Dr. David Fajgenbaum

But insurance companies and payers realized, well, if this drug that's approved for this one thing could also be useful in this other thing and it would be good for patients, shouldn't we allow doctors to prescribe things off-label?

And so that's something that happens very commonly.

About a quarter of all prescriptions in the U.S.

are off-label.

Yeah, so it's somewhere between 20% and 30% of all prescriptions written every day in the U.S.

are off-label.

Yeah, exactly.

So that includes examples like doxycycline for Lyme disease, where like every doctor in the world would be like, yes, use doxycycline for Lyme disease.

But doxycycline is a cheap old generic antibiotic.

So whoever made doxycycline 100 years ago, 30 years ago, when people figured out it worked for Lyme disease, they aren't going to submit for a label change.

And that gets into the other factor here, which is that once a drug becomes generic, whoever originally made the drug

they stop making money off of the drug because you have generic competition.

You have multiple companies that make the identical drug and the price plummets per pill.

And so no one in our system makes any money off finding a new disease for that drug.

Except it's more complicated than that, because you can only sell a drug for one price, regardless of what disease you sell it for.

It always has to be the same price.

So what that means is that you have to pick the first disease that you get your drug approved in.

You have to pick the optimal market for that drug for the optimal price because pricing is actually not based on the cost of the medicine.

Pricing is based on the value for that disease.

So the fewer competitors there are for a disease, the more expensive the drug.