Key points

  • Drug repurposing is finding novel uses for existing drugs.

  • Indication-specific market exclusivities have been used to incentivize drug innovators to conduct the clinical trials preferred by drug regulators for label changes, but these are difficult to enforce because generic equivalents may still be approved and used off-label.

  • Our study finds that, despite indication-specific exclusivities, no new indications are added after FDA approval for two-thirds of drugs and that the probability of new indication additions drops to near zero after generic entry occurs.

  • As status quo for most drug innovators appears is creating novel one-indication products, there is much room for improving incentivizes for clinical investigations for new uses and for maximizing existing medicines’ full therapeutic potential.