40872 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 312 

[Docket No. FDA–2006–N–0237] (formerly 

Docket No. 2006N–0061) 

RIN 0910–AF13 

Charging for Investigational Drugs 

Under an Investigational New Drug 

Application 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is amending its 

investigational new drug application 

(IND) regulation concerning charging 

patients for investigational new drugs. 

This final rule revises the charging 

regulation to clarify the circumstances 

in which charging for an investigational 

drug in a clinical trial is appropriate, to 

set forth criteria for charging for an 

investigational drug for the different 

types of expanded access for treatment 

use described in the agency’s final rule 

on expanded access for treatment use of 

investigational drugs published 

elsewhere in this issue of the Federal 

Register, and to clarify what costs can 

be recovered for an investigational drug. 

This final rule will permit charging for 

a broader range of uses than was 

explicitly permitted previously. 

DATES: This rule is effective October 13, 

2009. 

FOR FURTHER INFORMATION CONTACT: 

For the Center for Drug Evaluation 

and Research: Colleen L. Locicero, 

Center for Drug Evaluation and 

Research, Food and Drug 

Administration, 10903 New 

Hampshire Ave., Bldg. 22, rm. 4200, 

Silver Spring, MD 20993–0002, 

301–796–2270. 

For the Center for Biologics 

Evaluation and Research: Stephen 

M. Ripley, Center for Biologics 

Evaluation and Research (HFM–17), 

Food and Drug Administration, 

1401 Rockville Pike, Rockville, MD 

20852–1448, 301–827–6210. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. Overview of the Final Rule, Including 

Changes to the Proposed Rule 

A. General Requirements for Charging 

B. Charging in Clinical Trials 

C. Charging for Expanded Access to 

Investigational Drugs for Treatment Use 

D. Recoverable Costs 

III. Comments on the Proposed Rule 

A. Overview of Comments 

B. General Comments 

C. General Criteria for Charging 

1. Justification for the Amount To Be 

Charged 

2. Prior Written Authorization to Charge 

3. Withdrawal of Authorization to Charge 

4. Lack of Timeframe for FDA Response 

D. Charging in a Clinical Trial 

1. General Comments 

2. Charging for the Sponsor’s Own Drug in 

a Clinical Trial 

3. Charging for an Approved Drug 

Obtained From Another Entity for Use as 

an Active Control or in Combination 

With Another Drug 

4. Charging for an Approved Drug 

Obtained From Another Entity in a 

Clinical Trial of the Drug 

5. Duration of Charging in a Clinical Trial 

E. Charging for Expanded Access to 

Investigational Drugs for Treatment Use 

1. General Comments 

2. Increasing Access 

3. Ethical Considerations 

4. Non-Interference With Drug 

Development 

5. Treatment INDs or Treatment Protocols 

6. 1-Year Authorization 

F. Costs Recoverable When Charging for an 

Investigational Drug 

1. Direct and Indirect Costs 

2. Recoverable Costs for Expanded Access 

Uses 

3. Supporting Documentation 

4. Authority to Set Pricing 

5. Confidentiality 

6. Effect on Payment Systems (CMS and 

Insurance) 

7. Collaboration With CMS and the 

National Cancer Institute 

G. Miscellaneous Comments 

1. Promotion 

2. Liability 

3. Product Labeling 

4. Analysis of Impact 

IV. Legal Authority 

V. Environmental Impact 

VI. Analysis of Economic Impacts 

A. Objectives of the Final Rule 

B. The Need for the Final Rule 

C. Why Allow Charging? 

D. Baseline for the Analysis 

E. Nature of the Impact 

1. Charging in a Clinical Trial 

2. Charging for Expanded Access Uses 

Described Under Final Subpart I 

3. Costs Recoverable When Charging for an 

Investigational Drug 

4. Summary 

F. Benefits of the Final Rule 

G. Costs of the Final Rule 

H. Minimizing the Impact on Small 

Entities 

I. Alternatives 

VII. Paperwork Reduction Act of 1995 

VIII. Federalism 

I. Background 

In the Federal Register of December 

14, 2006 (71 FR 75168) (proposed rule), 

we proposed to amend our IND 

regulation concerning charging patients 

for investigational new drugs (former 

§ 312.7(d) (21 CFR 312.7(d))) and to add 

new § 312.8 (charging for investigational 

drugs). Under FDA’s previous 

§ 312.7(d), FDA could authorize 

charging for an investigational drug 

used in a clinical trial under an IND and 

for an investigational drug used in a 

treatment protocol or treatment IND: 

• Former § 312.7(d)(1) provided that a 

sponsor that wished to charge for an 

investigational drug in a clinical trial 

needed to provide a full written 

explanation of why charging was 

necessary for the sponsor to undertake 

or continue the clinical trial, e.g., why 

distribution of the drug to test subjects 

should not be considered part of the 

normal cost of doing business. 

• Former § 312.7(d)(2) described 

several conditions that needed to be met 

to charge for an investigational drug 

used under a treatment protocol or 

treatment IND. 

• Former § 312.7(d)(3) provided that a 

sponsor could not commercialize an 

investigational drug by charging a price 

larger than that necessary to recover 

costs of manufacture, research, 

development, and handling of the 

investigational drug. 

• Former § 312.7(d)(4) provided that 

FDA could withdraw authorization to 

charge if it determined that the 

conditions underlying the authorization 

were no longer being met. 

In the preamble to the proposed rule, 

we identified three principal reasons for 

revising the previous charging 

regulation (the 1987 charging rule) (52 

FR 19466, May 22, 1987). 

First, the provisions of the 1987 

charging rule concerning charging for 

investigational drugs in a clinical trial 

needed to be revised to take into 

account circumstances that were not 

anticipated when that original rule was 

adopted in 1987. FDA expected that 

requests to charge in a clinical trial 

would be limited to requests to charge 

for the sponsor’s drug being tested in 

the trial. In fact, the agency received few 

such requests. 

Far more common have been requests 

to charge for approved drugs in trials 

when the drugs needed to be obtained 

from another entity. These approved 

drugs may have been used in a trial of 

the sponsor’s drug as an active control 

or in combination with the sponsor’s 

drug. Even more common were requests 

to charge for approved drugs used in 

trials by a third party (not the holder of 

the approved application) that were 

intended to study new uses of the 

approved drug or to compare two drugs. 

FDA concluded that requests to charge 

for investigational drugs in these 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40873 

situations may be appropriate, but that 

the criteria for evaluation of such 

requests are different from those that 

apply when the request to charge is for 

the sponsor’s own drug being tested in 

a clinical trial. Accordingly, the agency 

concluded that the 1987 charging rule 

needed to be revised to provide criteria 

for charging for approved drugs used in 

clinical trials. 

Second, the provisions of the 1987 

charging rule related to treatment use 

allowed charging patients for 

investigational drugs only when those 

drugs were provided under a treatment 

IND or treatment protocol. Elsewhere in 

this issue of the Federal Register, FDA 

is publishing a final rule that adds to 

part 312 (21 CFR part 312) a new 

subpart I concerning ‘‘Expanded Access 

to Investigational Drugs for Treatment 

Use’’ (referred to in this document as 

the ‘‘expanded access final rule’’ or 

‘‘subpart I’’). The expanded access final 

rule retains the treatment IND and 

treatment protocol provisions in the 

1987 charging rule with minor 

modifications, and provides for two 

additional types of expanded access for 

treatment use: Expanded access for 

individual patients and expanded 

access for intermediate-size patient 

populations. The 1987 charging rule 

needed to be revised to provide 

authority to charge for investigational 

drugs for these two new categories of 

expanded access. 

Third, the 1987 charging rule needed 

to be revised to specify the types of 

costs that can be recovered. The 

language of the 1987 charging rule was 

not very specific and did not provide 

sufficient guidance to sponsors on the 

costs that could be recovered. Moreover, 

because of the justifications for charging 

in a clinical trial differ from the 

justifications for charging for expanded 

access use, the agency believed that the 

costs appropriate for recovery would 

also differ. 

The reasons FDA believed the 1987 

charging rule needed to be revised are 

described more fully in the sections II.B, 

C, and D of the preamble to the 

proposed rule (71 FR 75168 at 75170 

through 75171). 

Accordingly, we proposed to remove 

paragraph (d) of former § 312.7 

(paragraph (d) discussed charging for 

and commercialization of 

investigational drugs). We proposed to 

add new § 312.8 containing the 

following: 

• General requirements for charging 

for investigational drugs, 

• Specific requirements pertaining to 

charging for investigational drugs in a 

clinical trial, 

• Requirements for charging for 

investigational drugs for treatment use 

under proposed subpart I (described in 

the proposed rule on expanded access to 

investigational drugs for treatment use 

(expanded access proposed rule) (71 FR 

75147, December 14, 2006)), and 

• Requirements for determining what 

costs can be recovered when charging 

for an investigational drug. 

We received 40 comments on the 

charging proposed rule, which we 

address in section III of this document. 

II. Overview of the Final Rule, 

Including Changes to the Proposed Rule 

The final rule revises the charging 

regulation at § 312.7(d) and adds new 

§ 312.8 to clarify the circumstances in 

which charging for an investigational 

drug in a clinical trial is appropriate, to 

set forth criteria for charging for an 

investigational drug for the different 

categories of expanded access for 

treatment use described in the expanded 

access final rule, and to clarify what 

costs can be recovered for an 

investigational drug. This final rule 

specifies the types of investigational 

uses of a drug in a clinical trial under 

part 312 that require prior authorization 

to charge and provides criteria to 

authorize charging for each of the uses 

described in the expanded access final 

rule. 

A. General Requirements for Charging 

New § 312.8(a) describes the general 

requirements and conditions for 

charging for investigational new drugs. 

Except for sponsors charging for a drug 

obtained from another entity (as 

described below), a sponsor who wishes 

to charge for an investigational drug 

must do the following: 

• Comply with the applicable 

requirements for the type of use for 

which charging is requested (either in a 

clinical trial or for expanded access) 

(§ 312.8(a)(1)), 

• Provide justification that the 

amount to be charged reflects only those 

costs that are permitted to be recovered 

(§ 312.8(a)(2)), and 

• Obtain prior written authorization 

from FDA (§ 312.8(a)(3)). 

Section 312.8(a)(4) provides that FDA 

will withdraw authorization to charge if 

it determines that charging is interfering 

with the development of a drug for 

marketing approval or that the criteria 

for the authorization are no longer being 

met. 

In response to comments, the final 

rule does not require sponsors who 

must obtain an approved drug from 

another entity for use in a clinical trial 

to obtain FDA approval to charge for the 

drug or be otherwise subject to the 

requirements in new § 312.8. 

B. Charging in Clinical Trials 

Section 312.8(b) of the final rule 

describes specific requirements 

pertaining to charging for an 

investigational drug in a clinical trial, 

including investigational use of the 

sponsor’s approved drug. The cost of an 

investigational drug used in a clinical 

trial is an anticipated cost of drug 

development and should ordinarily be 

borne by the sponsor. Therefore, FDA 

believes that charging should be 

permitted only when three 

circumstances are present, as described 

in § 312.8(b)(1) and as follows: 

First, charging should be allowed only 

to facilitate development of a promising 

new drug or indication that might not 

otherwise be developed, or to obtain 

important safety information that might 

not otherwise be obtained. The 

preamble to the 1987 charging rule 

made clear that there should be 

compelling justification for taking the 

unusual step of allowing charging for 

unproven therapy during its 

development, stating that ‘‘cost recovery 

is justified in clinical trials only when 

necessary to further the study and 

development of promising drugs that 

might otherwise be lost to the medical 

armamentarium.’’ (52 FR 19466 at 

19472). FDA believes that philosophy 

should continue to apply to charging in 

a clinical trial in this final rule. 

Accordingly, § 312.8(b)(1)(i) requires 

that a sponsor wishing to charge for its 

investigational drug in a clinical trial 

provide some evidence of potential 

clinical benefit that, if demonstrated in 

clinical investigations, would provide a 

significant advantage over available 

products in the diagnosis, treatment, 

mitigation, or prevention of a disease or 

condition. Products that are likely to 

meet this criterion are also likely to be 

eligible for fast track development 

programs and priority review (see FDA’s 

guidance for industry on ‘‘Fast Track 

Drug Development Programs— 

Designation, Development, and 

Application Review’’ (January 2006), 

including the priority review policies 

for the Centers for Drug Evaluation and 

Research and Biologics Evaluation and 

Research in Appendix 3 of that 

guidance (available on the Internet at 

http://www.fda.gov/cder/guidance/ 

index.htm)). 

Second, charging should be permitted 

only for a trial that is necessary for the 

development of the drug. Therefore, 

§ 312.8(b)(1)(ii) requires that the sponsor 

demonstrate that the data to be obtained 

from the clinical trial would be essential 

to establishing that the drug is effective 


srobinson on DSKHWCL6B1PROD with RULES2
40874 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

or safe for the purpose of obtaining 

initial marketing approval of the drug, 

or that it would support a significant 

change in the labeling of the sponsor’s 

approved drug. For example, the trial 

could be designed to provide data that 

would support approval of a new 

indication or generate important 

comparative safety information. 

Third, charging must be necessary to 

the conduct of the clinical trial. Under 

§ 312.8(b)(1)(iii), a sponsor is required to 

demonstrate that clinical development 

of the drug could not be continued 

without charging because the cost of the 

drug is extraordinary. The cost of the 

drug may be extraordinary because of 

manufacturing complexity, scarcity of a 

natural resource, the large quantity of 

drug needed (e.g., due to the size or 

duration of the trial) or some 

combination of these or other 

circumstances. In response to 

comments, this extraordinary cost 

criterion for charging for the sponsor’s 

drug in a clinical trial has been revised 

to clarify that the resources of an 

individual sponsor are considered in 

determining whether cost is 

extraordinary. 

Section 312.8(b)(2) provides that the 

authorization to charge for a drug in a 

clinical trial would ordinarily continue 

for the duration of the clinical trial 

because it is unlikely that the need for 

charging would change during the 

course of the trial. However, 

§ 312.8(b)(2) gives FDA the discretion to 

specify a duration shorter than the 

length of the trial. FDA may specify a 

shorter duration if, for example, there is 

a particular concern that the 

authorization to charge has the potential 

to delay the development of a drug for 

marketing approval. 

C. Charging for Expanded Access to 

Investigational Drugs for Treatment Use 

Section 312.8(c) sets forth the criteria 

for charging for the three types of 

expanded access to investigational 

drugs for treatment use described in 

subpart I of part 312 (the expanded 

access final rule). Part 312, subpart I 

describes two types of treatment use 

(expanded access for individual patients 

and expanded access for intermediatesize patient populations) not previously 

described in FDA’s regulations and, 

therefore, not specifically contemplated 

by the 1987 charging rule. FDA’s goal in 

permitting charging for the treatment 

uses described in subpart I is to 

facilitate access to investigational drugs 

in situations in which a sponsor might 

not be able to provide a drug for such 

use absent charging, or to facilitate 

broader access to an investigational drug 

for treatment use than would be 

possible absent charging. 

The agency’s principal concern with 

charging patients in expanded access 

settings for investigational drugs is that 

charging not interfere with the 

development of drugs for commercial 

marketing. Accordingly, § 312.8(c)(1) 

requires a sponsor wishing to charge for 

an investigational drug for any of the 

three types of expanded access under 

part 312, subpart I to provide reasonable 

assurance that charging will not 

interfere with developing the drug for 

marketing approval. 

For the types of expanded access to 

investigational drugs described in 

proposed subpart I, FDA believes it is 

less likely that the limited numbers of 

patients who might obtain individual 

patient expanded access to an 

investigational drug (§ 312.310) or 

intermediate-size patient population 

expanded access (§ 312.315) would 

impede development of a drug or 

indication. The potential to interfere 

with drug development is greatest for 

treatment use under a treatment IND or 

treatment protocol (§ 312.320). 

Treatment INDs or treatment protocols 

can attract large numbers of patients and 

thus have the potential to significantly 

affect enrollment in the clinical trials 

needed to establish safety and 

effectiveness. Accordingly, § 312.8(c)(2) 

sets forth specific information that 

would be required to reasonably assure 

FDA that charging for an investigational 

drug under a treatment IND or treatment 

protocol will not interfere with drug 

development. Sponsors are required to 

provide evidence of sufficient 

enrollment in any ongoing clinical trials 

needed for marketing approval to 

reasonably assure FDA that the trials 

will be completed as planned 

(§ 312.8(c)(2)(i)). Sponsors are also 

required to provide evidence of 

adequate progress in the development of 

the drug for marketing approval 

(§ 312.8(c)(2)(ii)). Such evidence could 

include successful meetings with FDA 

before submission of a new drug 

application (NDA), submission of an 

NDA, or completion of other significant 

drug development milestones. Sponsors 

are also required to submit information 

under their general investigational plans 

(§ 312.23(a)(3)(iv)) specifying the drug 

development milestones they plan to 

meet in the coming year 

(§ 312.8(c)(2)(iii)). 

Section 312.8(c)(3) specifies that the 

authorization to charge be limited to the 

number of patients authorized to receive 

the drug for treatment use, if there is a 

limitation. For example, the 

authorization to charge for an 

investigational drug under an individual 

patient expanded access submission is 

limited to a single patient. Similarly, the 

authorization to charge under an 

intermediate-size patient population 

expanded access submission is limited 

to the number of patients permitted to 

receive the drug under that particular 

intermediate-size patient population 

expanded access IND or protocol. 

Section 312.8(c)(4) provides that FDA 

will ordinarily authorize charging for 

expanded access for treatment use 

under part 312, subpart I to continue for 

1 year from the time of FDA 

authorization and that FDA may 

reauthorize charging for additional 

periods upon request. It also provides 

FDA the discretion to specify a shorter 

authorization. The final rule limits the 

authorization to charge to a period of 1 

year or less to permit the agency to 

periodically assess whether the criteria 

for charging continue to be met. FDA 

anticipates that it will exercise its 

discretion to specify a shorter duration 

when there is a particular concern that 

charging could interfere with drug 

development. 

D. Recoverable Costs 

Section 312.8(d) describes the kinds 

of costs that are recoverable when 

charging for an investigational drug in a 

clinical trial and for expanded access for 

treatment use under part 312, subpart I. 

The purpose of permitting charging for 

an investigational drug in a clinical trial 

is to permit a sponsor to recover the 

costs of making a drug available to study 

subjects when those costs are 

extraordinary. Thus, § 312.8(d)(1) limits 

cost recovery to the direct costs of 

making the investigational drug 

available in these situations. Indirect 

costs can not be recovered. 

Section 312.8(d)(1)(i) describes direct 

costs as costs incurred by a sponsor that 

can be specifically and exclusively 

attributed to providing the drug for the 

investigational use for which FDA has 

authorized cost recovery. Direct costs 

include costs per unit to manufacture 

the drug (e.g., raw materials, labor, and 

nonreusable supplies and equipment 

used to manufacture the quantity of 

drug needed for the use for which 

charging is authorized) or costs to 

acquire the drug from another 

manufacturing source, and direct costs 

to ship and handle (e.g., store) the drug. 

