I. Introduction
Off-label use of medicines encompasses the supply, dispensing or prescription of a medicine for any indication, method of administration, patient group, dosage or treatment not mentioned in its marketing authorisation (MA).Footnote 1 A report elaborated in 2017 to inform the European Commission (EC) about the extent of off-label use of medicines in the European Union (EU) shows impressive rates.Footnote 2 Between 13% and 69% of the quantity of determined paediatric prescriptions investigated in the hospital setting are off-label, while there is a broader range of 2–100% if the analysis is restricted to an outpatient setting.Footnote 3 This depends on the locality examined: just in France, for example, the number of neonatal prescriptions that are off-label may range from 55% to 80%.Footnote 4
In some areas of practice, such as oncology and rare diseases,Footnote 5 and in specific patient populations, notably children, pregnant women and the elderly, for which there are insufficient clinical trials mostly due to economic reasons,Footnote 6 the majority of drug prescriptions are off-label.Footnote 7
Off-label could indeed reveal itself to be an efficient or even a last-resort option of treatment for a large number of patients. However, the importance of the issue also lies in the lack of scientific knowledge associated with off-label use and the consequent likelihood that a noteworthy share of the population could receive treatments for which there are no data regarding safety and efficacy, putting their health and lives at immeasurable risk. Furthermore, if a common feature of certain regulatory systems is a demand for a preapproval procedure as an indispensable requirement for the manufacturing and marketing of medicinal products and yet a noticeable portion of consumed medicines transcends those rules in a meaningful set of situations, including those depicted above, then something is probably not working right. Indeed, the explanation for this may not be exclusively found in the diligent exercise by physicians of their therapeutic freedom to prescribe.
The drivers of off-label use of medicines are multiple because the scenario is complex and involves many stakeholders, namely regulatory agencies, the industry, physicians, insurers, professional medical associations and consumers with distinct and often conflicting interests.Footnote 8 Similarly, off-label use of medicines is important for a variety of legal fields, including pharmaceutical law (eg MA and extensions), competition law (eg anti-competitive practices), intellectual property (eg patents), public health law (eg access to medicines) and tort law (eg liability of physicians for clinical malpractice).
The present research has a limited but well-defined scope. It enquiries into the kinds of incentives a drug regulation built upon the idea of MA, particularly the frameworks implemented in the EU, in combination with controlled off-label promotion, may create in order to prevent pharmaceutical companies from gaming the system and consequently adequately supplying affordable medicinal products with a minimum of acceptable risks.
There is evidence that many firms try to take advantage of off-label use to bypass the aforementioned regulatory frameworks and not follow the stringent, lengthy and costly procedures for the extension of a MA.Footnote 9 Abbott and AyresFootnote 10 observe that in the USA, for the year 2012 alone, pharmaceutical companies’ marketing amounted to $21 billion aiming specifically at supporting physicians’ off-label prescribing practices, and nearly half of some medicinal products’ sales revenues, such as Botox® (botulinum toxin), today come precisely from off-label use.Footnote 11
Nonetheless, in other contexts, pharmaceutical firms might perceive how a regulatory framework based on the necessity of a MA may sometimes unintentionally encourage them to abstain from filing an extension to their MAs in order for their profits to be greater, at the expense of higher prices paid by society and fewer options of products available to patients. Regarding this rent-seeking behaviour, Haughey states that “concerns have been voiced around the potential risks of pharmaceutical companies exploiting the system to prevent access to cheaper alternatives in order to boost their profits”.Footnote 12 Recently, many governments have become aware of this undesired incentive created by their regulatory systems that end up stifling cost-effective treatments. These governments developed different policy tools involving, among other features, institutionalised off-label use of medicines to solve the matter. Not surprisingly, but contradictory to the previous entrepreneurial position that promotes off-label use, pharmaceutical companies stand against policies involving off-label prescription that allow affordable access to effective treatments. Accordingly, the industry argues the unlawfulness of any government measure that officially endorses off-label practices.Footnote 13 The main argument raised by the industry would be the weakening of the requirement for a MA created incontestably to protect patients. The so-called Avastin® case, which had global repercussions, illustrates this situation. Indeed, in the aftermath of the Avastin® case, FranceFootnote 14 and ItalyFootnote 15 amended their national legislation to take into account economic reasons for permitting off-label use.
II. Problem and methodology
The Avastin® case has produced effects throughout the world, and many countries have adopted different measures regarding the off-label use of medicines in an attempt to prevent the misuse of MAs by pharmaceutical companies as an instrument to unjustifiably increase their revenues through higher prices of medicines paid by consumers and a greater burden on governments’ spending. This article aims to compare the regulations in selected EU countries with specific provisions regarding off-label use in an attempt to identify concrete solutions implemented by them regarding this matter, including how, if at all, the Avastin® case resulted in changes in their legal norms. For these reasons, France, Italy and Germany, which are some of the EU Member States with specific provisions regarding the off-label use of medicines, were chosen to be closely examined. This article first explains the Avastin® case. Then, it investigates the scholarly literature regarding the risks of the off-label use of medicines. The fourth section presents the main decisions of the Court of Justice of the European Union (CJEU) on the issue and the corresponding regulation in each country. The following section then presents an economic analysis of the regulations and pinpoints the main findings. The conclusions are not supposed to be definitive, but contributive for discussions and, hopefully, future advancements in the regulation of the off-label use of medicines to conciliate through the law, where possible, and of course depending on the peculiarities of each legal system and the public health aspect along with the economic aspect. This effort argues concomitantly that the pharmaceutical industry continues investing in research and development (R&D), that patients have more access to safer products due to authorised repurposing of drugs, that medicines become affordable and that governments may appropriately reallocate the savings from their limited financial resources to foster health policies in problematic areas deemed relevant.
