser Family Foundation. Sept 2008.

7 Ackerman R. Eli Lilly’s Zyprexa sales are depressing. Forbes. April 21, 2008. Available at:

8 Goozner M. The $800 Million Pill: The Truth behind the Cost of New Drugs. University of California Press; 2004.

9 Patient information sheet: Olanzapine (marketed at Zyprexa). FDA Center for Drug Evaluation and Research. Sept 2006. Available at:

10 Domino ME, Swartz MS. Who Are the New Users of Antipsychotic Medications? Psychiatric Services. 2008;59(5):507–14.

11 Radley DC, Finkelstein SN, Stafford RS. Off-label Prescribing Among Office-Based Physicians. Arch Intern Med. 2006;166:1021-1026.

12 Towards a High Performing Health Care System: An International Perspective. The Commonwealth Fund. Presentation by Robin Osborn. October 20, 2008.

13 Adams C. Late move on drugs by Bush FDA could be dangerous. McClatchy-Tribune News. Feb 1, 2009. Available at:

14 Lurie P, Almeida C, Stine N, Stine A, Wolfe S. Financial Conflict of Interest Disclosure and Voting Patterns at Food and Drug Administration Drug Advisory Committee Meetings. JAMA. 2006;295:1921-1928.

15 Mossakowski KN. Is the duration of poverty and unemployment a risk factor for heavy drinking? Soc Sci Med. 2008;67(6):947-55.

16 Vedantam S. Drug Ads Hyping Anxiety Make Some Uneasy. Washington Post. July 16, 2001; Page A01. Available at:

17 Zyprexa Primary Care Presentation. Eli Lilly National Sales Meeting. Mar 13, 2001. Available at:

18 Levine B. The Case for Giving Eli Lilly the Corporate Death Penalty. AlterNet. March 3, 2009. Available at:

19 Good reprint practices for the distribution of medical journal articles or medical scientific reference publications on unapproved new uses of approved drugs and approved or cleared medical devices. Department of Health and Human Services. Food and Drug Administration. Office of the Commissioner. Jan 2009. Available at:

20 Comments of the Patient and Consumer Coalition to the U.S. Food and Drug Administration “Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices DRAFT GUIDANCE Docket No. FDA-2008-D-0053.” April 18, 2008. Available at:

21 Fugh-Berman A, Melnick D. Off-label promotion, on-target sales. PLoS Med. 2008;5(10):e210.


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