Indirect costs are costs that are not 

attributable solely to making the drug 

available for the investigational use for 

which charging is requested (for 

example, expenditures for physical 

plant and equipment that are incurred 

primarily for the purpose of producing 

large quantities of the drug for 

commercial sale after approval, or for 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40875 

1Unless otherwise indicated, ‘‘serious diseases’’ 

in this final rule refers to serious or immediately 

life-threatening diseases or conditions. 

making the drug available for a variety 

of investigational uses). Indirect costs 

are not appropriate for cost recovery for 

investigational uses because these costs 

would be incurred even if the clinical 

trial or expanded access use for which 

charging is authorized did not occur. 

Section § 312.8(d)(1)(ii) states that 

indirect costs include costs incurred 

primarily to produce the drug for 

commercial sale (e.g., costs for facilities 

and equipment used to manufacture the 

supply of investigational drug, but that 

are primarily intended to produce large 

quantities of the drug for eventual 

commercial sale) and research and 

development, administrative, labor, or 

other costs that would be incurred even 

if the clinical trial or treatment use for 

which charging is authorized did not 

occur. 

Sponsors who provide investigational 

drugs for expanded access for treatment 

use for intermediate-size patient 

populations and for treatment INDs and 

treatment protocols incur costs in 

addition to the anticipated and ordinary 

costs of drug development. The purpose 

of permitting cost recovery for expanded 

access use is to encourage sponsors to 

make investigational drugs available for 

treatment use. Thus, § 312.8(d)(2) 

permits a sponsor to recover the costs of 

administering treatment use programs 

for intermediate-size patient 

populations and for treatment INDs and 

treatment protocols, as well as the direct 

costs of the drug. The final rule does not 

authorize sponsors to recover 

administrative costs associated with 

expanded access for individual patients 

because these costs would be so minor. 

Section 312.8(d)(2) provides that in 

addition to the direct costs of the drug 

described in § 312.8(d)(1), a sponsor 

may recover the costs of monitoring the 

expanded access use, complying with 

IND reporting requirements, and other 

administrative costs directly associated 

with making a drug available for 

treatment use under §§ 312.315 and 

312.320. 

Section 312.8(d)(3) provides that, to 

support its calculation for cost recovery, 

a sponsor must provide supporting 

documentation to show that the cost 

calculation is consistent with the 

relevant requirements in § 312.8(d). The 

proposed rule has been revised to state 

that the documentation must be 

accompanied by a statement that a 

certified public accountant has 

reviewed and approved the calculations. 

III. Comments on the Proposed Rule 

A. Overview of Comments 

The agency received 40 comments on 

the proposed rule. Comments were 

received from individuals (persons with 

serious diseases,1 persons with family 

members with serious diseases, and 

other interested persons), health care 

and consumer advocacy organizations, 

pharmaceutical and biotechnology 

companies, health insurance companies, 

trade organizations, a State government, 

an academic medical center, and a 

venture capital company. 

Some comments from individuals 

were supportive of the charging 

regulation to the extent that it may make 

it easier to develop drugs for serious 

diseases in some cases and make 

investigational drugs more broadly 

available for treatment use under 

expanded access programs. Other 

comments from individuals were 

concerned that charging, in the absence 

of reimbursement for investigational 

drugs by health insurance companies, 

would limit enrollment in clinical trials 

and expanded access programs to those 

who can afford to pay for the drug. 

Health care and consumer advocacy 

organizations were generally supportive 

of the proposed rule. Some stated that 

the rule struck the appropriate balance 

between facilitating development of 

costly therapies, including drugs for rare 

diseases, and increasing access to 

investigational drugs for treatment use. 

One advocacy organization expressed 

concern about the effects of charging on 

equitable access across different 

economic strata, arguing that the ability 

to enroll in clinical trials and expanded 

access programs may be restricted to 

wealthier individuals. One organization 

was skeptical of the agency’s assertion 

that facilitating charging for 

investigational drugs made available 

under expanded access programs would 

increase access. 

FDA believes this final rule will 

facilitate development of some costly 

therapies that might not have been 

developed absent cost recovery and will 

encourage expanded access programs. 

FDA also acknowledges, however, that 

the rule has the potential to create 

certain inequities. Issues related to 

equitable access are discussed in greater 

detail in responses to comments 36 

through 39. 

The major concerns of pharmaceutical 

and biotechnology companies and their 

trade organizations were the 

requirements pertaining to charging for 

approved drugs being evaluated in a 

clinical trial under an IND. These 

companies were most concerned with 

the requirements pertaining to charging 

for approved drugs that must be 

obtained from another entity for use in 

a trial. An academic medical center was 

very supportive of FDA’s efforts to 

clarify the charging requirements 

pertaining to approved drugs used in a 

trial under an IND. As discussed in 

greater detail in responses to comments 

27 and 31, FDA has revised the 

proposed rule so that sponsors need not 

obtain authorization from FDA to charge 

for approved drugs obtained from 

another entity not affiliated with the 

sponsor. 

The primary concern of health 

insurance companies and their trade 

organization was that the new charging 

regulation may create pressure on thirdparty payers to reimburse, or lead to 

legislation requiring them to reimburse, 

for investigational drugs. 

Reimbursement issues are discussed in 

greater detail in comments 63 through 

65. 

A major concern for a small 

biotechnology company, a venture 

capital firm, and a State health agency 

was the narrowing of the cost recovery 

provision in the proposed rule to permit 

recovery of direct costs only for an 

investigational drug used in a clinical 

trial, and to specifically exclude 

recovery of substantial capital 

expenditures incurred for purposes of 

large-scale manufacturing and general 

research and development costs. These 

comments were concerned that this 

narrowing would make it more difficult 

for entities with limited resources to 

develop expensive new therapies. FDA 

continues to believe that these 

expenditures are not appropriate for 

cost recovery during the development of 

a new drug. These concerns are 

discussed in greater detail in responses 

to comments 1 and 46. 

B. General Comments 

(Comment 1) Two comments stated 

that charging for investigational drugs to 

treat rare diseases or conditions (orphan 

drugs) should be subject to less stringent 

criteria than charging for drugs to treat 

non-orphan diseases. The comments 

maintained that drugs to treat orphan 

diseases are commonly developed by 

small companies or not-for-profit 

entities that have limited or no ability 

to raise money from capital markets. 

Therefore, less restrictive charging 

criteria are needed to permit these 

entities to recover their development 

costs. 

(Response) FDA does not believe 

there is justification for different and 

less stringent cost recovery criteria for 

investigational drugs for orphan 

diseases than non-orphan diseases. As 

stated in the preamble to the proposed 

rule, FDA does not believe that charging 


srobinson on DSKHWCL6B1PROD with RULES2
40876 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

for an investigational drug in clinical 

studies intended to support approval of 

the drug is the appropriate mechanism 

to recoup research and development 

costs beyond those costs directly 

associated with making the drug 

available under criteria described in this 

charging rule (71 FR 75168 at 75171) 

(see response to comment 46 for further 

discussion). FDA believes sponsors 

intending to develop orphan products 

should pursue orphan product 

designation from FDA to assist with 

development and recovery of 

investment (21 CFR part 316). Such 

designation provides for tax credits for 

the costs of clinical research associated 

with development of an orphan drug 

and 7 years of marketing exclusivity 

after an orphan drug is approved. In 

addition, sponsors that obtain orphan 

designation may be eligible to receive 

grants from FDA of up to $350,000 per 

year for 4 years to defray directly the 

costs of clinical research (for more 

information, see Office of Orphan 

Products Development, http:// 

www.fda.gov/orphan/index.htm). 

Moreover, orphan designation and grant 

funds from FDA often provide 

incentives for additional investment 

from other sources. This final rule is 

intended only to address the situation in 

which the cost of the drug itself is so 

high that a sponsor needs to recover 

costs associated with making the drug 

available to be able to conduct or 

continue the trial. 

(Comment 2) One comment 

mentioned that it is not clear if the rule 

applies to both unapproved drugs and 

approved drugs under investigation for 

new indications. 

(Response) The rule applies to both 

unapproved drugs and, in certain 

situations, approved drugs under 

investigation for new indications (see 

also response to comment 4). 

(Comment 3) One comment suggested 

that to improve the readability of the 

proposed rule, the rule should have 

different provisions for companysponsored expanded access programs 

than for investigator-sponsored 

expanded access programs. The 

comment also suggested that there 

should be different provisions for new 

molecular entities than for approved 

products being studied for new 

indications. 

(Response) FDA does not believe 

there is a need for separate provisions 

for expanded access depending on 

whether the sponsor of the IND is a 

manufacturer or a noncommercial 

sponsor such as an individual 

physician. In either case, FDA’s primary 

concern is whether the IND would 

somehow interfere with drug 

development, so the criteria would be 

the same for both groups. We also do 

not believe that separate provisions are 

needed regarding the amount charged 

because, in both cases, the amount 

charged would be limited to costs. 

Based on changes made to the 

proposed rule, FDA also does not 

believe there is any need to divide the 

rule into requirements applicable to 

charging for new molecular entities and 

requirements applicable to charging for 

approved drugs under investigation for 

new uses. FDA has revised the proposed 

rule to eliminate the requirement that a 

sponsor who obtains an approved drug 

from another source to use in a trial as 

an active control or in a trial intended 

to obtain additional information about 

the approved drug (e.g., to study a new 

indication, to study a safety endpoint) 

must obtain prior authorization to 

charge for the approved drug when used 

for an investigational purpose (see 

comments 27 and 31). FDA has retained 

the requirement that a sponsor obtain 

permission to charge for its own 

approved drug in a trial of that drug. In 

this scenario, FDA believes the same 

criteria as would apply to charging for 

an unapproved drug should apply. 

Therefore, a separate provision is not 

needed. 

(Comment 4) One comment stated 

that the proposed rule’s restrictions on 

charging should not apply to approved 

drugs and that investigators and others 

charging for approved drugs should be 

permitted to charge their usual amounts 

and to receive the customary insurance 

reimbursement. The comment also 

noted that restricting charges for 

approved drugs in clinical trials would 

be administratively burdensome to 

investigators. 

(Response) FDA agrees in part and 

disagrees in part. FDA agrees that a 

sponsor that is not the marketer of an 

approved drug (i.e., is not the entity that 

holds the approved application) should 

not be required to obtain FDA approval 

to charge for the drug when it is used 

in a clinical trial for any purpose—e.g., 

used for its approved indication as an 

active control or in a trial of a new 

indication for the drug (see comments 

27 and 31 discussing in greater detail 

the revision to the final rule to 

accommodate this change). Accordingly, 

the provisions in the proposed rule 

requiring prior authorization to charge 

in these situations have been deleted 

from this final rule. However, FDA 

believes a sponsor seeking to charge for 

its own approved drug in a trial of a 

new use or to obtain important safety 

information about the drug should be 

treated differently. In these situations, 

the sponsor is ordinarily conducting the 

trial to enhance or preserve the 

commercial value of the drug. 

Therefore, as is the case with a request 

to charge for a new molecular entity, the 

sponsor should be required to overcome 

the presumption that the cost of the 

drug is a normal cost of the business of 

drug development, a cost that should 

ordinarily be borne by the sponsor of 

the trial. Therefore, FDA believes the 

sponsor should be required to obtain 

prior authorization to charge and should 

meet the same burden for charging for 

the approved drug in a clinical trial as 

it would be required to meet for 

charging for a new molecular entity. 

That is, the requirements in § 312.8(b)(1) 

apply with equal force to charging for 

the sponsor’s unapproved drug and 

charging for the sponsor’s approved 

drug in a trial of a new use or a trial that 

could otherwise result in an important 

labeling change. It is beyond the scope 

of the regulation and FDA’s authority to 

regulate insurance reimbursement with 

respect to clinical trials involving 

approved drugs. 

C. General Criteria for Charging 

Proposed § 312.8(a) set forth the 

general requirements and conditions for 

charging for investigational drugs. A 

sponsor that wishes to charge for an 

investigational drug must: 

• Comply with the applicable 

requirements for the type of use for 

which charging is requested (either in a 

clinical trial or for expanded access) 

(proposed § 312.8(a)(1)), 

• Provide justification that the 

amount to be charged reflects only those 

costs that are permitted to be recovered 

(proposed § 312.8(a)(2)), and 

• Obtain prior written authorization 

from FDA (proposed § 312.8(a)(3)). 

1. Justification for the Amount To Be 

Charged 

(Comment 5) One comment asked that 

the following language be added at the 

end of § 312.8(a)(2) and (c)(1) of the 

proposed rule: ‘‘Any such charges found 

to be recoverable costs as determined 

under [§ 312.8(d)] shall be minimized 

and/or terminated to the greatest degree 

or at the earliest opportunity possible 

consistent with the criteria in this rule. 

If circumstances supporting charging 

under this rule are no longer met, 

charging shall terminate.’’ 

(Response) FDA does not believe it is 

necessary to insert additional language 

concerning how long and how much to 

charge because the language essentially 

repeats the requirements that are 

already in other parts of the rule. 

Section 312.8(b)(2) and (c)(4) of the final 

rule specify how long it is permissible 

to charge in a clinical trial and for an 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40877 

expanded access use, respectively. 

Section 312.8(a)(4) permits FDA to 

withdraw the authorization to charge at 

any time if it determines that charging 

is interfering with the development of a 

drug for marketing approval or that the 

criteria for the authorization are 

otherwise no longer being met. Section 

312.8(d) specifies what costs can be 

recovered during whatever time period 

charging is authorized. 

2. Prior Written Authorization to Charge 

The requirement in the proposed rule 

to obtain prior written authorization 

from FDA to charge for any 

investigational drug is a change from the 

requirements under the 1987 charging 

rule. Under the 1987 charging rule, a 

sponsor was required to obtain prior 

written authorization to charge for an 

investigational drug in a clinical trial 

(§ 312.7(d)(1)), but a sponsor of a 

treatment IND or a treatment protocol 

under § 312.34 was permitted to 

commence charging 30 days after 

receipt by FDA of an information 

amendment concerning charging, unless 

FDA notified the sponsor to the contrary 

(§ 312.7(d)(2)). 

(Comment 6) One comment requested 

that FDA retain the provision in the 

1987 charging rule (§ 312.7(d)(2)) that 

allowed authorization to charge for an 

investigational drug under a treatment 

IND or treatment protocol to go into 

effect automatically 30 days after receipt 

by FDA of the information amendment, 

unless the sponsor is notified to the 

contrary by FDA (§ 312.7(d)(2)), and 

further, that FDA make this provision 

applicable to all expanded access uses. 

The comment argued that the 

requirement for prior authorization 

would result in delay in the availability 

of investigational drugs for expanded 

access uses. One comment requested 

that FDA add the following language 

after the provision requiring prior 

written authorization to charge for an 

investigational drug: ‘‘Such 

authorization shall not be unreasonably 

withheld.’’ Two comments agreed with 

FDA’s decision to require prior written 

authorization from FDA to charge for 

drugs obtained through expanded access 

programs. 

(Response) FDA does not agree that 

charging for expanded access uses 

should be permitted without prior 

written authorization to charge from 

FDA. FDA believes it is important to 

determine, in advance of any patient 

being charged, that the criteria for 

charging are met (in particular, the 

requirement that charging not interfere 

with drug development) and that the 

amount to be charged is consistent with 

the cost recovery requirements. 

FDA also does not believe that this 

provision will delay access to 

investigational therapies by patients 

with serious diseases who lack 

therapeutic alternatives. When there is a 

pressing need for cost recovery to make 

an investigational therapy available, 

FDA will ordinarily be able to expedite 

review of a charging request. For a new 

IND, FDA anticipates that, in most 

cases, it will be able to make a charging 

determination at the same time it makes 

a determination on the underlying 

expanded access IND. When the need to 

charge becomes evident after an 

expanded access IND is ongoing, FDA 

anticipates that a sponsor would be able 

to foresee the need to charge sufficiently 

far in advance of that need to be able to 

make a charging submission and obtain 

a timely FDA determination. 

FDA also does not believe it is 

necessary to specify that the 

authorization to charge ‘‘shall not be 

unreasonably withheld.’’ The 

Administrative Procedure Act provides 

that an agency decision may be set aside 

by the courts if found to be ‘‘arbitrary, 

capricious an abuse of discretion, or 

otherwise not in accordance with law’’ 

(5 U.S.C. 706(2)(A)). The agency 

believes this language provides the 

appropriate standard for FDA’s decision 

of whether to allow charging for an 

investigational drug. 

3. Withdrawal of Authorization to 

Charge 

Proposed § 312.8(a)(4) specified that 

FDA will withdraw the authorization to 

charge if it determines that charging is 

interfering with the development of a 

drug for marketing approval or that the 

criteria for the authorization are 

otherwise no longer being met. 

(Comment 7) One comment 

recommended that the rule include an 

additional requirement specifying that 

FDA notify the sponsor of a proposal to 

withdraw authorization to charge and 

that FDA provide the sponsor an 

opportunity to respond. 

(Response) FDA expects in most cases 

to provide reasonable notice before 

withdrawing an authorization to charge 

to allow sponsors an opportunity to 

address the agency’s concerns. We are 

not amending the proposed rule as 

requested, however, because the agency 

believes we should have the flexibility, 

when warranted, to withdraw an 

authorization to charge without 

providing advance notice to the 

sponsor. Sponsors can request review of 

FDA’s withdrawal of an authorization to 

charge using dispute resolution 

processes. 

4. Lack of Timeframe for FDA Response 

(Comment 8) Two comments 

recommended that the final rule include 

a general timeframe for FDA to decide 

whether to permit charging. One of the 

comments recommended that FDA 

decide all charging requests within 30 to 

60 days. 

(Response) FDA does not believe it 

should commit to a specified time 

period for review that would apply to 

all charging requests. In many cases, 

FDA anticipates being able to make a 

determination on a request to charge at 

the same time it responds to the 

underlying IND submission (when the 

submissions are made at the same time). 

However, in FDA’s experience, charging 

requests can present challenging issues 

that require some discussion between 

FDA and the sponsor. Thus, it is 

difficult to estimate reliably a time 

period for making a charging request 

determination that would apply 

uniformly to all charging requests. For 

this reason, FDA is not prepared to 

commit to a 30-day timeframe for 

making charging request 

determinations. FDA also does not 

foresee the need for a 60-day maximum 

review time. 