The research question is descriptive, and the data collection involves miscellaneous documentary records such as national regulations, judicial decisions, policy documents and academic writings. The qualitative nature of the analysis entails comparative research in order to identify the legal solutions adopted in each locality. A discursive analysis of the abovementioned documents allows for the interpretation of their basic ideas and possible implications on drug development and access to healthcare. The main contribution to further research resides in the employment of an economic analysis of lawFootnote 16 as a theoretical framework, through which basic concepts of economic theory are applied for the examination of the sorts of incentives that are potentially created in the long run by the aforementioned regulations, including the positive (pro) and negative (con) aspects of each one of them. Many legal norms are created ex post, which involves looking back at a problem after it has occurred to design a possible solution. After the Avastin® case, some governments passed legislation to enable off-label practices on the grounds of economic reasoning to enhance patients’ access to healthcare, avoid regulatory gaming and improve the management of scarce resources. However, this might come at the cost of slowing down innovative activities. Thus, it is crucial to have simultaneously an ex ante perspective, meaning here a prospective identification of not only the intended effects of legal norms, but also the unintended ones that the very same measures may unwittingly produce. Such an analysis assumes a theory of rational choice in which individuals are self-interested, react to legal norms and alter their behaviour to maximise their utilities (or profits, when it comes to firms) according to the law’s incentive effects.
III. Limitations of research
Due to the descriptive nature of the research, the economic insights to the problem of off-label use and examined regulations are solely based on existing economic R&D and business models of the pharmaceutical industry; for this reason, they remain to be empirically tested. Similarly, due to the lack of quantitative analysis, the discussions about the welfare implications are also limited. Moreover, the off-label use of medicines could be studied from different legal perspectives (eg existing EU regulations concerning orphan medicinal products and issues arising from the off-label use of medicines during pandemics, such as hydroxychloroquine in the current COVID-19 situation), which are missing from this article because of its restricted scope.
IV. Avastin® case
Genentech is a subsidiary of F. Hoffmann-La Roche in the USA. It produces both Lucentis® and Avastin®, whose active ingredients are, respectively, ranibizumab and bevacizumab. Despite their biochemical similarity, they are approved in many jurisdictions for different therapeutic purposes.Footnote 17 Usually, Lucentis® is registered as a medicine for the treatment of ophthalmologic diseases (eg age-related macular degeneration, known as AMDFootnote 18 ), while Avastin® is licensed for oncological diseases (eg colon and lung cancers).
In 2003, Genentech signed a licensing agreement with Novartis granting exclusive rights to it for the commercial exploitation of Lucentis® outside the USA and Mexico.Footnote 19 An essential aspect is the low cost of bevacizumab, which is notoriously dozens of times cheaper than the approved ranibizumab. For this reason, there is a correlation between the cost per treatment and the choice of product. Since 2005, there has been extensive off-label use of Avastin® as an affordable alternative of therapy in various parts of the world for many patients who seek to preserve their vision.Footnote 20 However, Roche has neither undertaken studies to compare the effectiveness between those products nor submitted an extension of bevacizumab’s license to any national regulatory authority for its intravitreal use in AMD treatment – far from it. Together, Roche and Novartis have raised debatable legal obstacles and safety concerns about analogous practices, adding that off-label prescribing decisions should be based on a patient’s medical need rather than economic aspects. This is a strong statement that, alone or out of proper context, could hardly be criticised.
Given the industry’s lack of interest, a variety of public research funds, notably in the UK and the USA, were invested on behalf of public health to evaluate the equivalence of safety and efficacy between the two drugs for the treatment of AMD.Footnote 21 The conclusion from the clinical results accumulated throughout the years favoured bevacizumab being equally safe and effective as ranibizumab for this indication.Footnote 22
For its off-label use in ophthalmologic diseases through direct eye injections, Avastin® must be split into smaller doses via dilution, and such a procedure presupposes appropriate sterile environments; otherwise, risks of product contamination and corresponding infection of patients with disastrous harm to their health may occur.Footnote 23 Nonetheless, the safety questions raised by the industry regarding Avastin® also included reasoning of a different nature intrinsically related to controversial adverse drug reactions (ADRs) to Avastin® in the treatment of eye diseases, and these arguments continued to be advocated even after the publication of clinical results indicating its similar effectiveness to Lucentis®. It seems the emphasis given by Roche and Novartis to ADRs reputedly arising from the off-label use of Avastin® had more of the objective of hindering the prescription of bevacizumab for the treatment of AMD rather than a robust empirical basis, since the referred risks were statistically very low.Footnote 24 On this matter, the Autorità Garante della Concorrenza e del Mercato (AGCM) concluded that Roche and Novartis colluded to artificially differentiate between Avastin® and Lucentis® by manipulating the perception of the risks of using Avastin® for ophthalmology.Footnote 25 This action resulted in augmented expenses to the Servizio Sanitario Nazional (SSN), estimated at €600,000,000 per year.Footnote 26 The CJEU had a similar understanding of the arrangement kept between the two undertakings. In Case C-179/16, when the Court analysed the issue in light of EU law, it asserted that the dissemination of misleading information relating to ADRs associated with Avastin® in a context of scientific uncertainty for the treatment of diseases not covered by a MA constitutes restrictions of competition by object.Footnote 27 The anti-competitive practice was aimed at influencing the conduct of third parties in reducing demand for Avastin®.Footnote 28 Roche and Novartis have always refuted these accusations.
