A GlaxoSmithKline logo is shown Feb. 20, 2003 in Philadelphia, Penn.
A GlaxoSmithKline logo is shown Feb. 20, 2003 in Philadelphia, Penn. - 
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Kai Ryssdal: No matter how big the company, $3 billion is still a whole lotta money, which leads us to the British drug conglomerate GlaxoSmithKline today.

Glaxo's going to pay $3 billion to settle a bunch of longstanding criminal and civil cases brought by the U.S. government. Included in the bill of particulars are allegations Glaxo convinced doctors to prescribe its drugs for uses not approved by the FDA -- off-label marketing, it's called.

From the Marketplace Health Desk at WHYY, Gregory Warner reports.

Gregory Warner: A drug approved for blood pressure might be really good at preventing kidney damage. And if your doctor prescribes it that way, it's called off-label. That happens a lot, one in every five prescriptions.

Gail Wilensky: Insurers typically pay for the use, the off-label use, but drug companies are not allowed to promote it for that purpose.

Gail Wilensky is the former head of Medicaid. She now runs the nonprofit Project Hope. She says the government has always allowed doctors the freedom to prescribe as they see fit, but it does not extend that same freedom to what sales reps can say about the drug.

The government has collected billions of dollars from drug firms for allegedly violating this ban -- firms including Pfizer, Eli Lilly, and now GlaxoSmithKline. Those same companies are challenging that ban in court. They say the sales rep spiel is a form of free speech and should be protected.

Dan Carpenter: Companies might be able to say virtually anything about it. Their product exercises a health effect, a sanity effect, a happiness effect.

Dan Carpenter is a professor of government at Harvard who studies the FDA. He says the Supreme Court recently wrote a decision that some drug marketing is free-speech-protected. A case now in the federal court of appeals could decide whether that protection extends to off-label marketing. It's a question worth tens of billions of dollars.

Carpenter: If these rules were overturned, it would mean huge increase in revenues for these pharmaceutical companies.

And a smaller role for the Food and Drug Administration. He says it would limit the FDA to just approving drugs, not saying what diseases they've been proven to treat.

In Philadelphia, I'm Gregory Warner for Marketplace.

Follow Gregory Warner at @radiogrego