The U.S. Food And Drug Administration (FDA) approves drugs subject to use in certain conditions, usually called indications.

For example, a drug may be approved only as a second line treatment for a disease, meaning that its use is permissible only when other available treatments have been tried and found to be ineffective. A second example of indication is that a drug may be approved to treat only male patients aged 50 or above.

However, there can be more conditions or indications, for which the drug administration may not be allowed.

In the first example cited above, the drug is not allowed to treat new patients impacted by the disease. In the second example, the drug administration is not permitted for female patients, and for male patients below the age of 50. Such cases constitute supplemental indications.

Past Successes for Supplemental Indications

After securing the drug approval for specific indications, a company may initiate its research and development activities to assess the drug’s applicability for the supplemental indications. The drug may also be assessed by the company to check for treatment of a completely different disease.

For example, Gilead Sciences Inc.’s (GILD) Harvoni drug was initially approved by the FDA in October 2014 for treating chronic hepatitis C virus (HCV) genotype 1 infection. In November 2015, it secured FDA approval to cover patients with genotype 4, 5 and 6 chronic HCV infection and in patients co-infected with HIV. In February 2016, it was also approved for treating chronic HCV patients with advanced liver disease. (For more, see: Gilead Remains Promising Despite Recent Declines.)

Similarly, the world’s top-selling drug, Humira, has received FDA approval for nine indications over 13 years. (For more, see also: 5 Best-Selling Prescription Meds Of All Time.)

Increasing Industry Focus

A study by leading international medical journal The BMJ reports that between 2005 and 2014, the FDA has approved around 300 supplemental indication applications relating to 164 unique approved prescription drugs. In a few cases, the prescription of drugs for supplemental indications exceeded the ones for its originally approved indications.

If approved, supplemental indications can boost drug utilization resulting in additional revenues for the company as it increases the patient population.

However, in the present day pricing system in the U.S., a drug is priced the same for every indication irrespective of differences in efficacy and competitive landscape. Additionally, the company’s spending on research for supplemental indications may add to the drug cost. This leads to the increasing cost of the drug to the patient.

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