V. Risks of off-label uses
The academic literature identifies myriads of potential drawbacks and advantages of the off-label use of medicines, which would be a double-edged sword having both unfavourable and favourable consequences that sometimes compete with one another.Footnote 29 Hence, underlying off-label practices, there is a trade-off between social costs and social benefits over a drug’s lifetime, but the total effect on social welfare seems ambiguous.Footnote 30
1. Disadvantages
The main problem associated with off-label use is the information deficit about a product’s efficacy and, therefore, the prospect of exposing patients to higher risks, whose adverse health outcomes could remain unknown to public authorities if an implemented pharmacovigilance system reveals itself either to be malfunctioning or deficient in the necessary oversight mechanisms. Accordingly, off-label practices could pose a threat to public health in general because extensive uncontrolled use conflicts with any centralised drug approval system based on the conditioning of the marketing of a product to scientifically valid and statistically significant evidence indicating that its potential benefits are likely to outweigh its potential risks.Footnote 31 Regardless of a common feature existing in many jurisdictions when it comes to medical practice not being subject to the regulation of medicines, an extensive off-label use would still undercut the public expectation that there has been a proper evaluation of a product’s safety and efficacy.Footnote 32 Harm to a patient manifests itself in various ways, the mildest being an opportunity cost of receiving a wrong treatment and the worst being the loss of life.Footnote 33
Moreover, such harm may result from an off-label medicine prescribed by physicians who relied on journal articles that sometimes do not provide adequate, neutral studies, because partial stakeholders with strong economic interests (ie the pharmaceutical industry) may have sponsored them and hidden or misrepresented data in the scientific literature.Footnote 34 PlateFootnote 35 mentions how the selective publication of research with favourable outcomes may cause over-prescription of off-label medicines. Similarly, off-label use would represent a threat to a patient’s safety in particular due to serious adverse events resulting from a medication when its use is different from the treatment for which the medicine has been approved. VranckenFootnote 36 reports that 73% of off-label prescriptions in the EU lack evidence of clinical efficacy. Arguably, one could say that this may affect the validity of informed consent given by a patient. One should not forget that there is asymmetric information between the patient and the physician. In this case, some may think that this is a violation of a patient’s autonomy, and if the purpose is to gain general knowledge regarding off-label use for a broader population, then the medical practice could characterise de facto a therapeutic experiment instead of an innovative therapy, raising many legal and ethical questions involving human research.
Nevertheless, the risk of liability arising out of off-label prescriptions (or sometimes due to the lack of off-label prescriptions reputed to be necessary) that supposedly infringed on a patient’s right to physical integrity is a constant menace to physicians. RaposoFootnote 37 mentions studies indicating that healthcare professionals do not even report a relevant percentage of serious ADRs because they fear legal, disciplinary and ethical consequences. Another negative aspect associated with off-label use is the increase in healthcare costs.Footnote 38 This problem happens either when a more expensive off-label product lacking scientific evidence for a specific therapeutic purpose is employed and reimbursed in detriment of a cheaper on-label product or when an insurer refuses to cover the off-label treatment costs, and as a result, the out-of-pocket expenses of patients are enhanced.Footnote 39 Then, control of off-label use could reduce wasteful spending, improving not only the quality but also the efficiency of healthcare services. According to Todd,Footnote 40 a survey of physicians conducted at the University of Chicago Medical Center found that the respondents could identify the regulatory approval status of a medicine just over half the time. The same unawareness of prescriptions for the off-label use of medicines was reported by Plate,Footnote 41 HalabiFootnote 42 and Lemmens and Gibson.Footnote 43 This finding would demonstrate that physicians often prescribe an off-label medicine with misconceptions about the regulatory approval of, or level of evidence supporting, a medicine’s indication, which could compromise a patient’s safety.
Furthermore, PlateFootnote 44 highlights another negative aspect of off-label use in terms of how it works as a marketing method to circumvent the licensing process by the MA holders, despite them being expected to apply for an extension. StaffordFootnote 45 clarifies how this may have a damaging effect on innovation, since the industry would seek the easiest and least costly indications for their new drug applications. Mulder, van Asseldonk and de BoerFootnote 46 claim that innovation is hindered by continuous off-label use and the use of unauthorised medicines because the considerable financial investments in performing scientific research, including clinical trials, are unlikely to be made if there is no foreseeable return on investment. Thus, off-patent drugs would represent an insurmountable limit for drug repurposing. HalabiFootnote 47 adds that pharmaceutical companies may engage in supplying misleading information in order to promote off-label use by providing biased information about their products, since they have a direct financial stake in the success of their products. Moreover, the communication between industry and payers, prescribers and patients may not be transparent, which makes it very difficult for public authorities to regulate them and identify possible abuses being committed. RodwinFootnote 48 and StaffordFootnote 49 argue that manufacturers are encouraged to use illegal off-label promotion due to expected greater revenue from the increase in product sales, which exceeds any potential subsequent penalties that are perceived to be insufficiently pecuniary to induce significant changes in marketing practices.