D. Charging in a Clinical Trial 

Proposed § 312.8(b) described specific 

requirements pertaining to charging for 

an investigational drug in a clinical 

trial. This provision described criteria 

for charging for an investigational drug 

in three situations: 

• Charging for the sponsor’s own drug 

in a clinical trial (§ 312.8(b)(1)), 

• Charging for an approved drug that 

a sponsor must obtain from another 

entity for use as an active control or in 

combination with another drug in a 

clinical trial designed to evaluate the 

safety and effectiveness of the sponsor’s 

investigational drug (§ 312.8(b)(2)), and 

• Charging for an approved drug that 

must be obtained from another entity in 

a clinical trial designed to evaluate the 

approved drug (e.g., for another 

indication) (§ 312.8(b)(3)). 

1. General Comments 

(Comment 9) Several comments stated 

that permitting charging for the 

investigational drug in clinical trials 

would make it even more difficult to 

enroll subjects into clinical trials and, 

therefore, could increase the time to 

complete trials and delay bringing new 

drugs to market. Three comments stated 

that charging could discourage 

enrollment by patients who lack the 

resources to pay for the investigational 

drug. One comment stated that charging 

for nonreimbursed, investigational 


srobinson on DSKHWCL6B1PROD with RULES2
40878 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

therapies could discourage physicians 

from recommending enrollment in trials 

to their patients who are eligible. 

(Response) As was the case with the 

prior charging rule, the provisions 

concerning charging for the sponsor’s 

investigational drug in this final rule are 

intended to help sponsors develop 

important new therapies that would be 

very difficult or impossible to develop 

absent charging. In FDA’s experience, 

sponsors have rarely found it necessary 

to charge for such therapies in clinical 

trials to develop a drug for marketing 

approval. FDA anticipates that charging 

for the sponsor’s drug in a clinical trial 

will continue to be an unusual 

circumstance. FDA recognizes that 

charging could make it difficult to enroll 

subjects in clinical trials and may have 

a disproportionate impact on enrollment 

of patients who cannot afford to pay for 

the investigational drug. FDA expects, 

however, that sponsors will monitor 

clinical trial accrual rates and take 

whatever steps are necessary to ensure 

that subjects are able to enroll. For 

example, in FDA’s experience, sponsors 

who have charged for an investigational 

drug in a clinical trial have made 

provision to enroll subjects unable to 

pay. 

(Comment 10) Two comments stated 

that the financial burden for conducting 

clinical trials, including supplying the 

investigational drug, should be carried 

by the sponsors, who stand to benefit 

from the drug if commercialized. 

(Response) FDA agrees that, in most 

circumstances, sponsors should bear the 

costs of making an investigational drug 

available in a clinical trial. The 

preamble to the proposed rule stated: 

‘‘Generally, the costs of conducting a 

clinical trial are costs that the sponsor 

should bear. Conducting a clinical trial 

is part of the drug development process, 

and drug development is an ordinary 

business expense for a commercial 

sponsor’’ (71 FR 75168 at 75170). The 

preamble to the proposed rule also 

clarified that the philosophy underlying 

the 1987 charging rule—that charging 

for an investigational drug in a clinical 

trial should be an exceptional 

circumstance and justified only when 

necessary to further the study of a 

promising drug that might otherwise not 

be developed—was intended to apply to 

this charging rule (71 FR 75168 at 

75170). 

(Comment 11) One comment stated 

that FDA should include in the codified 

portion of the rule the language from the 

preamble of the 1987 charging rule that: 

‘‘FDA * * * [presumes] that supplying 

investigational drugs to subjects 

participating in clinical trials without 

charge is part of the normal cost of 

doing business.’’ 

(Response) FDA does not believe it is 

necessary to include the suggested 

language in this final rule. The preamble 

to the proposed rule contained language 

similar to the language in the preamble 

to the 1987 charging rule, stating that: 

‘‘Generally, the costs of conducting a 

clinical trial are costs that the sponsor 

should bear. Conducting a clinical trial 

is part of the drug development process, 

and drug development is an ordinary 

business expense for a commercial 

sponsor’’ (71 FR 75168 at 75170). Thus 

it is clear that FDA intends that the 

presumption that the cost of an 

investigational drug should ordinarily 

be borne by the sponsor and charging is 

justified only in exceptional 

circumstances be carried forward to this 

rule. That presumption is implicit in the 

stringent criteria in § 312.8(b)(1) for 

allowing charging for a sponsor’s drug 

in a clinical trial. FDA does not believe 

it is necessary to state the presumption 

in the codified language. 

(Comment 12) One comment stated 

that FDA should consider working with 

pharmaceutical firms to develop better 

ways of funding clinical trials of 

investigational drugs. The comment 

recommended that FDA evaluate 

practical ways the pharmaceutical 

industry can fund patient expenses for 

investigational drugs used in clinical 

studies and that one option would be for 

FDA to evaluate the viability of 

establishing a common patient pool 

funded by pharmaceutical firms on a 

voluntary or required basis. 

(Response) The agency believes that 

the comment raises a valid concern. 

This charging rule is intended to allow 

a sponsor to recover its costs associated 

with making an investigational drug 

available to clinical trial subjects when 

the cost of the drug is so high that the 

study could not be conducted without 

charging. The rule is not intended to 

help defray other costs associated with 

the conduct of a trial. However, in 

FDA’s experience, the drug cost is 

usually not the largest expense 

associated with clinical trials. Typically, 

the costs of administering and 

monitoring a clinical trial are much 

greater than the cost of the drug. At 

present, FDA is focusing its 

collaborative efforts with industry on 

improving the efficiency of the clinical 

trial process through various Critical 

Path programs (e.g., Clinical Trial 

Transformation Initiative, http:// 

www.fda.gov/oc/initiatives/criticalpath/ 

clinicaltrials.html). FDA encourages 

efforts to develop alternative 

mechanisms to finance important 

clinical research by private sector 

interests or nonregulatory governmental 

bodies, but believes such efforts would 

be best administered by private sector 

interests or nonregulatory governmental 

bodies. 

(Comment 13) One comment 

recommended that the title of the rule 

be changed from ‘‘Charging for 

Investigational Drugs’’ to ‘‘Charging for 

Drugs Used in Clinical Trials’’ because 

the rule also would permit sponsors to 

charge for approved drugs, which, the 

comment asserts, are not investigational. 

(Response) FDA disagrees. The rule 

addresses charging for investigational 

drugs both in clinical trials and in 

expanded access programs under new 

subpart I. Because the recommended 

title would seem to exclude expanded 

access uses, that title is too narrow. 

Moreover, the use of an approved drug 

in a trial of a new use is an 

investigational use and thus clearly 

covered by the rule and its title. See 

response to comment 15 for discussion 

of a minor change to the section’s title. 

(Comment 14) Two comments stated 

that permitting charging for an 

investigational drug in a clinical trial— 

because it might exclude economically 

disadvantaged persons from trial 

participation—could exacerbate existing 

problems with underrepresentation of 

economically disadvantaged and 

minorities in such trials, and thus may 

limit generalizability of trial results. 

(Response) FDA does not believe that 

inability to participate in a clinical trial 

because a subject cannot pay for the 

drug will have a meaningful effect on 

generalizability of trial results. Many 

factors affect participation in clinical 

trials, including geographic location, 

ability to qualify for the trial, 

demographic representation at trial 

sites, and an insufficient number of slots 

for all who might like to participate. The 

effects of charging on the nature of the 

trial population would probably be of 

limited significance relative to other 

factors that could affect generalizability. 

In addition, in FDA’s experience, 

sponsors that charge subjects for 

investigational drug in a clinical trial 

typically make provision for subjects 

who are unable to pay for the drug, thus 

mitigating any potential effect on 

generalizability due to 

underrepresentation of individuals from 

lower economic strata. 

(Comment 15) Two comments 

recommended that the rule include a 

provision stating that the rule does not 

apply to clinical trials that are exempt 

from the requirement to have an IND. 

(Response) FDA did not intend that 

the charging regulation apply to clinical 

trials that are exempt from the IND 

requirements under § 312.2(b). To make 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40879 

this clearer, FDA has changed the title 

of § 312.8 to ‘‘Charging for 

investigational drugs under an IND.’’ 

(Comment 16) Two comments stated 

that permitting charging for unapproved 

drugs in clinical trials has the potential 

to adversely affect FDA resources. 

(Response) As discussed in greater 

detail in section I of this document, 

FDA believes it is important to provide 

an option to charge for investigational 

drugs in certain circumstances and, 

also, that is it is important for FDA to 

regulate charging to prevent 

commercialization of unapproved drugs 

and unapproved indications. In FDA’s 

years of experience reviewing charging 

requests under the 1987 charging rule, 

such requests have been infrequent and 

the resources required to conduct such 

reviews did not have a negative effect 

on FDA’s mission to ensure the safety 

and effectiveness of new drugs. The 

proposed rule expanded the scope of 

INDs for which sponsors may seek cost 

recovery to include the three types of 

expanded access INDs under new 

subpart I. However, in response to 

comments, the final rule no longer 

requires sponsors that must obtain an 

approved drug from another entity to 

obtain FDA authorization to charge for 

that approved drug. Thus, FDA 

anticipates only a modest increase in 

the number of requests to charge due to 

this final rule. 

In addition, the cost calculation was 

perhaps the most time-consuming 

aspect of preparing and reviewing 

charging requests under the 1987 

charging rule. This final rule clarifies 

and simplifies the scope of recoverable 

costs. Thus, FDA anticipates that it will 

typically take less time to prepare and 

review a charging submission under the 

new rule than under the 1987 charging 

rule. 

(Comment 17) One comment stated 

that the rule should differentiate 

between different phases of testing of an 

unapproved drug because the 

justification for allowing recovery and 

the supporting evidence will vary for 

different clinical trials in different 

phases of drug development. 

(Response) FDA believes the criteria 

described in § 312.8(b)(1) concerning 

charging for a sponsor’s drug provide 

sufficient flexibility to evaluate requests 

to charge for a drug in clinical trials in 

different phases of drug development 

(also see response to comment 19 

discussing the variable basis for 

assessing whether a drug has a potential 

clinical benefit that would be a 

significant advantage over available 

products and response to comment 20 

discussing when a clinical trial would 

be considered essential to establishing 

that the drug is effective and safe). 

2. Charging for the Sponsor’s Own Drug 

in a Clinical Trial 

Proposed § 312.8(b)(1) set forth three 

criteria, in addition to the general 

criteria in § 312.8(a), that needed to be 

met to permit a sponsor to charge for its 

own investigational drug in a clinical 

trial. 

a. Significant advantage over 

available therapy. Section 312.8(b)(1)(i) 

of the proposed rule provided that a 

sponsor who wishes to charge for its 

investigational drug, including 

investigational use of its approved drug, 

must provide evidence that the drug has 

a potential clinical benefit that, if 

demonstrated in the clinical 

investigations, would provide a 

significant advantage over available 

products in the diagnosis, treatment, 

mitigation, or prevention of a disease or 

condition. 

(Comment 18) One comment stated 

that this criterion is not meaningful as 

it would apply to all drugs that are 

selected to be developed by 

pharmaceutical and biotechnology 

companies. 

(Response) FDA does not agree that 

all drugs selected to be developed for 

marketing offer a potential significant 

advantage over available therapy. 

Companies often deliberately develop 

drugs that offer only modest advantages 

over existing therapy or appear to be 

similar to existing therapy. There may 

be good commercial and clinical reasons 

to pursue such development. For 

example, there is likely to be variation 

in response to a pharmacologic 

intervention, both in desired treatment 

effect and incidence of adverse effects, 

in different individuals. Thus, the 

availability of similar therapies can 

provide alternatives for those who have 

inadequate responses to a drug or 

experience an adverse reaction even if a 

significant advantage has not been 

clinically shown for any of the 

therapies. This criterion is intended to 

distinguish those types of drugs from 

those for which there are preliminary 

clinical data suggesting a significant 

advantage in the therapy for a given 

disease and for which the development 

program is geared toward establishing 

that advantage. 

(Comment 19) One comment asked for 

clarification about the type and degree 

of evidence needed to show a significant 

advantage, especially at the beginning of 

large phase 3 trials. Another comment 

recommended that this criterion 

concerning a significant advantage be 

replaced with ‘‘evidence of potential 

advantage over available therapy.’’ The 

comment stated that the significant 

advantage standard would be likely to 

prevent a sponsor from charging for its 

own drug because the standard 

presumes that comparative studies have 

been conducted against all the other 

products. 

(Response) The amount and type of 

data needed to demonstrate a potential 

clinical benefit that would be a 

significant advantage over existing 

therapy will vary with the stage of 

development. For a request to charge for 

a large phase 3 trial, ordinarily the 

clinical data developed in phase 2 will 

need to confirm or be consistent with a 

potential significant advantage to satisfy 

this criterion. For a request to charge for 

a trial in an earlier phase of 

development, more preliminary data 

consistent with a potential significant 

advantage will suffice. FDA does not 

agree that comparative data will always 

be necessary to demonstrate a potential 

significant advantage over existing 

therapy. The agency believes that the 

need to provide comparative data is a 

matter of judgment. For example, there 

may be noncomparative phase 2 data 

and a plausible pharmacologic basis that 

suggest a significant advantage over 

existing therapy, and the phase 3 trial 

for which charging is requested may be 

a comparative design intended to 

demonstrate that advantage. Similarly, 

comparative data are not needed if the 

drug is intended to treat a disease or 

subpopulation with a disease, for which 

there is no satisfactory existing therapy 

(see also FDA guidance for industry 

entitled ‘‘Fast Track Development 

Programs—Designation, Development, 

and Application Review’’ (June 2006), 

especially section III.B.2, discussing 

demonstrating a drug’s potential at 

various stages of development). 

FDA also does not agree that charging 

for an investigational drug in a clinical 

trial should be permitted on the basis of 

only a potential advantage over existing 

therapy, without regard to the 

significance of the advantage. FDA 

continues to believe that, as was 

articulated in the preamble to the 

proposed rule (71 FR 75168 at 75171), 

the cost of making a drug available to 

study subjects during development 

should ordinarily be borne by the 

sponsor. Charging for drugs in this 

situation should be reserved for the 

exceptional circumstance in which it is 

necessary to continue development of a 

drug that offers a potential significant 

advantage over existing therapy. 

b. Essential to safety or effectiveness. 

Section 312.8(b)(1)(ii) of the proposed 

rule provided that a sponsor that wishes 

to charge for its investigational drug, 

including investigational use of its 


srobinson on DSKHWCL6B1PROD with RULES2
40880 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

approved drug, must demonstrate that 

the data to be obtained from the clinical 

trial would be essential to establishing 

that the drug is safe or effective for the 

purpose of obtaining initial approval of 

a drug, or would support a significant 

change in the labeling of an approved 

drug (e.g., new indication, inclusion of 

comparative safety information). 

(Comment 20) One comment stated 

that the criterion to show that data 

obtained from the clinical trial are 

essential to show safety or effectiveness 

or make a significant labeling change 

would make it unreasonably difficult for 

a sponsor to obtain authorization to 

charge because it would require a 

sponsor to show that all other trial 

components of the development 

program have been identified and 

marketing approval could not be 

obtained without completion of the trial 

for which charging is requested. The 

comment recommended that, instead, 

the criterion should be that the study is 

a phase 2 or 3 protocol that was not put 

on hold by FDA (§ 312.42) or the trial 

was agreed to by FDA through the 

special protocol assessment process (see 

FDA guidance for industry entitled 

‘‘Special Protocol Assessment’’ (May 

2002)). Another comment stated that 

this criterion is vague and overly broad 

because, arguably, all clinical trials 

conducted in a drug development 

program would be essential to show 

safety and effectiveness. 

(Response) FDA does not agree that 

this provision is too restrictive. The 

phrase ‘‘essential to establishing that the 

drug is effective or safe for the purpose 

of obtaining initial approval of a drug’’ 

is intended to limit charging—whether 

in comparative trials, trials of a new use 

of an approved drug, or other trials—to 

those trials that will generate 

effectiveness or safety data on the 

endpoint or endpoints intended to 

establish safety or effectiveness (e.g., 

clinical outcome on the disease of 

interest), trials that would provide 

direct corroborative support for such 

trials, and trials that were necessary 

prerequisites to the major safety and 

effectiveness trials (e.g., essential to 

refining the study design). Such trials 

would include later phase (e.g., phase 2 

and 3) controlled clinical trials 

evaluating the clinical endpoints that 

would establish safety and effectiveness 

(e.g., trials designed to demonstrate the 

drug’s the potential clinical advantage), 

but could also include important 

clinical pharmacology studies (e.g., 

thorough QT prolongation studies, drugdrug interaction studies), safety studies, 

and other types of studies that would 

provide essential corroboration for the 

data from the major safety and 

effectiveness trials, or aid in the design 

of those trials. 

FDA does agree that its determination, 

pursuant to a special protocol 

assessment, that a phase 3 study design 

and protocol are adequate to provide 

effectiveness data that would support 

approval of a marketing application 

would, in most cases, mean that the 

clinical trial is essential to establishing 

that the drug is effective or safe for the 

purpose of obtaining initial approval of 

the drug. 

FDA does not agree that this provision 

is overly broad. FDA acknowledges that 

the trials conducted as part of a clinical 

development program typically build on 

one another. However, it is very 

unlikely that all such trials would be 

considered essential because they 

provide the data on the endpoints that 

establish safety and effectiveness, 

essential corroboration for those data, or 

are essential prerequisites to the major 

safety and effectiveness studies (e.g., 

because they enable the design to be 

refined so that the data will support 

approval). 

c. Extraordinary cost. Section 

312.8(b)(1)(iii) of the proposed rule 

provided that a sponsor that wishes to 

charge for its investigational drug, 

including investigational use of its 

approved drug, must demonstrate that 

the clinical trial could not be conducted 

without charging because the cost of the 

drug is extraordinary. The proposed rule 

stated that the cost may be extraordinary 

due to manufacturing complexity, 

scarcity of a natural resource, the large 

quantity of drug needed (e.g., due to the 

size or duration of the trial), or some 

combination of these or other 

extraordinary circumstances. 

(Comment 21) Several comments had 

significant concerns about the 

extraordinary cost criterion. Two 

comments maintained that this 

provision is too vague and subjective for 

a regulatory requirement. They argued 

that whether a cost is extraordinary 

depends to a certain extent on the 

resources and perspective of the 

sponsor, i.e., what may be an 

extraordinary cost for a small company 

with limited resources may not be so for 

a larger company with more resources. 

One of these comments requested 

additional guidance, either in the rule or 

in a separate guidance document, on the 

meaning of extraordinary cost. Two 

comments stated that this requirement 

is more stringent than the 1987 charging 

rule, which requires only that the 

sponsor provide a written explanation 

for why charging is necessary for the 

sponsor to undertake or continue the 

trial. These comments recommended 

that FDA delete the extraordinary cost 

criterion and replace it with the 

requirement from previous § 312.7(d)(1) 

requiring a full written explanation of 

the reasons charging is necessary for the 

sponsor to undertake or continue the 

clinical trial or expanded access. One 

comment requested that FDA clarify 

how extraordinary cost is to be 

determined for a large company with 

numerous corporate affiliates, each with 

separate budgets. 

