DP18357 Strategic Submissions: A Cross-Country Analysis of Supplemental Drug Approvals
Off-label use regulation has the potential to change pharmaceutical firms' behavior and - consequently - affect patient welfare. We investigate the impact of two changes in off-label regulation on pharmaceutical firms' behavior in seeking formal marketing approval for supplementary uses. In 2012, a US court decision protected truthful off-label promotion, providing pharmaceutical companies more leeway to promote off-label uses of their drug. Similarly, in 2011, France passed a new system for monitoring off-label uses in anticipation of formal approval. Using a unique data set of pharmaceutical firms’ research and development projects, we exploit these regulatory changes to understand how firms react to government policies. Results demonstrate that firms responded to the US policy providing lower incentives to submit supplemental uses for formal approval. The results do not evince any reaction to France's stringent - but poorly enforced - regulation. These results have implications not only for innovation policy but for the creation of high-quality data for certain indications.