2. Advantages
The literature also points out that there are many advantages related to the off-label use of medicines. If there is strong evidence indicating that the benefits of a determined off-label use of a product outweigh the risks, then declining to treat the condition poses even greater dangers than the off-label prescription does in itself.Footnote 50 Abbott and AyresFootnote 51 explain how off-label use may not just represent the single possible treatment available for patients who cannot rely for some reason on authorised medicines, but also represent a path to innovation through which additional indications for an authorised medicine are discovered and a subsequent extension is filed by a company that has an interest in its commercialisation. In other words, the regulatory approval process may often lag behind scientific advancements and the presence of high-quality evidence, which is why an adequate control of off-label use could induce the desired repurposing of drugs.Footnote 52 Following on from this idea, HolleyFootnote 53 ascertains that off-label use allows manufacturers to invest more money in R&D. Another advantage she mentions regarding off-label use comes from the fact that pharmaceutical firms often choose to obtain approval for limited uses of a drug, so the label for a particular medicine would not list all medical indications for its use, despite the existence of proper clinical trials or other evidence of efficacy for some of them. Lemmens and GibsonFootnote 54 affirm that off-label use accounts for the complexity of medical practice, since it seems infeasible to label a drug for every possible use.
Moreover, off-label use enables innovation in clinical practice, too, because physicians could look for creative solutions that are more suitable for their patients, who may thereby gain earlier access to medications, notably when other drugs are not working or prove to be suboptimal for their treatments. Thus, off-label use avoids the opportunity costs of patients not having access to cutting-edge medicinal products and technologies. Ethical arguments also favour the off-label use of medicines due to situational supply gaps and medical assistance for patients without adequate treatment options, such as disruption in the manufacturing of a product, the unreasonable withdrawal of a product from the market solely due to commercial purposes or in cases of rare diseases.Footnote 55 Many regulatory agencies operate in legal systems that separate regulation of medicines from doctors’ freedom to prescribe. However, they still acknowledge the importance of off-label use, which could even become the standard of care for illnesses in medical practice.Footnote 56
Furthermore, off-label use may lower healthcare costs and allow for optimisation of government spending through a comparison of the economic consequences of a drug’s results with other low-priced drugs for which there is scientific evidence supporting the efficacy of its off-label use in the treatment of the same diseases. Recently, many countries, including some EU Member States, have adopted programmes sanctioning off-label use as a cost-containment measure.Footnote 57 Building on this idea, if an off-label use has strong evidence supporting its use and is even cheaper than other therapeutic alternatives, prohibiting it is likely to decrease society’s welfare.
Depending on one or more of the aspects listed above concerning off-label practices, many proposals, ranging from state intervention to market solutions, are found in the literature in a bid to either solve a potential problem or catalyse a pursued benefit arising out of off-label use. Although there are voices in favour of banning off-label use,Footnote 58 the majority of opinions advocate merely changing the regulation of medicines in order to restrict or to stimulate off-label use within certain admitted boundaries.Footnote 59
VI. Comparison of systems
The principle of conferral denotes that the EU competences fall within the strict limits outlined by the treaties that form its constitutional basis, with the other competences remaining with the Member States.Footnote 60 In this respect, Article 168 of the Treaty on the Functioning of the European Union (TFEU) provides that public health is a competence shared between the EU and the Member States. Nonetheless, consonant with the same legal provision, Member States retain exclusive competence on the definition of their health policies and for the organisation and financing of their health services,Footnote 61 which includes reimbursement for therapeutic treatments.
Bearing that in mind, the pharmaceutical policy is primarily determined at the national level of the EU Member States within their health systems.Footnote 62 Accordingly, many EU Member States have assimilated a cost-effectiveness analysis amid practices in health technology assessment (HTA)Footnote 63 as a condition in public decision-making for either a direct provision of medicinal products or their adoption within reimbursement programmes to be publicly funded.Footnote 64 As of today, only some countries in the EU, including France, Italy and Germany, have adopted regulatory frameworks that allow for reimbursement by public payers of medicines for off-label uses, which encourage such prescriptions by physicians, regardless of approved alternatives available in the market.
The EU legislationFootnote 65 regarding pharmaceuticals brings neither regulation nor harmonisation on off-label use, whose existence is merely acknowledged in the EU through Directive No. 2010/84/EU that amends Directive No. 2001/83/EC as regards pharmacovigilance and imposes on MA holders a responsibility to provide any information of products’ use outside their MAs.Footnote 66
Nonetheless, there is case law at the CJEU regarding the interpretation of the European pharmaceutical regulatory framework.
1. Decisions rendered by the CJEU
In Case C-185/10, European Commission vs. Republic of Poland, the CJEU decided that the exemption under Article 5(1)Footnote 67 from the requirement for a MA prescribed by Article 6(1)Footnote 68 , both of Directive 2001/83/EC, did not include economic reasoning for the stability of Member States’ healthcare insurance schemes, since such a purpose was not expressly listed among its objectives. Based on this reasoning, the CJEU affirmed the referred derogation of the provision that prescribes the necessity of a MA encompasses only situations in which doctors conclude the state of health of a patient demands the administration of a medicinal product for which an authorised equivalent does not exist or is unavailable on the market under consideration. Then, the Court made it clear that a country’s legal norm falls outside the derogation from the requirement for a MA set down by Article 6 of Directive 2001/83/EC if unlicensed drugs are permitted when there are already medicinal products authorised and available on the national market with “the same active substances, the same dosage and the same form as those which the doctor providing treatment considers that he must prescribe to treat his patients”.