(Response) In the proposed rule, FDA 

attempted to describe the concept of 

extraordinary cost in a way that would 

make the determination independent of 

the relative resources of a sponsor. FDA 

perceived that this approach would be 

fairer than an approach based on 

sponsor resources, arguably making cost 

recovery equally accessible to all 

sponsors. FDA continues to believe that 

there are potential scenarios in which a 

drug cost would be so great that it 

would be considered extraordinary for 

any sponsor no matter how great a 

sponsor’s resources. And FDA believes 

that the parameters set forth in the final 

rule—that the cost may be extraordinary 

due to manufacturing complexity, 

scarcity of a natural resource, the large 

quantity of drug needed (e.g., due to the 

size or duration of the trial), or some 

combination of these or other 

extraordinary circumstances—provide a 

functional objective test for whether a 

cost is extraordinary. 

However, FDA also acknowledges 

that, as a practical matter, whether a 

drug cost is extraordinary in any given 

case will often be a function of the 

resources of a given sponsor. FDA 

believes that the rule should reflect the 

reality that a sponsor seeking cost 

recovery for a drug used in a clinical 

trial will more often be a sponsor with 

relatively fewer resources compared to 

the larger, established pharmaceutical 

and biotechnology companies. 

Accordingly, FDA has revised the 

extraordinary cost criterion in 

§ 312.8(b)(1)(iii) to clarify that a sponsor 

can demonstrate a cost is extraordinary 

relative to the resources available to that 

sponsor. This revision is also responsive 

to the comments suggesting that we 

retain the requirement in the previous 

regulation that a sponsor provide a 

written explanation of why charging is 

necessary to conduct the study. The 

sponsor would be able to provide such 

an explanation to demonstrate that the 

cost is extraordinary for that sponsor. 

(Comment 22) One comment stated 

that extraordinary cost is not a 

meaningful distinguishing criterion in 

the current environment as, arguably, 

most new therapies have extraordinary 

costs. 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40881 

(Response) FDA does not agree that 

the concept of extraordinary drug cost is 

meaningless in the current environment. 

Extraordinary cost in this rule does not 

refer to the amount that would 

eventually be charged for a marketed 

drug in a commercial setting. Arguably, 

such costs are often extraordinary 

compared to historical pricing. 

Extraordinary cost in this rule refers 

only to the actual cost of the drug 

product in the clinical trial. This rule is 

primarily intended to provide cost 

recovery in clinical trials in cases in 

which the drug product itself is 

expensive to provide because of 

difficulty in manufacturing costs, 

scarcity of a natural resource needed to 

manufacture the drug, the large quantity 

of clinical supply needed to conduct 

studies, or other extraordinary 

circumstances, and therefore represents 

a substantial added cost above and 

beyond the routine costs associated with 

the conduct of the study. 

(Comment 23) Two comments stated 

that FDA lacked the expertise to decide 

whether the cost of a drug is 

extraordinary and would need to review 

factual analyses about the sponsor’s 

costs, comparative costs of other 

treatments, and arguments about what 

costs are ordinary versus extraordinary. 

(Response) FDA does not believe that 

it will be difficult to differentiate drugs 

that are truly extraordinarily costly by 

objective measures from those that are 

not, or that such determinations will 

require special expertise. FDA believes 

it has enough accumulated experience 

with the vast array of drugs within its 

purview to have the ability to make 

such determinations about the relative 

costs of various drugs. 

(Comment 24) Two comments 

expressed concerns with the 

requirement in § 312.8(b)(1)(iii) that a 

sponsor ‘‘[d]emonstrate that the trial 

could not be conducted without 

charging because the cost of the drug is 

extraordinary’’ (emphasis added). The 

comments stated that the more 

appropriate inquiry is whether a 

sponsor would not conduct a trial absent 

cost recovery because the cost is 

extraordinary, so, presumably, it would 

not be in the sponsor’s commercial 

interest to conduct the trial. Similarly, 

another comment stated that companies 

may choose not to develop a drug 

because it would not be lucrative, but 

that does not mean the drug could not 

be developed. 

(Response) The charging regulation is 

not intended to provide a mechanism to 

subsidize drug development generally 

or to provide an incentive to reconsider 

development of a drug that a sponsor 

has elected not to develop because it 

was not predicted to be profitable (e.g., 

would not generate enough revenue to 

recoup development costs and provide 

a profit). The intent of the final rule is 

to address the situation in which the 

very high, near-term cost of making the 

drug available to subjects in a clinical 

trial is a deterrent to development, not 

the drug’s long-term, potential 

profitability. Therefore, FDA believes 

that the appropriate inquiry is whether 

a trial could not be conducted without 

charging because the cost of the drug is 

extraordinary. 

(Comment 25) One comment stated 

that the need to charge could be for 

reasons other than extraordinarily high 

manufacturing costs. The comment 

maintained that small biotechnology 

companies have difficulty obtaining 

funding for clinical trials even when the 

product is promising and the rule 

should recognize a sponsor’s inability to 

obtain funding as a reason for charging 

in a clinical trial. 

(Response) As discussed in the 

preceding comment response, charging 

for investigational drugs under this rule 

is not intended to provide funding for 

clinical trials or drug development 

generally. The intent is to address the 

situation in which there is a very high 

cost associated with making a drug 

available to clinical trial subjects and 

that drug cost prevents continued 

development unless the cost of the drug 

can be recouped during development. 

Therefore general development costs, 

such as costs associated with 

conducting and monitoring a clinical 

trial, should not be incorporated in the 

amount charged for the investigational 

drug and the lack of funding for such 

costs is not an independent basis for 

permitting charging for the study drug 

(but could be a factor in assessing 

whether the cost is extraordinary for a 

given sponsor under § 312.8(b)(1)(iii)). 

FDA recognizes that in most drug 

development scenarios, the costs 

associated with the conduct of clinical 

trials and drug development generally 

are greater than the costs of the 

investigational drug product, and the 

development costs may be a deterrent to 

continuing development of a drug. 

However, FDA does not believe that 

incorporating those costs into an 

amount charged for the investigational 

drug is the appropriate mechanism to 

address that situation. If a sponsor 

wishes to recover from trial subjects 

other costs associated with the conduct 

of a clinical trial (e.g., the costs of 

medical care necessitated by 

participation in a clinical trial), FDA 

believes that recovery should occur 

independent of any charge for the drug 

product. 

(Comment 26) One comment 

maintained that the extraordinary cost 

requirement, when applied to charging 

for the sponsor’s approved drug in a 

trial evaluating a new use of that drug, 

would discourage manufacturers from 

developing new uses for approved 

products. 

(Response) FDA believes that the 

criteria for permitting charging should 

be the same for charging for the 

sponsor’s investigational drug in trials 

to support initial marketing approval as 

for charging in trials of a sponsor’s 

approved drug for a new indication. In 

each, the cost of the drug is a routine 

business expense that would ordinarily 

be recouped after approval of the drug 

or new indication, and subjects are 

being asked to pay for an unapproved 

product or unapproved use in a setting 

in which charging for the drug is not the 

norm. The agency is aware that there are 

many factors that a sponsor weighs in 

determining whether to develop an 

approved drug for a new use. FDA does 

not believe that limiting charging for the 

sponsor’s approved drug in a clinical 

trial to situations in which the cost of 

the drug is extraordinary would, in most 

cases, be the deciding factor in a 

sponsor’s decision to develop or not 

develop a new indication. 

3. Charging for an Approved Drug 

Obtained From Another Entity for Use 

as an Active Control or in Combination 

With Another Drug 

Proposed § 312.8(b)(2) described the 

criteria for charging for an approved 

drug obtained from another entity for 

use as an active control or in 

combination with another drug. To 

charge in this situation a sponsor must: 

• Demonstrate that the clinical trial is 

adequately designed to evaluate the 

safety and effectiveness of the sponsor’s 

drug and 

• Demonstrate that the holder of the 

approved application is not providing 

the drug to the sponsor free of charge. 

(Comment 27) Many comments 

expressed concerns with the provisions 

in the proposed rule concerning 

charging for approved drugs obtained 

from another entity for use as an active 

control or in combination with another 

drug. Three comments stated that FDA 

approval should not be required to 

charge for approved drugs when the 

drugs are used for their approved or 

medically accepted indications and at 

approved or medically accepted doses 

and dose regimens. One comment 

opined that the cost of approved drugs 

used in a trial for medically accepted 

purposes is not a drug development 

expense that should be borne by the 

sponsor. Two comments stated that the 


srobinson on DSKHWCL6B1PROD with RULES2
40882 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

rule should not distinguish between an 

approved drug obtained from another 

entity and an approved drug that is the 

sponsor’s own drug and charging should 

be permitted for both. Another comment 

noted that the rationale that trial 

subjects should not be charged for 

exposing themselves to the risks of an 

unproven drug does not apply to 

approved drugs used for a medically 

accepted purpose. One comment stated 

that pharmaceutical companies seldom 

charge patients for the cost of an 

approved drug used in a clinical trial. 

Two comments stated that the 

investigator commonly buys approved 

drugs and bills the patient’s health 

insurance or the investigator writes a 

prescription for the patient, who fills 

the prescription at a pharmacy that bills 

the patient’s insurance. 

Several comments also raised 

concerns that the charging regulation 

might interfere with routine 

reimbursement by third-party payers for 

approved drugs used for their approved 

indications in clinical trials. Some 

comments stated that, when approved 

drugs used as comparators are charged 

for in a clinical trial, they are ordinarily 

dispensed through the normal 

distribution channel—either an 

inpatient or outpatient pharmacy—and 

third-party payers routinely reimburse 

for such uses. One comment asked FDA 

to clarify that the proposed rule does 

not apply to a situation in which the 

sponsor is not involved in directly 

supplying approved drugs used as 

comparators or in combination and does 

not incur direct acquisition or handling 

costs that it then seeks to pass on to trial 

subjects, such as when the drug is 

dispensed from a pharmacy. 

One comment stated that requiring 

sponsors to seek authorization to charge 

in cases in which the sponsor is not 

directly acquiring an approved drug 

from another entity, such as cases in 

which the approved drug is obtained or 

prescribed by investigators and subjects 

are billed by the investigator or 

pharmacy, would dramatically alter 

existing practice without benefiting trial 

subjects. The comment stated that a 

large number of clinical studies would 

need to be submitted for FDA review, 

dramatically increasing the 

administrative burden on FDA to review 

charging requests for affected trials and 

on sponsors in making submissions. 

(Response) The agency agrees that 

requiring sponsors to obtain 

authorization to charge for approved 

drugs obtained from another entity for 

use as active controls or in combination 

with another drug, or for other uses is 

not necessary. We recognize that one of 

the major rationales for limiting 

charging—that the safety and 

effectiveness of the drug is unproven— 

is often not present in this situation. 

Moreover, FDA believes there would 

almost never be a basis to deny a request 

to charge for an approved drug for use 

as active control or in combination with 

another drug under the criteria in the 

proposed rule. FDA also acknowledges 

the potential for significant 

administrative burdens associated with 

complying with the proposed charging 

requirements if, as the comments stated, 

the current practice in many cases is 

simply to have the approved drug 

dispensed from a pharmacy and have 

patients or third parties pay the usual 

cost for the drug. Moreover, FDA does 

not want to impose a regulatory 

requirement that might somehow 

interfere with the way in which drug 

costs are reimbursed by third-party 

payers. Accordingly, in the final rule, 

FDA has revised proposed § 312.8(a) 

and deleted proposed § 312.8(a)(2) and 

(a)(3), to clarify that a sponsor need not 

obtain authorization to charge for an 

approved drug used for an approved 

indication in a clinical trial done under 

an IND. 

(Comment 28) Three comments stated 

that approved drugs used as active 

controls or in combination with another 

drug are not investigational because 

they are approved and are not being 

‘‘investigated’’ in the clinical trial. 

(Response) FDA disagrees. When an 

approved drug is used as an active 

control or in combination with another 

drug (e.g., as standard therapy in a study 

comparing standard therapy to standard 

therapy plus a new investigational 

therapy), the treatment effect of the 

active control or the standard therapy is 

being measured and compared to the 

new therapy. Therefore, the approved 

drug is part of the clinical investigation, 

and hence an investigational drug for 

purposes of part 312. Notwithstanding 

that such use is subject to part 312, FDA 

has revised the proposed charging rule 

so that sponsors are no longer required 

to obtain authorization to charge for 

approved drugs obtained from another 

entity for use as active controls or in 

combination with another therapy (as 

discussed in the preceding comment 

response). 

(Comment 29) One comment argued 

that sponsors should be able to charge 

for approved drugs without FDA 

authorization when used in clinical 

trials for ‘‘medically accepted’’ uses, 

which the comment defined as uses 

supported by a recognized compendium 

such as U.S. Pharmacopeia Drug 

Information (USP DI). 

(Response) As discussed in the 

responses to comments 27 and 31, FDA 

has revised the proposed rule to remove 

the requirement that a sponsor obtain 

prior approval to charge for an approved 

drug that the sponsor must obtain from 

another source for use as an active 

control or in combination with another 

drug, or in a trial evaluating the 

approved drug for a new use or to obtain 

important safety information. However, 

the final rule retains the requirement 

that a sponsor studying its own 

approved drug for a new indication or 

to support another type of significant 

labeling change must obtain approval to 

charge for the drug in the study. FDA 

does not agree that whether the use of 

the drug is ‘‘medically accepted’’ by a 

recognized compendium should be a 

distinguishing criterion for determining 

whether the sponsor should be required 

to obtain authorization to charge for its 

drug in that situation. 

(Comment 30) One comment asked 

how a trial blind could be maintained 

if there is charging for a competitor’s 

product used as an active control, but 

not for the sponsor’s investigational 

drug. 

(Response) We note that the final rule 

removes the requirement of the 

proposed rule that sponsors seek FDA 

authorization to charge for a 

competitor’s product used as an active 

control. In general, FDA believes that 

maintaining the trial blind is the 

responsibility of the sponsor. 

4. Charging for an Approved Drug 

Obtained From Another Entity in a 

Clinical Trial of the Drug 

Proposed § 312.8(b)(3) provided that, 

for a sponsor to charge for an approved 

drug obtained from another source in a 

clinical trial to evaluate that drug, it 

must: 

• Demonstrate that the clinical trial is 

adequately designed to evaluate the 

safety or effectiveness of a new 

indication or to provide important 

safety information related to an 

approved indication and 

• Demonstrate that the holder of the 

approved application is not providing 

the drug to the sponsor free of charge. 

(Comment 31) Two comments stated 

that the requirement that a sponsor 

seeking to charge for an approved drug 

obtained from another source must 

demonstrate that the trial design is 

adequate to evaluate the effectiveness of 

the new indication is unnecessary 

because it essentially duplicates what a 

sponsor is required to demonstrate to be 

allowed to proceed with the trial under 

the IND review process. The comments 

argue that the fact that FDA has not 

placed the trial on clinical hold 

(§ 312.42) should be enough evidence 

that FDA considers the trial of adequate 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40883 

design. One comment stated that 

whether the drug is available without 

charge does not require FDA review. 

One comment asked FDA to clarify what 

constitutes sufficient evidence that the 

sponsor charging for a drug has not 

received the drug free of charge. 

Another comment suggested that 

additional criteria be added as a 

safeguard to ensure that drug is not 

being made available free of charge, 

such as representation by the sponsor 

that the manufacturer is not funding or 

supporting the trial in any way. 

(Response) FDA acknowledges that 

the proposed criteria for obtaining 

authorization to charge for an approved 

drug that the sponsor must obtain from 

another entity in a trial of a new use of 

that drug, or to obtain important new 

safety information, do not present a 

significant barrier to obtaining cost 

recovery. FDA intended to present a 

relatively low barrier to encourage the 

kinds of trials that might not be of 

commercial interest to the drug 

manufacturer or to otherwise encourage 

trials that would further elucidate the 

characteristics of approved drugs. FDA 

agrees that, for phase 2 and 3 trials, the 

fact that the trial has not been placed on 

clinical hold would ordinarily be 

sufficient to satisfy the criterion that the 

trial is adequately designed to evaluate 

the unapproved drug for a new 

indication. FDA also acknowledges that 

it intended to rely primarily on the 

representations of the sponsor for 

assurance that the drug was not being 

made available free of charge. 

In light of these comments, FDA now 

recognizes that, based on the criteria in 

the proposed rule, there would seldom 

be a basis to deny a request to charge for 

an approved drug that a sponsor must 

obtain from another source to study a 

new use or to obtain important new 

safety information. FDA also recognizes 

that the cost recovery calculation for 

this type of use would usually be very 

straightforward—ordinarily, the 

sponsor’s acquisition cost if the sponsor 

purchases the drug directly or the cost 

of the drug when dispensed from a 

pharmacy. Therefore, FDA concludes 

that to require submission of a request 

to charge for an approved drug obtained 

from another source would often be a 

needless administrative burden for the 

sponsor and FDA. Accordingly, we have 

decided not to finalize proposed 

§ 312.8(b)(3) in this final rule. 

(Comment 32) One comment stated 

that the ability to charge for an 

investigational drug obtained from 

another entity for use in a clinical trial 

of the drug should be limited to 

nonprofit organizations. The comment 

further recommended that the 

organization be required to demonstrate 

that it sought grant funds for the trial 

and any denial of such funds was not 

due to lack of merit in the research plan. 

(Response) FDA does not agree that 

the ability to charge for an approved 

drug obtained from another entity 

should be limited to nonprofit 

organizations. As discussed in the 

previous response, FDA has removed 

from this final rule the proposed 

requirement that a sponsor obtain prior 

approval to charge for an approved drug 

obtained from another entity for use in 

a trial of the approved drug. Thus, any 

type of sponsor can charge for such 

drugs without obtaining authorization 

from FDA. 

FDA hopes that sponsors that must 

obtain a drug from another entity would 

ordinarily explore all reasonable 

financing options (e.g., grants from 

various sources, funding from the drug 

manufacturer, a drug supply from the 

drug manufacturer) before seeking to 

charge trial subjects for the drug. 

However, FDA does not believe that it 

is necessary to specify in regulation that 

a sponsor exhaust all available 

alternative financing options before 

charging for the study drug. 

5. Duration of Charging in a Clinical 

Trial 

(Comment 33) One comment 

interpreted the provision stating that the 

authorization to charge for a drug in a 

clinical trial will usually last for the 

duration of the trial, unless FDA 

specifies a shorter period, to mean that 

FDA’s approval of the IND (after 30 

days) constitutes authorization to charge 

for an approved drug in a trial of a new 

indication for the drug as long as the 

protocol states that the sponsor or 

investigators may charge for the drug. 

