Wednesday, March 16, 2005

Off-Label as Innovation

One of a series of posts about Off-Label

In a pharmaceutical context, Off-Label refers to uses of drugs that are not approved by the regulators and cannot therefore be printed on the product label or officially promoted by the drug company. More generally, it refers to any unauthorized or emergent use of a product or service. In this blog posting, I shall explore the implications of off-label for innovation and technological change.

According to Alexander Tabarrok and Daniel Klein, Off-Label Drug Awareness Saves Lives (Independent Institute, Feb 2003). "Off-label prescribing is a vital aspect of modern medicine because it often happens that new and important uses are discovered for old drugs."

For some drugs, it seems there is more off-label usage than on-label usage. The medical state-of-the-art can be found in off-label use of drugs, and professional presentations that restrict themselves to on-label uses may lack medical credibility. Robert Stern describes a communication event that was poorly attended, because it was thought to be on the side of the official label, rather than on the side of emergent practice.

Many good uses of drugs may be suppressed by regulators, or self-censored by drug companies in order to get speedy approval. Robert Stern quotes a physician as saying "Often the drug companies will under-dose their labeling to get it through the FDA."

But drug companies are not permitted to promote off-label uses of drugs. This apparently extends to the dissemination of research data concerning possible off-label uses. See Litigation Threatens Off-Label Pharmaceutical Sales, by Kenneth J. Nolan (HealthLeaders News, January 21, 2004)

Off-label eventually becomes on-label. A well-known example is the use of aspirin for heart conditions. Regulators resisted this use of aspirin for years; it is now widely accepted. This provides us with an important pattern of technology development and dissemination.

[Update] Going beyond pharma, we can see similar innovation processes elsewhere. There's a very familiar example in telecoms. Telephone companies were originally oriented towards providing voice services. Computer users started to use modems, which were designed to extract added value from a voice connection by using it to transmit data. With Voice Over IP, we have now come full-circle: VOIP is designed to extract added value from a data connection by using it to transmit voice. These services are now officially sold by the telephone companies - off-label has become on-label.

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