However, recently, the CJEU adopted a different standpoint in Case C-29/17, in which the Consiglio di Stato in Italy requested a preliminary ruling regarding the interpretation of Articles 3(1), 5 and 6 of Directive No. 2001/83/EC in the context of the proceedings between Novartis, Roche and the Agenzia Italiana del Farmaco (AIFA) involving the entry of Avastin® onto the list of medicinal products reimbursed by the SSN for the off-label treatment of AMD. In effect, the Court held that the principle of a mandatory MA does not preclude the national measures implemented by Italy concerning the repackaging of Avastin® and its subsequent off-label use for ophthalmological indications. Moreover, this time, the Court acknowledged that the derogation of a MA was not strictly based on individual criteria asserted by doctors on a case-by-case rationale to prescribe personal treatments and regardless of a state’s financial reasons. On the contrary, the economic assessments that prompted the decision made by the Italian government to reimburse an off-label use were not ignored because some conditions related to pharmacovigilance and were necessary to safeguard patients’ health were met.Footnote 69
2. Regulation in France
In 2011, after the Médiator® scandal,Footnote 70 Law No. 2011–2012 included Article L. 5121-12-1 in the French Code de la santé publique, creating the Recommandations Temporaires d’Utilisation (RTUs), whose objectives are safer off-label utilisation, improvement of knowledge regarding the efficacy of off-label uses and encouragement for pharmaceutical companies to file requests for extensions of MAs.Footnote 71
From the current wording of the abovementioned legal provision and by strictly analysing the RTUs,Footnote 72 a medicinal product may only be prescribed in France outside its MA under the following conditions:
(1) The Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM) issues a RTU for the intended unlicensed indication, regardless of MA holders being previously consulted.
(2) The RTU has a maximum period of three years (renewable).
(3) Prescribers must inform patients about non-compliance with the MA, the existence of a RTU and the risks involved and benefits likely to be obtained with the medicinal product.
(4) MA holders or other licensed companies must conduct a patient monitoring protocol, which may contain a commitment for an extension of the MA to be filed within a specified period, pending the results on safety and efficacy obtained during the period of three years, whereas they bear no legal obligation to do so. Nevertheless, the referred firms must follow up with the patients and report ADRs to the ANSM, bearing all costs involved in the corresponding procedures, and concomitantly restrain themselves from marketing other off-label uses.
The French national healthcare insurance scheme, based on a HTA made by the Haute Autorité de Sante (HAS), may reimburse the medicines for the unlicensed indication if there is a valid RTU.Footnote 73 However, the ANSM may modify, suspend or withdraw a RTU if new circumstances arise.
In the aftermath of the Avastin® case, the RTU regime was amended to consider economic reasons for permitting off-label use. As reported by Degrassat-Théas et al,Footnote 74 the French authorities identified the possibility of the RTUs preventing the undesired use of MAs by pharmaceutical firms as an anti-competitive practice and market segmentation tool to unjustifiably increase their revenues, leading ultimately to higher prices of medicines paid by consumers and an augmented burden on governments’ spending. Hence, initially and contrary to the availability of an authorised equivalent product on the French market, the new phrasing of Article L. 5121-12-1 adopted in 2012 expressly admitted the avoidance of a significant financial impact for the national healthcare insurance as one of the grounds for the issuance of a RTU alongside the fulfilment of other requirements. It did not take much time for the lawfulness of Article L. 5121-12-1 to be questioned given EU law, particularly the decision rendered by the CJEU in European Commission vs. Republic of Poland. For this reason, another amendment to Article L. 5121-12-1 was made in 2014 to fit within the exact contours outlined by the CJEU’s judgment. As mentioned in Section VI.1, though, when the CJEU decided Case C-29/17 a few years later, it acknowledged to some extent the legality of the economic reasoning for the reimbursement of the off-label use of Avastin® in Italy.