(Response) FDA disagrees with this 

interpretation. Section 312.8(a)(3), 

which applies to all requests to charge, 

requires that a sponsor obtain prior 

written authorization from FDA to 

charge for an investigational drug. A 

sponsor must specifically request to 

charge under the applicable paragraph 

in § 312.8 and obtain authorization to 

charge pursuant to that request before it 

can charge for a trial drug. No provision 

in this final rule should be construed to 

mean that FDA’s failure to place a 

protocol on clinical hold constitutes 

implicit authorization to charge for an 

investigational drug, notwithstanding 

that the protocol contains a provision 

stating that the sponsor intends to 

charge. 

E. Charging for Expanded Access to 

Investigational Drugs for Treatment Use 

Proposed § 312.8(c) set forth criteria 

for charging for the three types of 

expanded access to investigational 

drugs for treatment use described in 

new subpart I of part 312—individual 

patient INDs, intermediate-size patient 

population INDs, and treatment INDs 

(see the expanded access final rule 

published elsewhere in this issue of the 

Federal Register). FDA’s primary 

concern with charging patients in 

expanded access settings is that 

charging not interfere with the 

development of investigational drugs for 

commercial marketing. Therefore, under 

proposed § 312.8(c)(1), a sponsor 

seeking to charge for expanded access 

use must provide reasonable assurance 

that charging will not interfere with 

developing the drug for marketing 

approval. To provide such assurance for 

a treatment IND or protocol under 

§ 312.320, a sponsor must include 

evidence of sufficient enrollment in any 

ongoing clinical trial(s) needed for 

marketing approval to reasonably assure 

FDA that the trials will be successfully 

completed as planned (§ 312.8(c)(2)(i)); 

evidence of adequate progress in the 

development of the drug for marketing 

approval (§ 312.8(c)(2)(ii)); and 

information submitted under a 

sponsor’s general investigational plan 

specifying the drug development 

milestones the sponsor plans to meet in 

the next year (§ 312.8(c)(2)(iii)). 

Proposed § 312.8(c)(3) provided that 

the authorization to charge for an 

expanded access use is limited to the 

number of patients authorized to receive 

the drug under the treatment use 

protocol or IND, if there is a limitation. 

Proposed § 312.8(c)(4) provided that 

the authorization to charge for expanded 

access may continue for 1 year from the 

time of FDA authorization and that 

sponsors may request that FDA 

reauthorize charging for additional time 

periods. 

1. General Comments 

(Comment 34) One comment objected 

to the idea that sponsors could only 

charge for expanded access if the cost 

was extraordinary. 

(Response) FDA believes this 

comment misread the proposed rule. 

The cost of an investigational drug need 

not be extraordinary for a sponsor to be 

able to charge for the drug under an 

expanded access IND or protocol in 

subpart I. That extraordinary cost 

criterion in the proposed 

§ 312.8(b)(1)(iii) applied only to 

charging for a sponsor’s investigational 

drug in a clinical trial of that drug under 


srobinson on DSKHWCL6B1PROD with RULES2
40884 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

proposed § 312.8(b)(1). Moreover, this 

criterion has now been eliminated in the 

final rule (see comments 21 through 26). 

(Comment 35) One comment stated 

that there is a conflict between the 

proposed rule on charging and the 

proposed rule on expanded access 

because the charging rule would not 

permit charging for expanded access for 

individual patients or intermediate-size 

patient populations if there were no 

ongoing or planned clinical trial that 

would support marketing approval. One 

comment asked that charging for 

individual patient expanded access be 

permitted. The comment also stated that 

it was not clear if charging was 

permitted for intermediate-size patient 

population expanded access. One 

comment stated that sponsors should be 

permitted to charge for investigational 

drugs for all types of expanded access 

programs, provided that charging will 

not impede drug development. 

(Response) FDA believes these 

comments misread the proposed rule. 

Proposed § 312.8(c)(1) stated that a 

sponsor who wishes to charge for an 

investigational drug for any treatment 

use under subpart I of part 312 must 

provide reasonable assurance that 

charging will not interfere with 

developing the drug for marketing 

approval. Moreover, the preamble to the 

proposed rule specifically stated that 

one of the major reasons that FDA was 

revising the 1987 charging rule was to 

provide authority to charge for 

investigational drugs under the two new 

categories of expanded access for 

treatment use—individual patient and 

intermediate-size population expanded 

access INDs (71 FR 75168 at 75169 

through 75170). For expanded access 

under a treatment IND or treatment 

protocol, the proposed rule stated that 

such assurance must also include the 

specific types of evidence in 

§ 312.8(c)(2), including evidence of 

sufficient enrollment in any ongoing 

clinical trials needed for marketing 

approval. However, the specific types of 

evidence identified apply only to 

requests to charge for expanded access 

use under new § 312.320 (treatment IND 

or treatment protocol) (see § 312.8(c)(2)). 

Because individual patient INDs (new 

§ 312.310) and intermediate-size patient 

population INDs can occur earlier in 

drug development and typically involve 

much smaller numbers of patients, FDA 

did not think it would be helpful to 

specify in the rule how to provide 

reasonable assurance that charging will 

not interfere with developing the drug 

for marketing approval for those types of 

expanded access program. To clarify 

that the evidentiary requirements apply 

only to treatment INDs or treatment 

protocols, we have revised § 312.8(c)(2) 

to describe § 312.320 as covering 

treatment INDs and treatment protocols, 

rather than merely citing to the section 

as the proposed rules had done. 

2. Increasing Access 

In the preamble to the proposed rule, 

FDA identified the costs associated with 

making investigational drugs available 

for treatment use under expanded 

access programs as a potential obstacle 

to the availability of such drugs (section 

II.C of the proposed rule). By facilitating 

charging for such use, FDA stated that 

it hoped there would be greater access 

to investigational drugs (section VI.E of 

the proposed rule). 

(Comment 36) Several comments 

expressed concerns about the 

implications of permitting charging for 

investigational drugs for treatment use 

under expanded access programs on 

how such drugs are allocated. Some 

comments stated that the proposed rule 

may not increase expanded access 

because third-party payers are not likely 

to reimburse for investigational 

therapies, thus depriving patients not 

able to afford such drugs. One comment 

added that neither patients nor insurers 

should pay for investigational drugs or 

treatments and that the proposed rule 

will significantly exacerbate the current 

problems of access to, and affordability 

of, health care. Another comment stated 

that, although the poor may qualify for 

company-sponsored assistance to pay 

for investigational drugs, middle-class 

patients may not be eligible for such 

programs yet still be unable to afford 

such drugs. Two comments stated that 

permitting charging only for direct costs 

may not increase access because it will 

not provide enough financial incentive 

for companies to offer access. One 

comment agreed that permitting 

charging for investigational drugs made 

available under expanded access 

programs will result in greater access to 

investigational drugs. 

(Response) FDA recognizes that 

permitting cost recovery for expanded 

access to investigational drugs for 

treatment use will not remove all 

barriers to access. The agency shares the 

concerns about equitable access to such 

drugs among patients with varying 

financial resources. FDA’s goal, with 

this cost recovery provision, is to enable 

willing sponsors to make a drug 

available that could not otherwise be 

made available or to make a drug more 

widely available than would be possible 

absent cost recovery, thus potentially 

benefiting more individuals than would 

have benefited absent charging. FDA has 

no control over reimbursement policy. 

FDA hopes that sponsors that charge for 

investigational drugs under expanded 

access programs will also make 

provision for those who cannot afford 

such therapies. 

FDA believes that permitting sponsors 

to recover all costs associated with 

making an investigational drug available 

and administering an expanded access 

program provides a reasonable incentive 

for sponsors to make investigational 

drugs available for treatment use. As 

discussed in greater detail in comment 

46, FDA believes the cost recovery 

provision, to the extent it allows 

companies to recover all the direct costs 

associated with making the drug 

available and administering the 

expanded access program, removes a 

significant obstacle to making drugs 

available for treatment use for some 

sponsors (e.g., sponsors with limited 

resources for expanded access 

programs) while preventing 

commercialization of investigational 

drugs. 

(Comment 37) One comment stated 

that FDA should closely monitor 

expanded access programs for which it 

permits cost recovery to ensure that 

sponsors honor any commitments to 

make drugs available to those who 

cannot afford them. 

(Response) FDA hopes that sponsors 

would, of their own initiative, honor 

their commitments to make 

investigational drugs available to those 

who cannot afford them. However, FDA 

cannot require a sponsor to honor a 

commitment to provide a drug to those 

who cannot afford it, or otherwise 

compel a sponsor to provide expanded 

access. FDA also recognizes that 

circumstances may change such that a 

sponsor is no longer able to honor a 

commitment to make investigational 

drugs available to those who cannot 

afford to pay for them. 

(Comment 38) One comment stated 

that permitting charging for 

investigational drugs for expanded 

access under subpart I will create a 

dichotomy between rich and poor 

because patients who can afford to pay 

for investigational drugs can be 

guaranteed access under treatment use 

protocols, but those who cannot will be 

forced to enroll in clinical trials with 

only a chance that they will receive the 

investigational drug in question. 

(Response) FDA does not agree that 

this rule will lead to a situation in 

which those with fewer resources 

disproportionately bear the burdens of 

participating in clinical trials. A sponsor 

cannot charge for an investigational 

drug under a treatment IND unless there 

is evidence of sufficient enrollment in 

any ongoing clinical trials needed for 

marketing approval to provide FDA 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40885 

reasonable assurance that the trials will 

be successfully completed 

(§ 312.8(c)(2)(i)). FDA anticipates, 

therefore, that in most cases, the 

majority of subjects needed to be 

enrolled in a trial will have been 

enrolled before the drug is available 

under a treatment IND in which the 

sponsor charges for the drug, so the trial 

will be fully enrolled. In addition, 

access to investigational drugs under an 

individual patient or intermediate-size 

population expanded access program is 

usually limited to individuals who are 

ineligible to enroll in controlled clinical 

trials. Section 312.310(a)(2) provides 

that FDA must determine that a patient 

seeking access to a drug under an 

individual patient IND cannot obtain 

the drug under another IND or protocol, 

which would include a clinical trial or 

a larger expanded access IND. Section 

312.315(a)(2) explains that the 

intermediate-size patient population 

IND for a drug being developed is 

intended to address the situation in 

which patients requesting access to a 

drug are unable to participate in a 

clinical trial of the drug because, for 

example, they do not meet enrollment 

criteria, enrollment is closed, or the trial 

site is not geographically accessible. For 

these reasons, FDA believes this 

charging rule will not have a significant 

impact on the distribution of 

individuals participating in clinical 

trials and expanded access programs 

based on relative wealth. 

(Comment 39) One comment stated 

that poor and lower- to middle-class 

patients should not be required to pay 

any costs associated with an 

investigational drug and that health 

insurance plans should be required to 

cover all costs associated with such 

drugs. Another comment stated that the 

rule should specify that patients who 

are uninsured, or those whose insurance 

excludes payment for investigational 

drugs, cannot be charged for an 

investigational drug. One comment 

recommended that permission to charge 

by commercial sponsors be tied to a 

requirement that a percentage of drugs 

will be provided at no cost to the 

uninsured and those whose insurers do 

not cover the costs. Two comments 

recommended that the rule specify that 

a certain percentage of an 

investigational drug for which charging 

is permitted be made available free of 

charge. 

(Response) The agency cannot require 

third-party payers to cover the costs of 

investigational drugs made available 

under expanded access programs. We 

also cannot require sponsors to provide 

a drug free of charge to those who lack 

insurance or whose insurance does not 

cover investigational drugs. The agency 

encourages sponsors to include 

provisions in their expanded access 

programs to assist patients who are 

unable to pay for investigational drugs. 

The details of such plans (e.g., the 

percentage of patients eligible to obtain 

a drug free of charge or the percentage 

of drug supply that will be made 

available free of charge) should be 

determined based on the circumstances 

of the particular expanded access 

program. 

3. Ethical Considerations 

(Comment 40) Two comments stated 

that there are ethical concerns with 

charging patients for expanded access 

use of investigational drugs that may 

have no benefit and pose safety 

concerns. 

(Response) In determining whether to 

permit an expanded access use of an 

investigational drug, FDA assesses 

whether the potential risks are 

reasonable in light of the potential 

benefits, sometimes on the basis of quite 

limited clinical evidence. Therefore, 

FDA agrees that there is a risk that the 

investigational drug will have no benefit 

and, therefore, that a patient will pay for 

an investigational drug that provides no 

benefit. However, if a drug has a 

potential benefit that is reasonable in 

light of the risks associated with the 

drug, and the sponsor must charge to 

make the drug available, FDA believes 

the public health is best served by 

making the drug available to patients for 

a fee, even if the potential benefit is not 

realized in a given patient. FDA believes 

that the ethical concerns expressed in 

these comments can be addressed by an 

informed consent that accurately 

reflects the costs, potential risks, and 

potential benefits. 

4. Non-Interference With Drug 

Development 

(Comment 41) One comment asked 

that FDA define what it means to 

interfere with the development of a drug 

for marketing approval. 

(Response) FDA will use several 

criteria to determine whether charging 

for an investigational drug in a 

treatment IND will interfere with drug 

development. These criteria were 

described in the proposed rule. 

Proposed § 312.8(c)(2) described 

specific criteria needed to provide FDA 

reasonable assurance that charging for 

an investigational drug under a 

treatment IND or treatment protocol 

(new § 312.320) is not interfering with 

drug development. Proposed 

§ 312.8(c)(2)(i) required sponsors to 

provide evidence of sufficient 

enrollment in any ongoing clinical trials 

needed for marketing approval. 

Proposed § 312.8(c)(2)(ii)) required 

sponsors to provide evidence of 

adequate progress in the development of 

the drug for marketing approval. Such 

evidence could include successful 

meetings with FDA before submission of 

an NDA (e.g., a pre-NDA meeting), 

submission of an NDA, or completion of 

other significant drug development 

milestones. Sponsors would also be 

required to submit information under 

their general investigational plans 

(§ 312.23(a)(3)(iv)) specifying the drug 

development milestones they plan to 

meet in the coming year (proposed 

§ 312.8(c)(2)(iii)). FDA could then 

evaluate actual progress made versus 

planned progress to assess the impact, if 

any, of charging for an investigational 

drug under a treatment IND. Negative 

effects on these criteria would be 

considered indications of interference 

with drug development. 

The proposed rule did not provide 

specific criteria for individual (new 

§ 312.310) and intermediate-size patient 

population access INDs (new § 312.315). 

The kinds of situations that present with 

these types of INDs can vary greatly, 

from situations in which there is no 

drug development to assess, to 

anywhere along the spectrum from very 

early in drug development to the last 

stages of drug development. The scope 

can range from a single isolated 

incidence of an individual patient 

treatment use for a use not being 

developed to a late stage intermediatesize population IND for over 100 

patients. The agency believes the factors 

that are relevant to such a determination 

will be as varied as the timeframes and 

scopes for these types of INDs. 

Therefore, FDA does not believe it is 

necessary or helpful to try to describe in 

regulation specific criteria that a 

potential sponsor of an individual 

patient or intermediate-size population 

IND must meet to provide reasonable 

assurance of non-interference with drug 

development. However, because the 

populations are smaller than for a 

treatment IND, the risk of interference 

with drug development is less than with 

a treatment IND, so FDA does not 

believe it will be difficult to 

demonstrate non-interference with drug 

development for most individual patient 

and intermediate-size population INDs. 

5. Treatment INDs or Treatment 

Protocols 

For treatment INDs or treatment 

protocols (new § 312.320), the proposed 

rule included additional criteria for 

charging. Section 312.8(c)(2) of the 

proposed rule provided that for a 


srobinson on DSKHWCL6B1PROD with RULES2
40886 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

treatment IND or protocol, the sponsor 

must provide: 

• Evidence of sufficient enrollment in 

any ongoing clinical trial(s) needed for 

marketing approval to reasonably assure 

FDA that the trial(s) will be successfully 

completed as planned, 

• Evidence of adequate progress in 

the development of the drug for 

marketing approval, and 

• Information submitted under the 

general investigational plan 

(§ 312.23(a)(3)(iv)) specifying the drug 

development milestones the sponsor 

plans to meet in the next year. 

(Comment 42) One comment stated 

that ‘‘evidence of sufficient enrollment 

in any ongoing clinical trial(s) needed 

for marketing approval’’ (§ 312.8(c)(2)(i)) 

and ‘‘evidence of adequate progress in 

the development of the drug for 

marketing approval’’ (§ 312.8(2)(ii)) are 

too vague and do not provide adequate 

safeguards to ensure that charging for an 

investigational drug under a treatment 

IND will not interfere with a drug’s 

development for marketing. The 

comment asked that FDA also require a 

sponsor to submit a copy of, or crossreference to, its general investigational 

plan, including a development timeline 

and clinical trial accrual estimates. The 

comment stated that when requesting 

reauthorization, a sponsor should be 

required to show that its actual 

enrollment is no more than 5 percent 

less than its original estimates or, if 

lower, provide a satisfactory 

explanation for the deviation from 

planned accrual (e.g., smaller than 

anticipated population with the disease 

of interest from which to draw subjects). 

One comment stated that determining 

whether charging is interfering with the 

development of a drug for marketing 

approval would require FDA to analyze 

patterns of enrollment in clinical 

studies and the causes of insufficiencies 

in enrollment, and assess what delays 

are unacceptable. 

(Response) FDA acknowledges that 

applying the criteria concerning drug 

development progress involves 

judgment, but does not agree that these 

criteria are too vague. Modern drug 

development involves the progressive 

development of a body of evidence to 

support a marketing application and 

generally follows a relatively 

predictable course. For given diseases, it 

is possible to predict timeframes for 

development generally and specific 

components of development (e.g., 

individual clinical trials) with some 

precision. It is also true that initial time 

expectations can be overly optimistic 

and require adjustment. However, FDA 

believes a marked deviation from 

expectations that coincides with the 

beginning of an expanded access 

program can be easily recognized and 

interpreted as related to the availability 

of the drug under a treatment IND. For 

this reason, FDA believes that the 

identified criteria provide a reasonable 

basis upon which to judge drug 

development progress, both before and 

after the initiation of a treatment IND, to 

determine if progress is adversely 

affected. 

FDA does not believe a 5-percent 

decrease in clinical trial accrual from a 

planned clinical trial accrual rate would 

be a useful benchmark for determining 

whether a treatment IND is interfering 

with drug development. Typically, 

planned accrual rates are crude 

estimates and lack the precision needed 

to make a 5-percent deviation 

meaningful. In addition, the precision 

with which accrual rates can be 

predicted likely varies for different 

diseases based on their prevalence and 

other factors. For these reasons, FDA 

does not believe that specifying a 

percentage deviation from expected 

clinical trial accrual would be useful for 

evaluating potential interference with 

drug development by a treatment IND. 