Today, Article L. 5121-12-1 does not mention explicitly financial reasons. It states that the ANSM may issue a RTU conditional to the non-existence of a medicine with the same active ingredient, dosage and pharmaceutical form, which is different from the non-existence of an approved alternative for the same therapeutic indication. When it comes to Avastin® and Lucentis®, France has repeatedly sustained that the active ingredients are not absolutely identical. However, Avastin® also illustrates the relevance of the economic feature present in the RTU issued by the ANSM in 2015 to officially allow its off-label use, since the expenditures of French social security organisations due to reimbursements for ranibizumab reached €430 million for the year of 2013 alone.Footnote 75 As a result, and bearing in mind that the cost of Avastin® is only a fraction of the cost of Lucentis®, it is not preposterous to infer that the replacement of ranibizumab by bevacizumab via off-label prescriptions within a RTU appropriately given by the ANSM in reality entails substantive savings, which were implicitly desired by the French government. The fact that France excluded Lucentis® from medicine coverage and replaced it with Avastin® corroborates this idea and concomitantly provides stronger incentives for bevacizumab’s off-label use.Footnote 76
3. Regulation in Italy
In Italy, the first explicitly legal mention of off-label use came through Law No. 94/1998, known as “Legge Di Bella”.Footnote 77
Following Article 3, paragraph 1, of Law No. 94/1998, when physicians prescribe a medicinal product, they should observe the therapeutic indications, routes and methods of administration provided for by the MA issued by AIFA. However, the Italian legislation also conceded exceptions for lawful off-label uses. Among them, paragraph 2 states that, if the existing products with authorised therapeutic indications do not suffice and leave a medical need unmet, physicians may prescribe off-label, under their responsibility (ie risk of liability), contingent on informed consent and the data available in internationally accredited scientific publications that should underpin their clinical decisions. A few years later, Law No. 244/2007 escalated the requirements for off-label use by imposing the need for at least Phase II clinical studies.Footnote 78 Theoretically, this condition represents a higher threshold to be overcome in terms of safety and efficacy in order to support the intended indication because it is not just any kind of study or data that may be admitted as evidence. However, a Phase II clinical study does not provide the same level of confidence regarding the safety and efficacy of a medicine in comparison to a Phase III clinical study, which involves a much larger number of individuals, usually at various research centres in different countries, and there is a double-blind test of the new drug against a placebo or an “active comparator” (ie an actual medicine instead of a placebo).Footnote 79
Nonetheless, Law No. 94/1998 regulates only off-label prescriptions paid out-of-pocket by patients.Footnote 80 Additionally, Law No. 648/1996 provides for the possibility of the SSN reimbursing or supplying determined types of medicines both within and outside of their MA conditions.
In the beginning, Law No. 648/1996 limited reimbursements for off-label use to the non-existence of approved therapies in the national market and, concomitantly, as long as one of three conditions was satisfied. More precisely, prescriptions for off-label uses would be reimbursed by SSN if they involved innovative medicines authorised in other states, but not in Italy; if medicinal products were undergoing clinical trials, but not yet authorised; or if they were used for a therapeutic indication other than the authorised one.Footnote 81 However, precisely to enable the large-scale and cheaper use of Avastin® in the treatment of AMD, an amendment brought by Law No. 79/2014 made reimbursements for off-label uses legally possible even if there were other products with valid MAs in the Italian market.Footnote 82 In other words, Italy enacted legislation to include economic aspects as one of the reasons for off-label use to be admitted by the government if there were a lack of available medicines explicitly labelled for the same indication.Footnote 83 Indeed, paragraph 4-bis was inserted into Law No. 648/96 to enlarge the situations in which SSN could reimburse off-label use, including an economic assessment as a parameter. This measure was conceived in the context of recent decades in which Italy aimed to limit public spending in the pharmaceutical sector and to secure the financial sustainability of its health system through proper planning and rationing in the provision of medicinal products.Footnote 84
Italy has not created an agency to be in charge of HTAs, which for pharmaceuticals is a responsibility of AIFA alongside the issuance of MAs, and at the moment there are three fundamental classes of medicines: class A, partially reimbursed by the SSN; class C, non-reimbursable; and class H, which is delivered only within hospitals under specialist supervision.Footnote 85 Not just pharmaceutical firms but also patient associations, scientific societies, healthcare companies, universities and hospitals, among others, may submit an application to AIFA for the inclusion of a drug in the reimbursement scheme of Law No. 648/1996.Footnote 86 For that purpose, the request must contain the following:
(1) A scientific report on the pathology, representing its severity and the absence of a valid therapeutic alternative;
(2) The description of the proposed therapeutic plan;
(3) Data on the cost of treatment per patient (monthly or per therapeutic cycle);
(4) The medicinal product’s authorisation status in Italy and abroad, with specifications from the manufacturer or supplier;
(5) Available documentation such as scientific publications, results of Phase I and II clinical studies, reference to the quality and safety of the medicine and information concerning ongoing clinical trials.
Then, AIFA analyses the request involving the intended off-label use. If AIFA concludes in its favour, in consonance with Law No. 648/1996, the medicine is inserted into one of the so-called “648 lists” that are periodically reviewed and subject to pharmacovigilance in order to identify, for example, ADRs. Observing the applicable rules, AIFA has approved a few reimbursements within SSN for the off-label use of cheaper medicines, but some authors highlight the threat that such a policy may represent to the MA system pursuant to Article 6 of Directive 2001/83/EC, which could be undermined and rendered ineffective.Footnote 87
4. Regulation in Germany
In Germany, judicial decisions have led to changes in the legal treatment of off-label drugs. The Fifth Book of the German Social Code, Sozialgesetzbuch (SGB V), did not originally admit reimbursements by public health insurance schemes, which are primarily financed by payroll taxes, for any use in disaccord with a medicinal product’s MA. However, the Federal Social Court, Bundessozialgericht (BSG), and the Federal Constitutional Court, Bundesverfassungsgericht (BverfG), gave new contours to the requirements for the right to receive a medicine under the rules of the German statutory health insurance funds,Footnote 88 the gesetzlichen Krankenversicherung (GKV).Footnote 89
In 2002, when the BSG rendered a decision in Case B 1 KR 37/00 R involving the medicine Sandoglobulin®, the Court set a new benchmark against which the obligations of social health insurance could be extended to include the supply of off-label drugs in order not to withhold patients from having access to treatments deemed indispensable.Footnote 90 At that time, the following three conditions were established:Footnote 91
(1) It must involve a severe illness that has a lasting negative impact on an individual’s quality of life.
(2) There is no conventional treatment option.
(3) The off-label use of the medicine has a reasonable prognosis of success.
A few years later, in 2005, the BverfG delivered in Case 1 BvR 347/98 the so-called “Nikolaus” decision,Footnote 92 giving a constitutional interpretation on the law governing the catalogue of benefits of the GKV, which should fund any treatment as long as some criteria are met. According to the BverfG, the right to benefits under German statutory health insurance should be understood in consonance with the Grundgesetz (GG), the German Basic Law, notably the fundamental rights to life and physical integrity, combined with the principle of the welfare state.Footnote 93 The BverfG made it clear that judicial decisions may determine that GKV pays for the off-label uses of medicines when a patient suffers from a life-threatening illness, no alternative treatment is available and the intended treatment has a “not entirely remote prospect of curing or noticeably improving the condition”.Footnote 94
According to § 35c(1) of the SGB V, an expert commission may be established by the Bundesinstitut für Arzneimittel und Medizinprodukte (BfArM) to scientifically assess the off-label use of drugs and make the appropriate recommendations on the matter to the Gemeinsame Bundesausschuss (G-BA), a Joint Federal Committee in charge of determining the benefits package of the GKV.Footnote 95 In other words, the G-BA decides – based on a HTA by the Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG) as well – whether a medicinal product may be included in part A of Appendix VI of the pharmaceutical directive, which allows its off-label prescription by physicians and the reimbursement of its costs by statutory health insurance funds.Footnote 96 By contrast, if the product is included in part B of Appendix VI, it cannot be prescribed off-label. Despite the guidelines issued by the G-BA having binding effects for physicians, hospitals and social health insurers in Germany, the MA holders must give their consent concerning the off-label use. Through this requirement, the German government makes it possible to hold the MA holder liable for damages that originated from off-label uses.Footnote 97 Apparently, the regulation of the off-label use of medicines in Germany did not suffer any changes due to the Avastin® case. So far, the G-BA has not included the off-label use of bevacizumab for the treatment of AMD in the referred Appendix VI, albeit it has been usual for insurers to have contracts with medical care suppliers in order to stipulate the financial compensation in such cases, since the reduction in costs are in their interest.Footnote 98
VII. Economic analysis of regulations in the EU Member States
Due to the disadvantages and advantages of the off-label use of medicines (see Section V.2), some EU countries (eg Germany) have adopted specific provisions to regulate such use. Moreover, following the Avastin® case, some governments (eg France and Italy) passed legislation to enable off-label practices on the grounds of economic reasoning so as to enhance patients’ access to healthcare, avoid regulatory gaming and improve the management of scarce resources. However, this might come at the cost of slowing down innovative activities. Thus, an economic analysis of the examined regulations provides an identification of both ex ante and ex post perspectives, which mean, respectively, the understanding of the intended effects of legal norms and the unintended ones that the very same measures may unwittingly produce because of their potential effects on the demand side and the supply side of the pharmaceutical market. There are arguably positive and negative aspects regarding the access of a population to healthcare and the incentives (or disincentives) created for innovation.
Firstly, controlled off-label use of medicines through the employment of RTUs in France, the “648 Lists” in Italy and the recommendations issued by G-BA in Germany might prevent pharmaceutical companies from gaming the requirement for MAs, as apparently was the case with Avastin®; however, it would be necessary to analyse the impact of the referred regulations on the market in order to draw such a conclusion with confidence. Theoretically, the referred tools could cancel out any possible incentive that makes some firms not file an extension to a MA seeking to inflate their sales revenue through a segmentation of the market from a stricter view of the MAs. Indeed, the French and Italian legal norm changes (the new phrasing of Article L. 5121-12-1 adopted in 2012 and Law No. 79/2014, respectively) were made precisely because of the Avastin® case.
Bearing in mind that the demand curve is the relationship between the price of the good and the quantity that consumers are willing to pay, a movement along the curve represents a change in the quantity demanded of the good caused by a change in price.Footnote 99 This movement’s occurrence depends on the price elasticity of demand (responsiveness of demand after a change in the price of a good, which takes into account the availability of substitutes and the necessity for a good). In other words, a priori, the lower the price, the higher the demand is expected to be for price-elastic goods and services. Although medicinal products tend to be relatively inelastic, some studies show that healthcare services may be more price-elastic than imagined,Footnote 100 and as a result, people would not seek treatment due to high costs, despite their sickness. Thus, secondly, the above mechanisms adopted in Germany, France and Italy may enhance the treatment options for patients after the existing scientific evidence indicates that a medicinal product has reached a minimum standard of safety and efficacy that justifies its off-label use, conditional on effective pharmacovigilance that continuously gathers data and, if necessary, allows for the revision of the decision. Moreover, those mechanisms could also result in substantial cost reductions for each country’s national healthcare systems because of the lower price of off-label products than existing medicines with MAs. However, any MA extension must occur based on sufficient evidence of safety and efficacy and never based on financial reasons, which should not be the sole nor the ultimate goal of off-label use. Nevertheless, if an efficacious medicine becomes affordable, inasmuch as a State’s financial resources employed in health are limited, then more patients could receive proper treatment, and a broader range of diseases could be dealt with or even other challenges involving the healthcare system could be tackled with the savings and means that could be reallocated.
Apart from this, in a worst-case scenario, instead of creating incentives for the filing of extensions, those very same mechanisms that foment off-label use regardless of the availability on the market of approved medicinal products could undermine the regulatory frameworks within which they were inserted and that have the requirement for a MA as a core idea. That is, if off-label uses become the prevailing practice, licensing would no longer be a mandatory requirement. It would be pointless to invest in drug repurposing and to submit an extension.