FDA also does not agree that 

determining whether charging for a 

treatment IND is affecting drug 

development will require 

comprehensive analyses of clinical trial 

accrual patterns. FDA anticipates that a 

finding that reauthorization is not 

appropriate because charging is 

interfering with enrollment in clinical 

trials will ordinarily be based on very 

strong evidence of a significant effect 

contemporaneous with onset of an 

access program, and not on subtle 

deviations from historical accrual 

patterns for clinical trials in the disease 

of interest. 

6. 1-Year Authorization 

Section 312.8(c)(4) of the proposed 

rule provided that charging for any type 

of expanded access to an investigational 

drug for treatment use may continue for 

1 year from the time of FDA 

authorization unless FDA specifies a 

shorter period. It also provided that a 

sponsor may ask FDA to reauthorize 

charging for additional periods. The 

preamble to the proposed rule stated 

that FDA will ordinarily authorize 

charging for the drug for a period of 1 

year, unless ‘‘there is a particular 

concern that charging would interfere 

with drug development’’ (71 FR 75168 

at 75172). 

(Comment 43) One comment stated 

that the 1-year authorization period was 

unnecessary because FDA can always 

withdraw authorization if the criteria 

are no longer being met. The comment 

added that the provision could delay 

getting drugs to patients if there were a 

delay in reauthorizing charging. 

(Response) The agency does not 

believe it is reasonable to place the 

burden on FDA to investigate whether 

the criteria for charging continue to be 

met because FDA does not have 

independent access to the information 

needed to make that determination. 

FDA would need to request that the 

sponsor provide the necessary 

information. Therefore, FDA believes it 

would be more efficient if that sponsor 

simply provided to FDA the information 

on an annual basis. We do not agree that 

requiring that charging be reauthorized 

annually will delay patient access to 

investigational drugs provided sponsors 

make a timely and complete submission 

seeking reauthorization to charge. In 

most cases, FDA believes the 

determination will be straightforward 

and the review will be completed 

expeditiously. 

(Comment 44) Another comment 

recommended reducing the time that a 

sponsor may charge before seeking 

reauthorization to charge from 1 year to 

6 months because charging for 

investigational drugs always presents a 

risk of compromising enrollment in 

clinical trials. 

(Response) FDA believes the 1-year 

anniversary is a reasonable point in time 

to re-evaluate the charging request for 

most authorizations to charge. If FDA 

has concerns about charging for a 

particular treatment IND, for example, 

where there is a concurrent clinical trial 

still enrolling subjects, the rule provides 

FDA the option to specify a shorter 

period in which to re-evaluate whether 

the criteria for charging continue to be 

met. 

F. Costs Recoverable When Charging for 

an Investigational Drug 

Proposed § 312.8(d) described the 

types of costs that a sponsor can recover 

when charging for an investigational 

drug in a clinical trial and for treatment 

use under an expanded access IND. 

Proposed § 312.8(d)(1) provided that a 

sponsor may only recover the direct 

costs of making an investigational drug 

available. 

Proposed § 312.8(d)(1)(i) described 

direct costs as those incurred by a 

sponsor that can be specifically and 

exclusively attributed to providing the 

drug for the investigational use for 

which FDA has authorized cost 

recovery. Direct costs include costs per 

unit to manufacture the drug (e.g., raw 

materials, labor, and nonreusable 

supplies and equipment used to 

manufacture the quantity of drug 

needed for the use for which charging 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40887 

is authorized) or costs to acquire the 

drug from another manufacturing 

source, and direct costs to ship and 

handle (e.g., store) the drug. 

Proposed § 312.8(d)(1)(ii) described 

indirect costs (those costs that can not 

be recovered when charging for an 

investigational drug) as costs incurred 

primarily to produce the drug for 

commercial sale (e.g., costs for facilities 

and equipment used to manufacture the 

supply of investigational drug, but that 

are primarily intended to produce large 

quantities of the drug for eventual 

commercial sale) and research and 

development, administrative, labor, or 

other costs that would be incurred even 

if the clinical trial or treatment use for 

which charging is authorized did not 

occur. 

1. Direct and Indirect Costs 

(Comment 45) One comment stated 

that FDA lacked the expertise to decide 

whether the price proposed by the 

sponsor would only cover direct costs. 

The comment stated that FDA 

accountants would need to scrutinize 

each sponsor’s asserted direct costs to 

ensure fairness and consistency in its 

handling of the policy and that 

distinguishing between direct and 

indirect costs is likely to be 

complicated. 

(Response) The agency believes that, 

when charging for investigational drugs, 

a sponsor of a clinical trial or expanded 

access program should not be permitted 

to commercialize (e.g., profit from the 

sale of) the drug. Thus, the proposed 

rule set forth criteria that permit a 

sponsor to recover only costs 

specifically attributable to making the 

investigational drug available in the trial 

or expanded access program for which 

cost recovery is authorized (i.e., only 

those costs that would not have been 

incurred but for the provision of the 

drug). We believe the direct cost 

provision as proposed, by differentiating 

between direct costs and indirect costs, 

and not providing for apportionment of 

indirect costs (e.g., overhead and 

general research and development costs) 

simplifies the cost recovery calculation 

to the extent possible and makes clear 

FDA’s objectives concerning what costs 

can be recovered. Therefore, FDA does 

not anticipate major controversies 

concerning cost recovery calculations 

under this rule, or the need to rely 

heavily on financial experts to 

adjudicate such calculations. In the 

event of a significant controversy, FDA 

expects that it will be able to require the 

sponsor to produce supporting 

documentation prepared by an 

independent financial expert attesting 

that the calculation is consistent with 

the cost recovery provisions in this rule. 

(Comment 46) Several comments 

argued that sponsors should be 

permitted to charge for other types of 

costs in addition to those provided for 

in the proposed rule. One comment 

stated that cost recovery should include 

the costs of clinical trials, all related 

research and development costs, and 

administrative, labor, and other costs. 

Two comments stated that FDA should 

permit some cost recovery for research 

and development costs in clinical trials. 

One of the comments requested that 

FDA reconsider its decision to exclude 

research and development costs from 

the cost recovery calculation. The 

comment argued that FDA could 

provide criteria to better define 

recoverable research and development 

costs, thus avoiding the subjectivity and 

arbitrariness concerning recovery of 

research and development costs in the 

1987 charging rule. One comment asked 

that cost recovery be permitted for 

production fixed costs such as capital 

investment and fixed manufacturing 

expenses. Two comments agreed that 

sponsors should only be permitted to 

charge for direct costs. One of the 

comments agreed with the statement in 

the proposed rule that provision of 

unapproved drugs should ordinarily be 

considered part of the cost of doing 

business and that charging for indirect 

costs and overall development costs 

should not be permitted. One comment 

stated that the proposed rule’s 

description of recoverable costs is 

subject to varying interpretations by 

accounting professionals and would 

thus result in inconsistent application of 

the cost recovery provisions. 

(Response) FDA does not agree that 

the cost recovery provision should 

provide for recovery of research and 

development costs incurred to develop 

the drug for marketing approval. For a 

drug that has not yet been approved for 

any purpose, the intent of permitting 

charging for that drug in a clinical trial 

is to provide the opportunity to recoup 

the cost of making the drug available 

when the cost of that drug is 

extraordinary in relation to drug costs 

generally, or in relation to the resources 

of the sponsor, and therefore, highly 

burdensome for a sponsor. The intent is 

not to subsidize the overall 

development of the drug. In general, the 

costs associated with drug development 

are very large, so it is not reasonable to 

expect the relatively small number of 

patients participating in a clinical trial 

(compared to those who will obtain a 

drug once it is on the market) to be able 

to meaningfully subsidize those costs. 

The intent of allowing cost recovery 

for expanded access uses is to remove 

any financial disincentive for a sponsor 

to make a drug available by permitting 

the sponsor to recover direct costs of 

making the drug available plus 

monitoring and administrative costs 

directly associated with the expanded 

access use. The intent is not to allow a 

sponsor to begin recouping its general 

drug development investment in 

advance of marketing approval. FDA 

believes that allowing recovery of those 

generalized costs prior to marketing 

approval would be effectively 

permitting commercialization of an 

unapproved drug. 

The agency also does not agree that 

the cost recovery provision should 

provide for recovery of capital 

investment and fixed manufacturing 

costs, which are incurred by the sponsor 

primarily for the purpose of 

manufacturing sufficient quantities of 

the drug for commercial sale. These 

costs also should be recouped during 

commercial marketing of the drug. 

(Comment 47) One comment asked 

that FDA revise the proposed rule to 

permit cost recovery for the cost of drug 

delivery, which includes formulation, 

packaging, instrumentation, monitoring, 

disposables, setup, nursing, and similar 

costs. 

(Response) It is not necessary to make 

the suggested revisions because such 

costs can be recovered without 

authorization from FDA. Section 

312.8(d)(1) is intended to permit a 

sponsor to recover its direct costs 

incurred in making a drug available 

from the onset of manufacturing to the 

point it arrives at the destination to 

which it was shipped, or acquisition, 

shipping, and handling costs for a drug 

acquired from another source (e.g., 

where manufacturing is outsourced). 

Subsequent costs incurred at a clinical 

trial site (e.g., a hospital or clinic), 

including pharmacy costs (e.g., the cost 

to reformulate a drug for infusion), 

nursing costs (e.g., costs associated with 

administering a drug and monitoring 

study subjects), equipment costs (e.g., 

intravenous (IV) administration sets), 

and costs for study-related procedures 

(e.g., chemistry labs, radiographic 

procedures), are outside the scope of 

this rule. That is, the costs of these 

items and services can be recovered 

without prior authorization from FDA 

(also see response to comment 64, 

which includes a link to the Center for 

Medicare and Medicaid Services (CMS) 

policy concerning reimbursement for 

clinical trial related items and services). 

(Comments 48) One comment stated 

that there might be substantial 

differences in the amount charged per 


srobinson on DSKHWCL6B1PROD with RULES2
40888 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

patient for the same drug if the cost 

were allocated across a small population 

clinical trial compared to a large 

population trial. 

(Response) We agree that this result is 

possible. For example, if a sponsor is 

permitted to charge for a drug in a small 

clinical trial, and the sponsor then 

submits a separate request to charge for 

the drug in a larger subsequent trial of 

the same drug, the drug cost may be 

lower in the larger trial due to 

economies of scale. FDA believes the 

higher cost for the smaller population is 

probably unavoidable and is a 

reasonable outcome for cost recovery 

purposes. 

(Comment 49) One comment stated 

that limiting the amount of cost 

recovery for an approved drug to 

acquisition and handling costs, instead 

of permitting investigators and 

pharmacies to seek normal 

reimbursement amounts, would create 

serious administrative problems because 

it would require investigators to 

establish separate billing and inventory 

accounting systems for trial drugs. The 

comment added that, to the extent that 

community pharmacies are furnishing 

drugs in clinical trials, the proposal to 

limit what they can charge does not 

seem feasible, because they would not 

even be aware of the customer’s status 

as a clinical trial subject. 

(Response) As discussed in comment 

27 and 31, FDA has revised the 

proposed rule so that sponsors that must 

obtain the study drug or an active 

control from another entity (i.e., a 

sponsor who is not the applicant who 

holds the approved application for a 

drug and commercially markets the 

drug) are not required to obtain 

authorization to charge for the drug. 

FDA believes such sponsors should be 

able to cause the approved drug to be 

distributed to trial subjects through 

ordinary distribution channels for 

approved drugs (e.g., an inpatient or 

outpatient pharmacy) pursuant to a 

physician’s order or prescription and to 

cause subjects to be charged the same 

amount that would be charged to a 

patient who received the drug in the 

course of clinical practice. As discussed 

in comment 26, sponsors that conduct 

trials of their own approved drug (e.g., 

a drug that the sponsor commercially 

markets) must obtain prior authorization 

to charge for the trial drug pursuant to 

the criteria set forth in § 312.8(b)(1) of 

this final rule. Such sponsors are 

permitted to recover only their direct 

costs for making the trial drug available 

to subjects as described in § 312.8(d) of 

this final rule. 

(Comment 50) One comment was 

concerned that limiting the amount a 

sponsor would be able to charge for an 

approved drug in a clinical trial to cost 

only would have implications for the 

rebates and discounts that must be made 

to eligible entities (private entities 

receiving grants under the Public Health 

Service Act, and certain hospitals) 

under the Medicaid Rebate and the 

340B Program (section 340B of the 

Public Health Service Act (42 U.S.C. 

256b)). The comment stated that rebates 

and discounts for a drug under these 

programs are based in part on the ‘‘best 

price’’ to any purchaser during each 

calendar quarter and was concerned that 

if the amount charged under this rule 

were included in the ‘‘best price’’ 

determination, the sponsor could incur 

a large liability for rebates and discounts 

to eligible entities. The comment stated 

that such pricing could also be 

construed to establish most favored 

customer pricing that could be used to 

set prices under the Federal Supply 

Schedule contracts with the Federal 

Government. 

(Response) FDA believes that recovery 

of drug costs associated with making an 

approved drug available to subjects in a 

clinical trial is distinct from the 

commercial sale of drugs. The former 

does not involve a commercial sale of 

the drug and is not intended to make a 

drug available for use in a clinical 

practice setting. FDA believes that the 

primary objective of programs for 

Medicaid and the 340B program (by 

which certain federally funded grantees 

and safety net providers may purchase 

prescription drugs at significantly 

reduced prices) and of those agencies 

that administer Federal Supply 

Schedules for pharmaceuticals (e.g., the 

Veterans Administration) is to obtain 

fair pricing relative to the prices paid by 

other entities in the commercial 

marketplace for drugs used in clinical 

practice settings (e.g., in a hospital, for 

outpatient use), and not relative to the 

amount a sponsor charges in the 

unusual circumstance in which it seeks 

to recover its drug cost in a clinical trial. 

However, sponsors who intend to 

charge for an approved drug in a clinical 

trial should consult with CMS 

concerning the implications of cost 

recovery on the best price 

determination. Sponsors should also 

consult with the agencies that 

administer Federal Supply Schedule 

contracts for pharmaceuticals 

concerning the implications for prices 

under those contracts. 

(Comment 51) One comment asked 

that FDA permit cost recovery for direct 

manufacturing costs for equipment and 

reusable supplies used to manufacture 

the investigational drug and marginal 

costs to produce additional 

investigational drugs. 

(Response) The intent of the cost 

recovery provision is to permit cost 

recovery for whatever direct costs are 

attributable to providing the amount of 

drug needed for the clinical trial or 

expanded access use. The rule 

purposefully excludes many other costs 

(e.g., overhead, depreciation, reusable 

supplies, equipment, manufacturing 

facility) that would be incurred even if 

the amount of drug needed was not 

produced, but a small fraction of which 

could be apportioned to the drug supply 

produced under general accounting 

principles. FDA believes these costs 

would ordinarily be a very small 

percentage of the total cost when 

apportioned to the amount of drug 

produced for a clinical trial or expanded 

access program, so permitting recovery 

for these types of costs would create 

needless complexity and administrative 

burdens. For example, FDA would need 

to retain personnel with financial 

expertise to assess a relatively small 

number of very complex cost recovery 

calculations. FDA also believes 

permitting cost recovery for a broader 

array of costs might invite expansive 

and unwarranted interpretations of 

allowable costs, which would create 

additional administrative burdens. 

(Comment 52) Three comments stated 

that FDA should allow charging for the 

market value of an approved drug being 

studied for a new indication. One 

comment stated that when charging for 

approved drugs, normal charges 

incurred at the site at which the drug is 

dispensed (e.g., outpatient or inpatient 

pharmacy) should be permitted. 

(Response) As discussed in comment 

31, FDA has revised the proposed rule 

to eliminate the requirement for prior 

approval to charge for an approved drug 

being studied for a new indication when 

the sponsor must obtain the drug from 

another entity. In this situation, the 

sponsor can cause the drug to be 

distributed to subjects through ordinary 

distribution channels for marketed 

drugs (e.g., inpatient or outpatient 

pharmacies). 

However, a sponsor must obtain prior 

approval to charge, and may recover 

only the sponsor’s direct costs for 

making a drug available, in the 

sponsor’s trial of a new indication or 

use of its own approved drug. FDA 

believes that entities that are marketing 

an approved drug should generally not 

charge for the drug in such trials. As 

discussed in comment 26, sponsors that 

also market the approved trial drug 

should not be able to commercialize an 

unapproved use by charging subjects 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40889 

market value for the drug in a trial of the 

unapproved use. 

2. Recoverable Costs for Expanded 

Access Uses 

Proposed § 312.8(d)(2) provided that 

when charging for an expanded access 

use under proposed § 312.315 

(intermediate-size patient population 

IND or intermediate-size patient 

population protocol) and § 312.320 

(treatment IND or treatment protocol), a 

sponsor may recover, in addition to the 

direct costs of the investigational drug 

as described in proposed 

§ 312.8(d)(1)(i), the costs of monitoring 

the expanded access IND or protocol, 

complying with IND reporting 

requirements, and other administrative 

costs directly associated with the 

expanded access use. 

(Comment 53) Two comments 

recommended that sponsors be allowed 

to charge a reasonable administrative 

fee, rather than basing charging on an 

FDA-reviewed calculation of direct 

costs. The comments suggested that the 

fee could be set by the sponsor after 

consultation with patient groups or 

based on a comparison of the cost of 

treatment with other drugs in the class 

or other therapies. The comments 

further stated that this proposal would 

simplify the administrative burden and 

encourage sponsor participation in 

expanded access programs. 

(Response) FDA believes its proposed 

approach to determining what costs can 

be recovered for making investigational 

drugs available for expanded access 

uses—permitting a sponsor to recover 

its direct drug costs plus costs of 

monitoring the expanded access IND or 

protocol, regulatory compliance 

associated with the IND or protocol, and 

other direct administrative costs—is 

preferable because it simply permits a 

sponsor to recover all costs it incurs to 

provide the drug under the expanded 

access IND or protocol. An 

administrative fee approach involving 

consultation with affected patient 

groups and comparisons of treatment 

costs for similar or related treatment 

options seems to add needless 

complexity and invite arbitrary cost 

recovery determinations. In addition, 

this approach would provide FDA no 

tangible criteria by which to assess 

whether the amount charged represents 

commercialization of an unapproved 

drug. 

(Comment 54) Two comments asked 

FDA to clarify the evidence required to 

support the amount to be charged under 

an expanded access program, especially 

for orphan indications. One of the 

comments asked that FDA develop 

guidance with examples of acceptable 

cost recovery determinations. 

(Response) The recoverable costs for 

orphan indications under an expanded 

access program will be the same as for 

other indications: The direct costs of the 

drug plus its monitoring, regulatory 

compliance, and other administrative 

costs. FDA believes the rule clearly 

reflects this intent and no additional 

criteria or guidance are needed 

concerning what costs can be recovered 

for investigational drugs for orphan 

indications. As discussed in the 

response to comment 48, it is likely that 

the unit cost of a drug will increase as 

the size of the population to be treated 

decreases, but this correlation is 

unavoidable and does not require any 

special considerations in the cost 

recovery calculation. Although FDA 

believes the cost recovery provisions are 

sufficiently clear, FDA will evaluate 

how the rule is implemented and, if 

there is confusion concerning 

recoverable costs for expanded access 

purposes, FDA will consider developing 

guidance to assist implementation. 