Pindyck and RubinfeldFootnote 101 highlight that any firm seeks profit maximisation, which happens in the short run when marginal revenue is equal to marginal cost. Then, off-label uses could drive prices below a socially efficient marginal cost, compromising third parties’ incentives to innovate. In this case, off-label use would create negative externalities for future entrants into the market, who could be discouraged from investing in R&D for more effective treatments of indications that already have cheaper off-label alternatives. Assuming that firms invest increasingly in innovation if they expect higher profits from successful discoveries,Footnote 102 then conversely, the lower the profitability due to the competition with off-label uses, the fewer the innovative activities. Similarly, Bhattacharya et al explain how innovation occurs when pharmaceutical companies tilt their research towards areas of high profit opportunity, and consequently, policy decisions that encourage R&D by reducing marginal costs are likely to induce more innovation.Footnote 103 Hence, a demand-side policy based on more affordable off-label medicines could negatively affect innovation, as the expected market size for a new product with higher costs would decrease (less expected marginal revenue). In the long run, the number of therapeutic discoveries would diminish, reducing the supply of novel treatments and deadweight losses in the pharmaceutical market. Among other factors that prevent this from happening, off-label use must remain exceptional, and the implementation of other demand-side and supply-side policies (eg public investment in R&D and tax deductions for scientific research) could offset losses to producers and reduce marginal costs. However, off-label practices fostered by states may still have a prevailing negative effect on competition and the economic interests that drive the industry’s behaviour. Moreover, the problem would be aggravated close to the time of patent expiration, since competition with generic manufacturers that provide substitutes at lower costs would begin, and investments in high-cost research for the repurposing of drugs at this particular moment would be hindered to a greater degree by the imminence of the off-label practices that comprise free-riding (spill-over effect).
Bhattacharya et alFootnote 104 also observe that any regulation aiming to distinguish between safe and unsafe medicines is never perfect. Depending on the standard adopted to issue a MA (or extension) in terms of whether it is more or less restrictive, there will always be type I and type II errors,Footnote 105 respectively. Taking into account off-label uses and considering the examined countries, only Italy has set a clear threshold (at least Phase II clinical studies) for allowing off-label medicines within reimbursement programmes. Therefore, the Italian model could be perceived of as being more severe and potentially resulting in more type I errors, leading to a decrease in the supply of cheaper effective medicines.
In France, the absence of a RTU prohibits the industry from stimulating off-label use for unlicensed indications as a marketing strategy to sell more products and increase revenue without having to observe the stringent regulatory proceedings that include the submission of a MA extension preceded by necessary but costly clinical trials. Compared to the other countries, the French system may create stronger incentives for filing extensions to MAs by firms that have a legitimate economic interest in increasing their profits through the repurposing of their drugs.
Lastly, in Germany, the off-label recommendations issued by the GB-A are binding, albeit the MA holders must agree with them. This condition entails a balanced decision with different stakeholders’ collaboration, considering that the GB-A comprises members from various top organisations of health insurers and physicians, whose acts are supervised by the German Ministry of Health. Consequently, it gives more legitimacy to MA holders’ liability for problems resulting from off-label uses. While firms’ consent renders off-label use as less of a threat to the requirement for MAs in Germany than in Italy and France, it also acts as an obstacle. The MA holders are likely to agree to off-label uses only when they are of interest.
VIII. Conclusion
In conclusion, recently, many governments have implemented the controlled off-label use of medicines as a tool combined with reimbursement decisions, among other policies, to prevent pharmaceutical firms from gaming regulatory systems. It is vital to separate off-label practices that are supported by strong scientific evidence from other similar practices. There is neither regulation nor harmonisation on this matter at the EU level, and different states have implemented varied approaches to off-label uses of drugs. This article compared some EU countries’ approaches in this area. France adopted RTUs through Article L. 5121-12-1 in the French Code de la santé publique; in Italy, drugs are included in lists according to Law No. 648/1996; and Germany issues binding directives via the G-BA. All off-label policies involve, to some extent, economic reasoning, since they imply reimbursements by national health systems or publicly funded health insurers, or direct provision at public hospitals.
An economic analysis of the law reveals positive and negative aspects of off-label policies in general and for each of the national regimes individually considered, given their particularities. Nonetheless, off-label use is a reality. The solution is the adoption of measures concerning such practices in order to reduce the risks associated with them, providing transparency among the different stakeholders in order to avoid misleading promotion that could harm patients and providing the right environment in which firms can organise their activities. The idea of regulatory systems based on MAs, undoubtedly created to safeguard public health, should not be used to hinder the controlled off-label use of medicines by national health systems in a way that guarantees more access to safe and efficacious treatments for a greater share of the population. It makes no sense to allow off-label prescriptions for individual uses, but not for reimbursement schemes or for direct provision through public funds that enhance health access, regardless of the existence of approved products that are available in the market for the same therapeutic indication because certain evidentiary thresholds have been fulfilled.
Finally, it is advisable to adopt supply-side incentives for innovations such as public investment in R&D, tax credits and tax deductions for scientific research in order to stimulate drug discovery and repositioning and/or mechanisms that enforce patent protection over new indications of off-patent drugs against off-label uses.Footnote 106