(Comment 55) One comment stated 

that sponsors will continue to be 

reluctant to charge for a product made 

available for an expanded access use 

where the safety and efficacy is 

unproven, for which there is no 

reimbursement to help patients pay 

such costs, and where the allowable 

charges are limited to the ‘‘direct costs’’ 

of manufacturing and distributing the 

proposed product. 

(Response) FDA is not advocating that 

sponsors charge for investigational 

drugs in expanded access programs. The 

purpose of permitting cost recovery for 

expanded access use is to remove any 

financial disincentive to making a drug 

available for such use. FDA hopes that 

sponsors that have the resources to 

make investigational drugs available for 

expanded access use will continue to 

make such drugs available free of 

charge. 

(Comment 56) One comment stated 

that monitoring or reporting costs for 

expanded access appear to be excluded 

by the rule. 

(Response) The comment 

misinterpreted the proposed rule. 

Proposed § 312.8(d)(2) specifically 

provided that, for expanded access to an 

investigational drug for treatment use 

under proposed §§ 312.315 

(intermediate-size patient population) 

and 312.320 (treatment IND or treatment 

protocol), in addition to the direct costs 

described in proposed paragraph 

(d)(1)(i) of § 312.8, a sponsor may 

recover the costs of monitoring the 

expanded access IND or protocol, 

complying with IND reporting 

requirements, and other administrative 

costs directly associated with these two 

types of expanded access. 

3. Supporting Documentation 

Proposed § 312.8(d)(3) provided that a 

sponsor must provide supporting 

documentation to show that its cost 

recovery calculation is consistent with 

the recoverable costs requirements in 

paragraphs (d)(1) and, if applicable, 

(d)(2). 

(Comment 57) One comment asked 

FDA to clarify that if the sponsor 

challenges FDA’s calculation or 

authorization of recoverable costs, any 

affected person, including patients, may 

be a party to that review. 

(Response) If FDA determines that the 

amount sought to be charged must be 

lowered by a specified amount and the 

sponsor formally disputes that 

determination, third parties would not 

be allowed to be party to the dispute 

resolution without the sponsor’s 

consent because the discussion would 

invariably involve commercial 

confidential information. A sponsor’s 

formal dispute of an FDA denial of a 

charging request would present the 

same problem for third parties seeking 

to be a party to the dispute resolution. 

Therefore, FDA believes it cannot 

provide for third-party participation in 

formal disputes concerning charging 

determinations without the consent of 

the sponsor disputing the FDA 

determination. Moreover, FDA 

anticipates that most disputed issues 

with a charging request will be resolved 

informally in discussions between FDA 

and the sponsor seeking charging, so a 

formal dispute will be rare. 

(Comment 58) One comment stated 

that the rule should provide that 

documentation of recoverable costs 

follow accepted accounting practices. 

Another comment stated that it would 

be difficult for FDA to verify the costs 

requested, pointing out that the 

proposed rule stated that if requester’s 

supporting documentation relies on 

financial information or accounting 

methods beyond the expertise of FDA 

reviewers, FDA may request that a 

sponsor provide independent 

certification. 

(Response) FDA agrees that the 

documentation provided to support a 

calculation of recoverable costs for 

charging purposes should be prepared 

by a professional who is competent to 

make the required determinations. FDA 

also agrees that it may lack expertise to 

verify the costs requested. Accordingly, 

the proposed rule has been revised to 

state that the documentation must be 

accompanied by a statement that a 


srobinson on DSKHWCL6B1PROD with RULES2
40890 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

certified public accountant has 

reviewed and approved the calculations. 

(Comment 59) One comment noted 

that the proposed rule needs to address 

the tax implications for sponsors of 

investigational drug charges. 

(Response) It is not within FDA’s 

expertise to interpret the tax 

implications of these charging 

regulations. Sponsors and individuals 

who take advantage of the cost recovery 

option afforded by these regulations are 

responsible for determining the tax 

consequences of that cost recovery. 

4. Authority to Set Pricing 

(Comment 60) Two comments stated 

that FDA has no statutory authority to 

regulate the price for which medicine is 

sold, whether it is approved or 

unapproved, and such regulation is 

outside FDA’s statutory mission to 

ensure the safety and effectiveness of 

marketed drug products. 

(Response) The comment 

misunderstands FDA’s statutory basis 

and goals for regulating charging. FDA 

is not setting a price for a medication for 

commercial sale. This final rule intends 

only to permit recovery of certain costs 

associated with making an 

investigational drug available in a 

clinical trial or for an expanded access 

use, not to permit FDA to set the price 

for commercial sale of drugs. In the 

preamble to the proposed rule, FDA 

discussed its legal authority (71 FR 

75168 at 75173, citing 52 FR 19466 at 

19472 (May 22, 1987)). FDA concluded 

that permitting a sponsor to charge an 

amount greater than necessary to 

recover its costs (i.e., to permit a 

sponsor to profit) would be considered 

commercialization. For that reason, FDA 

stated that sponsors could only recover 

their costs associated with making an 

investigational drug available. This final 

rule merely refines what would be 

considered allowable costs to address 

some confusion and varied 

interpretations with the 1987 charging 

rule. 

(Comment 61) One comment asked for 

clarification about what would be an 

acceptable independent certification for 

cost recovery calculations. 

(Response) Independent certification 

from an outside accountant is likely to 

be adequate documentation concerning 

the recoverable costs that can be 

incorporated into the unit cost of the 

investigational drug. The final rule 

states that the documentation must be 

accompanied by a statement that an 

independent certified public accountant 

has reviewed and approved the 

calculations. 

5. Confidentiality 

(Comment 62) Three comments 

expressed concern about the 

confidentiality of the documentation 

used to support cost calculations. Two 

comments stated that financial 

information should be considered 

proprietary and should not be available 

to the public either before or after 

approval. 

(Response) FDA will maintain the 

confidentiality of documentation 

submitted to support charging requests 

in a manner consistent with the 

requirements of 21 CFR part 20. The 

sponsor is responsible for ensuring that 

the party providing the certification 

keeps confidential the information 

relied on in making that certification. 

6. Effect on Payment Systems (CMS and 

Insurance) 

(Comment 63) Several comments 

expressed concern about the 

relationship between the proposed rule 

and payment systems, specifically 

systems of CMS and health insurance 

companies. One comment suggested 

that there should be regulatory changes 

to require Medicare Part D and other 

third-party payers to pay for 

investigational drugs used in clinical 

trials for which FDA has permitted 

charging. The comment suggested that 

the proposed rule could also be revised 

to provide that FDA authorization to 

charge for an investigational drug in an 

expanded access program constitutes 

approval of the drug so that third-party 

payers such as insurance companies and 

Medicare Part D would reimburse 

patients. Two comments stated that if 

Medicare covers a drug used in a 

clinical trial under its coverage with 

evidence development policy (see CMS 

‘‘Coverage with Evidence 

Development,’’ http:// 

www.cms.hhs.gov/CoverageGenInfo/ 

03_CED.asp (FDA has verified the Web 

site address, but FDA is not responsible 

for any subsequent changes to the Web 

site after this document publishes in the 

Federal Register.)), FDA should permit 

charging for the drug. Another comment 

recommended that FDA advise CMS to 

develop a reimbursement model for 

drugs being used under expanded 

access programs because private health 

insurers will then follow suit and there 

will be more equitable access to 

investigational drugs. One comment 

suggested that FDA should require 

insurers to agree that investigational 

drugs will be listed on a reimbursable 

formulary for the indications tested in 

trials or used in expanded access 

programs. 

(Response) FDA authority to provide 

for an exception to the general 

prohibition on charging for 

investigational drugs, and its policies 

concerning charging, are distinct from 

CMS authority to identify the medical 

interventions for which it will 

reimburse. FDA has no authority to 

require that CMS reimburse for 

investigational drugs for which FDA has 

permitted charging. Similarly, FDA has 

no authority to dictate reimbursement 

policy to private health insurers. FDA 

notes that there is a trend toward 

providing reimbursement for medical 

care related to participation in a clinical 

trial, and reimbursing for investigational 

uses of products when there is a certain 

level of evidence to support the use. 

FDA believes these are encouraging 

developments and hopes that thirdparty payers will continue to develop 

policies to provide reimbursement for 

investigational therapies in appropriate 

circumstances. 

7. Collaboration With CMS and the 

National Cancer Institute 

(Comment 64) One comment stated 

that it would be useful if FDA, CMS, 

and the National Cancer Institute were 

to collaborate on the reimbursement 

implications of this new rule to ensure 

there are no obstacles to Medicare 

payment for these investigational drugs. 

(Response) FDA discussed the 

implications of the proposed charging 

regulation with CMS prior to publishing 

the proposed rule so CMS could assess 

the implications of the rule on its 

reimbursement programs. FDA has also 

discussed this final rule with CMS. 

Under current part B policy, CMS does 

not cover the costs of an investigational 

drug used in a clinical trial unless the 

drug is otherwise covered outside the 

clinical trial. However, certain routine 

costs associated with medical care 

obtained due to clinical trial 

participation may be covered (see 

Medicare Clinical Trial Policies, http:// 

www.cms.hhs.gov/ClinicalTrialPolicies/ 

(follow link to Current Policy, NCD for 

Routine Costs in Clinical Trials 

(310.1))). In Part D, the statute clearly 

defines the drugs that may be covered 

under the program (and their accepted 

indications). 

(Comment 65) One comment asserted 

that States will create mandated 

insurance coverage to mirror the 

proposed rule expansion. The comment 

stated that if health insurers are 

required to cover the cost of these drugs, 

they will need to increase premiums 

and that increasing premiums will cause 

more people to become uninsured. 

(Response) Currently, States generally 

do not mandate reimbursement for 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40891 

investigational medical interventions. 

That States may, at some point in the 

future, begin to institute policies 

mandating coverage of investigational 

drugs for which FDA has authorized 

charging is speculative, and thus not a 

basis for modifying current FDA 

policies. In addition, the likelihood that 

this final rule will further reduce access 

to health insurance because of increased 

costs associated with reimbursement for 

investigational therapies seems remote 

even if reimbursement were required, as 

investigational drugs provided under 

this regulation would constitute only a 

tiny fraction of overall drug use. 

G. Miscellaneous Comments 

1. Promotion 

(Comment 66) One comment pointed 

out that FDA regulations at § 312.7 

prohibit promotion of an investigational 

drug and asked that FDA clarify that 

this final rule permits an approved drug 

to be promoted outside of a clinical trial 

for its approved uses, even if the drug 

is used in a clinical trial. 

(Response) FDA agrees with the 

comment. Nothing in this final rule 

should be construed as a constraint on 

a manufacturer’s ability to promote an 

approved drug for its approved 

indications. 

2. Liability 

(Comment 67) One comment notes 

that there are potential liability 

concerns that need to be addressed that 

may result from subjects experiencing 

serious adverse events when charged for 

an investigational drug not approved by 

FDA. 

(Response) When the amount charged 

for the investigational drug is merely the 

sponsor’s cost, and subjects have given 

their informed consent to participate in 

a trial in which there is charging for 

study drug, FDA does not believe there 

would be a meaningful difference in a 

sponsor’s product liability exposure 

when it charges for the drug compared 

to when it does not. 

3. Product Labeling 

(Comment 68) One comment pointed 

out that § 312.6(a) requires that the 

immediate package of an investigational 

new drug bear a label advising that the 

drug is limited by law to investigational 

use. The comment expressed concern 

that the proposed rule could be 

interpreted as requiring approved drugs 

to bear that statement. 

(Response) FDA does not interpret 

this final rule as requiring use of the 

statement required by § 312.6(a) on the 

label of an approved drug product. The 

labeling approved for marketing of the 

product is acceptable. However, nothing 

in this final rule prevents a sponsor 

from designating a clinical supply of 

approved drug for use only in a clinical 

investigation and labeling the product 

in the manner provided by § 312.6(a). 

4. Analysis of Impact 

(Comment 69) One comment disputed 

FDA’s conclusion that Executive Order 

12866 does not apply because the 

proposed rule is not an economically 

significant regulatory action. The 

comment maintained that expanding the 

scope of treatment uses for which 

charging is permitted to include 

charging for drugs made available under 

intermediate-size patient populations 

and for individual patients could result 

in a significant financial impact. The 

comment also noted that one of the 

reasons for allowing charging in clinical 

trials is that the development of the 

investigational drug may be 

extraordinarily expensive. The comment 

stated that since FDA is predicting that 

requests for charging in clinical trials, 

and hence charging for extraordinarily 

expensive drugs will increase, there 

would likely be a significant financial 

impact. The comment asked that FDA 

perform an economic impact analysis or 

provide a better reason the Executive 

order does not apply. 

(Response) Based on our analysis 

(incorporating changes made to the 

proposed rule), we conclude that the 

final rule is not economically significant 

as defined under Executive Order 

12866. The comment does not provide 

any data or alternative analyses that 

would lead the agency to change this 

conclusion. Historical data indicate that 

only a very small percentage of all INDs 

submitted to FDA for clinical trials or 

treatment use include requests to charge 

for the drug. FDA expects only a slight 

increase in the already limited number 

of requests to charge as a result of the 

final rule. Our analysis of impacts 

predicts only a slight increase in 

charging for individual patient INDs, 

and a modest increase in charging for 

intermediate-size patient population 

INDs (see section VI.E.2 of this 

document) (upper bound of less than 

800 total patients affected). Because 

provisions for allowing charging in a 

clinical trial have been in the regulation 

since 1987, and this rule merely clarifies 

the criteria for allowing such charging, 

FDA does not anticipate a meaningful 

increase in charging requests in that 

setting. Thus, we do not believe that the 

final rule will have a significant 

economic or financial impact. 

(Comment 70) One comment disputed 

FDA’s assertion in the proposed rule 

that the ‘‘costs [associated with making 

investigational drugs available for 

treatment use] would not be excessive 

and would be justified by the primary 

benefit of this proposed rule, making 

investigational drugs available for 

treatment use that could not be 

otherwise made available without 

charging’’ (71 FR 75168 at 75175). The 

comment stated that there is little 

evidence for these claims, arguing that 

the costs are likely to be very high in 

some cases and relatively low in other 

cases. 

(Response) FDA agrees that there will 

be a range of costs for investigational 

drugs made available for treatment use 

and subject to charging, and that costs 

could be quite high in some cases. 

However, the differing costs of drugs 

across different expanded access 

programs does not undermine FDA’s 

conclusion that costs of this final rule 

are justified in light of the potential 

benefits associated with broader access 

to investigational drugs for treatment 

use. That conclusion is not intended to 

imply that costs and benefits are offset 

in each individual case in which there 

is charging for drugs made available for 

treatment use, so variation in cost across 

different expanded access programs 

does not undermine the overall 

conclusion. 

(Comment 71) One comment 

reviewed claims data on the treatment 

of diseases likely to fall under the FDA’s 

proposed rule changes. The comment 

assumed that physicians would request 

access to investigational drugs only 

when available therapies have failed or 

when conventional therapies do not 

exist. The comment also assumed that, 

depending on the circumstances, 

investigational drugs will be used as 

first-line therapy, second-line therapy, 

monotherapy and combined therapy 

with FDA-approved medications. Based 

on these assumptions, the comment 

estimated the additive cost of the 

proposed rule as it would apply to 

enrollees in commercial/private health 

plans to be $273,700,000. The comment 

expressed the belief that these estimates 

actually understate the burden to 

private sector payers, because they 

exclude potential annual costs to 

Medicare Advantage plans. 

(Response) Based on our analysis, we 

concluded that the costs of the final rule 

will be small. In response to the 

comment, we have included estimates 

of the number of individual patients 

charged for investigational drugs under 

current rules, and the number of 

additional patients we expect may be 

charged for investigational drugs under 

this final rule. FDA’s estimates indicate 

that, on average, as many as 12,566 

patients per year may be charged for 


srobinson on DSKHWCL6B1PROD with RULES2
40892 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

2 In light of section 903(d) of the act (21 U.S.C. 

393(d)), and the Secretary of Health and Human 

Service’s delegations to the Commissioner of Food 

and Drugs, statutory references to ‘‘the Secretary’’ 

in the discussion of legal authority have been 

changed to ‘‘FDA’’ or ‘‘the agency.’’ 

investigational drugs under current 

rules. In addition, we estimate that as 

many as 770 additional patients per year 

may be charged for investigational drugs 

under this final rule. These estimates 

are based on assumptions used in our 

analysis of impacts for the proposed 

rule that were not substantively 

challenged in any of the comments 

received. 

The estimate of 67,500 patients 

affected per year in the comment draws 

no distinction between patients who 

may be charged for investigational drugs 

under current rules and those additional 

patients who may be charged under this 

final rule. In assessing the impact of the 

final rule, it is the incremental effect, or 

additional patients that may be charged 

for investigational drugs, that must be 

considered. Patients who may be 

charged for investigational drugs under 

current rules are not relevant to an 

analysis of impacts for this final rule. 

The comment appears to assume that all 

patients who may be eligible to obtain 

an investigational drug under an 

expanded access IND would seek 

access, and that an appropriate drug 

would be available in all cases. In 

addition, the comment appears to 

assume that all patients with access to 

investigational drugs will also be 

charged for those drugs. Our analysis of 

historical data indicates that, on 

average, only about 1.1 percent of all 

IND submissions per year are associated 

with charging requests. 

The only direct costs that are relevant 

to this final rule are the costs to drug 

sponsors to prepare and submit charging 

requests to FDA. The comment did not 

provide an estimate of these costs. 

IV. Legal Authority 

FDA has the authority under the 

Federal Food, Drug, and Cosmetic Act 

(the act) to permit charging for an 

investigational new drug under the 

conditions set forth in this final rule. 

This final rule clarifies and slightly 

expands the charging scheme that is 

already in place. It is based on the 

agency’s2 authority to issue regulations 

pertaining to the investigational use of 

drugs, section 505(i) of the act (21 

U.S.C. 355(i)), its authority pertaining to 

expanded access to unapproved drugs 

for treatment use, section 561 of the act 

(21 U.S.C. 360bbb), and its general grant 

of rulemaking authority for the efficient 

enforcement of the act, section 701(a) of 

the act (21 U.S.C. 371(a)). 

Section 505(i) of the act directs the 

agency to issue regulations exempting 

from the operation of the new drug 

approval requirements drugs intended 

solely for investigational use by experts 

qualified by scientific training and 

expertise to investigate the safety and 

effectiveness of drugs. It is this authority 

that underlies FDA’s IND regulations in 

part 312. The final rule adds to and 

clarifies the previous IND regulations by 

revising the 1987 charging rule to 

explain the circumstances under which 

charging for an investigational drug is 

appropriate in a clinical trial and to 

clarify what costs can be recovered. 

Section 561 of the act, added by the 

Food and Drug Administration 

Modernization Act of 1997 (Public Law 

105–115), provides additional authority 

for this final rule. One of that section’s 

preconditions to providing an 

investigational drug for treatment use is 

that the sponsors submit a protocol 

consistent with regulations issued under 

section 505(i) of the act (see section 

561(b)(1), (b)(4), and (c) of the act). This 

rulemaking sets out the circumstances 

under which charging for an 

investigational drug is appropriate for 

treatment use in an expanded access 

program as well as in a clinical trial and 

clarifies what costs can be recovered. 

Section 701(a) of the act gives FDA 

the authority to issue regulations for the 

efficient enforcement of the act. Further 

discussion of FDA’s legal authority 

regarding charging can be found at 52 

FR 19466 at 19472 (May 22, 1987). 

V. Environmental Impact 

The agency has determined, under 21 

CFR 25.30(h), that this action is of a 

type that does not individually or 

cumulatively have a significant effect on 

the human environment. Therefore, 

neither an environmental assessment 

nor an environmental impact statement 

is required. 

VI. Analysis of Economic Impacts 

FDA has examined the impacts of the 

final rule under Executive Order 12866 

and the Regulatory Flexibility Act (5 

U.S.C. 601–612), and the Unfunded 

Mandates Reform Act of 1995 (Public 

Law 104–4). Executive Order 12866 

directs agencies to assess all costs and 

benefits of available regulatory 

alternatives and, when regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety, 

and other advantages; distributive 

impacts; and equity). The agency 

believes that this final rule is not an 

economically significant regulatory 

action under the Executive order. 

The Regulatory Flexibility Act 

requires agencies to analyze regulatory 

options that will minimize any 

significant impact of a rule on small 

entities. Our economic analysis for the 

proposed rule did not indicate any 

significant new regulatory burden, and 

we did not receive any comments that 

would cause us to reconsider this 

determination. Therefore, the agency 

certifies that the final rule will not have 

a significant economic impact on a 

substantial number of small entities. 

Section 202(a) of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies prepare a written 

statement, which includes an 

assessment of anticipated costs and 

benefits, before proposing ‘‘any rule that 

includes any Federal mandate that may 

result in an expenditure by State, local, 

and tribal governments, in the aggregate, 

or by the private sector, of $100,000,000 

or more (adjusted annually for inflation) 

in any one year.’’ The current threshold 

after adjustment for inflation is $133 

million, using the most current (2008) 

Implicit Price Deflator for the Gross 

Domestic Product. FDA does not expect 

this final rule to result in any 1-year 

expenditure that will meet or exceed 

this amount. 

Preparing additional charging 

requests accounts for the anticipated 

costs of this final rule. The agency 

estimates that, the cost for a sponsor to 

prepare and submit a charging request is 

approximately $2,500, and that these 

costs will be widely dispersed among 

affected entities. Because such requests 

are rare, the incremental number of 

requests generated by this final rule, as 

well as the total costs of the rule, will 

probably be quite small. Permitting 

charging for a broader range of treatment 

uses for investigational drugs will 

increase sponsors’ incentives to 

undertake such activities, thereby 

promoting development of new 

products, as well as the development of 

new uses for already approved products. 

Due to uncertainty with respect to the 

potential magnitude of such benefits, 

and a lack of necessary data, FDA did 

not generate quantitative estimates of 

expected benefits. 

A. Objectives of the Final Rule 

The objectives of the final rule are to 

clarify and expand on 1987 charging 

rule that permits sponsors to charge 

patients for investigational drugs. Under 

this 1987 charging rule, FDA could 

authorize charging for an investigational 

drug used in a clinical trial or under a 

treatment IND or protocol. The final rule 

describes more specifically the types of 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40893 

costs that can be recovered when 

charging for an investigational drug. The 

final rule also adds provisions that 

permit charging for investigational 

drugs for all of the various types of 

expanded access use described under 

final subpart I of part 312. 

B. The Need for the Final Rule 

The final rule is needed to establish 

charging provisions for additional types 

of expanded access use other than the 

treatment IND or protocol. Elsewhere in 

this issue of the Federal Register, FDA 

is amending part 312 of its regulations 

by adding subpart I concerning 

expanded access to investigational 

drugs. In addition to the treatment IND 

or protocol previously described in FDA 

regulations, the expanded access final 

rule specifically authorizes expanded 

access use for individual patients, 

including in emergencies, and expanded 

access use for intermediate-size patient 

populations. The expanded access final 

rule is intended to improve access to 

investigational drugs for patients with 

serious diseases who have exhausted 

other therapeutic options and may 

benefit from such therapies. This final 

rule is necessary to establish provisions 

that permit charging for investigational 

drugs for all of the categories of 

expanded access use described under 

final subpart I. 

The final rule is also needed to clarify 

and better explain the types of costs 

sponsors are permitted to recover 

through charging. The 1987 charging 

rule describing the costs a sponsor can 

recover when charging for an 

investigational drug has proven difficult 

to interpret and apply. Some sponsors 

have interpreted the language broadly to 

permit recovery of costs much greater 

than those directly attributable to 

providing the investigational drug for 

the approved treatment use. In addition, 

ambiguities in the 1987 charging rule 

may have caused inefficiencies leading 

some drug sponsors to devote more 

resources than necessary to the 

preparation and submission of charging 

requests. 

C. Why Allow Charging? 

The expense of conducting a clinical 

trial is considered a normal cost of drug 

development that should be recovered 

through sales after marketing approval. 

However, in some clinical trial settings, 

a sponsor may incur extraordinary costs 

compared to typical drug development 

expenses. Such a cost burden may arise 

because of unusually high 

manufacturing costs, the quantity of the 

drug required, the number of patients 

involved, the expected duration of 

treatment, or some combination of these 

factors. The agency believes that 

allowing cost recovery through charging 

may be appropriate in these instances, 

but only as a last resort source of 

funding to facilitate development of a 

promising new therapy that could not 

otherwise be developed. 

In some clinical trials, it may be 

necessary for a sponsor to obtain an 

approved drug from another entity. The 

approved drug may be used as an active 

control or in combination with the 

sponsor’s drug in a clinical trial 

designed to evaluate the effectiveness or 

safety of the sponsor’s investigational 

drug. In these situations, the trial 

subjects typically must receive some 

therapy for their disease because using 

a placebo control will be unethical. In 

addition, the subjects often will be 

treated with the approved drug in the 

course of medical practice if they were 

not participating in the clinical trial. 

FDA had proposed criteria for charging 

in these situations that presented a 

much lower threshold than for charging 

for the sponsor’s own investigational 

drug. Based on comments received, FDA 

has elected not to require sponsors who 

must obtain an approved drug from 

another entity for use as an active 

control, or in combination with the 

sponsor’s own drug, to obtain 

authorization to charge for the drug and 

otherwise fulfill the requirements in 

§ 312.8. Under this final rule, such 

sponsors can charge at their own 

discretion in this circumstance. 

In other situations, an approved drug 

must be obtained by a third party (not 

the holder of the approved application) 

to study the drug in a clinical trial for 

a new use or to obtain important safety 

information about an approved 

indication. Researchers conducting such 

clinical trials are primarily 

noncommercial entities who are not in 

the business of drug development. 

Typically, these sponsor-investigators 

conduct relatively small trials at a single 

site. Since such sponsors lack the 

resources of commercial sponsors and 

do not conduct the research for 

commercial purposes, they will not be 

able to recover the cost of obtaining the 

approved drug by marketing the drug, 

for example, for a new indication. The 

agency believes these kinds of trials 

should be encouraged because they may 

yield important data about less 

commercially viable uses of a drug or 

additional drug safety information. FDA 

had proposed criteria for charging in 

these situations that presented a much 

lower threshold than for charging for the 

sponsor’s own investigational drug. 

Based on comments received, FDA has 

elected not to require sponsors who 

must obtain an approved drug from 

another entity for a study of the 

approved drug (e.g., a study of a new 

use) to obtain authorization to charge for 

the drug and otherwise comply with the 

requirements of § 312.8. Under this final 

rule, such sponsors can charge at their 

own discretion in this circumstance. 

In contrast to clinical trials, granting 

expanded access to investigational 

drugs for treatment use primarily 

benefits individual patients and is not 

intended typically to generate data 

needed to support marketing approval. 

Thus, the costs to sponsors associated 

with making a drug available for 

expanded access are not considered 

typical drug development expenditures. 

For this reason, the agency believes that 

it is generally more appropriate to 

permit sponsors to charge for expanded 

access to investigational drugs for 

treatment use. Allowing charging in 

expanded access settings may also 

provide financial incentives for 

sponsors to make investigational drugs 

more widely available in these 

situations. 

D. Baseline for the Analysis 

During the period 1997 through 2005, 

FDA received an average of 2,046.6 

INDs per year. During this same period, 

the agency received an annual average 

of 22.6 requests to charge patients for 

investigational drugs. Thus, only about 

1.1 percent (0.011 = 22.6 / 2,046.6) of all 

INDs received by the agency on an 

annual basis were associated with 

charging requests. Similarly, FDA 

received an average of 4.6 treatment IND 

or protocol submissions and 1.1 

treatment IND or protocol charging 

requests per year during this period. 

Thus, requests to charge under 

treatment INDs or protocols were 

associated with about 0.05 percent 

(0.0005 = 1.1 / 2,046.6) of all INDs 

received by the agency, and 

approximately 23.9 percent (0.239 = 1.1 

/ 4.6) of all treatment IND or protocol 

submissions per year. 

FDA also received an average of 55 

other IND submissions and 15.6 other 

charging requests per year during this 

period. These requests were to charge 

patients for expanded access to 

investigational drugs in situations other 

than individual patient or emergency 

INDs, and treatment INDs or protocols. 

Such situations generally included 

requests to charge for expanded access 

in intermediate-size patient populations 

and under clinical trials. Because the 

intermediate-size patient population 

IND or protocol was not previously 

established in regulation, a more precise 

distribution of other charging requests 

cannot be determined. Nevertheless, 

other charging requests were associated 


srobinson on DSKHWCL6B1PROD with RULES2
40894 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

with about 0.76 percent (0.0076 = 15.6 

/ 2,046.6) of all INDs received by the 

agency, and approximately 28.4 percent 

(0.284 = 15.6 / 55) of all other IND 

submissions each year from 1997 

through 2005. 

Finally, FDA received an average of 

659 individual patient or emergency 

IND submissions and 5.9 charging 

requests for individual patient or 

emergency INDs per year. Thus, single 

patient or emergency IND charging 

requests are associated with about 0.29 

percent (0.0029 = 5.9 / 2046.6) of all 

INDs, and approximately 0.9 percent 

(0.009 = 5.9 / 659) of all single patient 

or emergency INDs received by the 

agency each year. This information is 

summarized in table 1 of this document. 

TABLE 1.—BASELINE DATA FOR AVERAGE ANNUAL NUMBER OF IND SUBMISSIONS AND CHARGING REQUESTS BY

CATEGORY

Category All Charging 

Requests 

Treatment IND/ 

Protocol Requests 

Other Charging 

Requests 

Individual Patient/ 

Emergency Requests 

Number of charging requests 22.6 1.1 15.6 5.9 

Percent of all INDs 1.1% 0.05% 0.76% 0.29% 

Average number of submissions 4.6 55 659 

Percent of submissions 23.9% 28.4% 0.9% 

One comment submitted in response 

to the proposed rule provided an 

estimate of the number of patients that 

might be affected by this final rule. As 

part of our response, we have generated 

estimates of the number of patients 

receiving investigational drugs and 

subject to charging requests under 

current rules, in place since 1987. 

Based on the information presented in 

table 1 of this document, FDA currently 

receives an average of 5.9 charging 

requests for individual patient or 

emergency INDs per year. Thus, 

approximately 5.9 individuals per year 

may currently be charged for 

investigational drugs under single 

patient or emergency INDs. FDA 

believes that it is reasonable to assume 

that a typical intermediate-size patient 

population will include between 10 and 

100 individuals. Given that FDA 

currently receives an average of 15.6 

charging requests for such submissions 

per year, we estimate that between 156 

and 1,560 individuals may currently be 

charged for investigational drugs under 

intermediate-size patient populations. A 

treatment IND or protocol can vary 

significantly in size and may include 

between 100 and 10,000 patients. Thus, 

an average of 1.1 treatment IND or 

protocol charging requests per year 

could affect between 110 and 11,000 

individuals. Based on this information, 

FDA estimates that between 272 and 

12,566 individuals may currently be 

charged for investigational drugs each 

year under rules in place since 1987. 

The wide range of these estimates 

reflects significant variation in the 

number of patients enrolled in 

intermediate-size patient populations, 

and treatment INDs or protocols. These 

estimates are summarized in table 2 of 

this document. 

TABLE 2.—APPROXIMATE NUMBER OF INDIVIDUALS AFFECTED ANNUALLY BY CHARGING RULES FOR INVESTIGATIONAL

DRUGS IN PLACE SINCE 1987 

Category Average Number 

of Requests 

Number of 

Patients 

Minimum Number 

of Individuals 

Maximum Number 

of Individuals 

Individual patient or emergency IND 5.9 1 5.9 5.9 

Small patient population/other 15.6 10—100 156 1,560 

Treatment IND or protocol 1.1 100—10,000 110 11,000 

Total 272 12,566 

E. Nature of the Impact 

The final rule will affect patients who 

lack effective therapeutic alternatives 

for serious diseases; sponsors that 

develop drugs to treat such diseases; 

and FDA in determining whether to 

authorize charging for investigational 

drugs. By clarifying requirements and 

establishing the full range of situations 

in which it may be appropriate to charge 

for an investigational drug, the final rule 

will improve patient access by 

providing a financial incentive for 

sponsors to make promising therapies 

more widely available. Thus, this final 

rule should help to facilitate patient 

access to drugs that could not be 

provided without charging and permit 

sponsors to study drugs that might 

otherwise be too costly to develop. 

By describing in regulation the full 

range of treatment use situations in 

which charging for an investigational 

drug may be permitted, this final rule 

will likely increase the volume of 

charging requests for treatment use 

somewhat. However, by clarifying the 

circumstances under which charging 

will be permitted and specifying the 

types of costs that sponsors can recover, 

this final rule should also make the 

process of obtaining authorization to 

charge more transparent and more 

efficient. Given the small percentage of 

all INDs that include charging requests, 

FDA believes that the impact of the final 

rule will be small. 

This final rule could also increase 

treatment expenses for some patients 

who obtain investigational drugs for 

which charging is permitted or for thirdparty payers if they choose to reimburse 

patients for some or all of the costs of 

such drugs. The agency believes that 

such costs will not be excessive and will 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40895 

be justified by the primary benefit of 

this final rule, making investigational 

drugs available for treatment use that 

could not otherwise be made available 

without charging. The potential impact 

of specific provisions of the final rule is 

discussed in greater detail in the 

following paragraphs. 

1. Charging in a Clinical Trial 

Since 1987, FDA regulations have 

permitted charging for investigational 

drugs in clinical trials intended to 

support marketing approval. This final 

rule is intended only to clarify the 

situations in which charging for a 

sponsor’s investigational drug in such a 

clinical trial is appropriate. Therefore, 

FDA does not expect this final rule to 

have a substantial effect on the number 

of requests to charge for sponsors’ 

investigational drugs in clinical trials to 

support initial marketing approval. 

Based on comments received, FDA 

has elected not to require sponsors who 

must obtain an approved drug from 

another entity for use as an active 

control or in combination with the 

sponsor’s drug to obtain authorization to 

charge for the drug. In addition, FDA 

has elected not to require sponsors who 

must obtain an approved drug from 

another entity for a study of the 

approved drug (e.g., a study of a new 

use) to obtain authorization to charge for 

the drug. Under this final rule, such 

sponsors can charge for investigational 

drugs under these circumstances at their 

own discretion. Therefore, our original 

conclusion in the proposed rule that 

there would not be a substantial impact 

on the number of charging requests in 

clinical trial situations is unchanged in 

the final rule. 

2. Charging for Expanded Access Uses 

Described Under Final Subpart I 

One comment submitted in response 

to the proposed rule provided an 

estimate of the number of patients that 

might be affected by this final rule. As 

part of our response, we have generated 

estimates of the number additional 

patients that may be charged for 

investigational drugs under this final 

rule. Information presented in tables in 

the analysis of impacts section of the 

expanded access final rule, published 

elsewhere in this issue of the Federal 

Register, will be used to generate these 

estimates. 

FDA estimates that the expanded 

access final rule will generate between 

132 and 395 additional single patient or 

emergency IND submissions per year. 

Information presented in table 1 of this 

document indicates that approximately 

0.9 percent of all single patient or 

emergency INDs are associated with 

charging requests. Thus, the agency 

estimates that this final rule will 

generate between 1.2 (1.2 = 132 x 0.009) 

and 3.5 (3.5 = 395 x 0.009) additional 

charging requests for single patient or 

emergency INDs. These figures imply 

that approximately 1.2 to 3.5 additional 

patients may be charged each year for 

investigational drugs as a result of this 

final rule. 

Similarly, the agency estimates that 

the expanded access final rule will 

generate between 3 and 27 additional 

intermediate-size patient population 

IND submissions per year. Information 

presented in table 1 of this document 

indicates that approximately 28.4 

percent of all such IND submissions are 

associated with charging requests. 

Therefore, the agency estimates that this 

final rule will generate between 0.85 

(0.85 = 3 x 0.284) and 7.67 (7.67 = 27 

x 0.284) additional charging requests for 

intermediate-size patient population 

submissions per year. The agency 

believes it is reasonable to assume that 

an intermediate-size patient population 

will generally include between 10 and 

100 individual patients. These figures 

imply that approximately 8.5 (8.5 = 0.85 

x 10) to 767 (767 = 7.67 x 100) 

additional patients may be charged for 

investigational drugs under 

intermediate-size patient populations 

each year as a result of this final rule. 

Because current regulations allowing 

charging for investigational drugs under 

a treatment IND or protocol are not 

significantly altered by this final rule, 

the agency does not anticipate that the 

final rule will lead to a change in the 

number of requests to charge. Therefore, 

FDA expects that between 10 (9.7 = 1.2 

+ 8.5) and 770 (770.5 = 3.5 + 767) 

additional patients may be charged for 

investigational drugs per year as a result 

of this final rule. The results of these 

calculations are summarized in table 3 

of this document. 

TABLE 3.—APPROXIMATE NUMBER OF ADDITIONAL INDIVIDUALS THAT MAY BE CHARGED FOR INVESTIGATIONAL DRUGS

UNDER THIS FINAL RULE

Category Number of Additional 

Submissions 

Number of Additional 

Charging Requests 

Number of Individuals 

per Request 

Total Number 

of Individuals 

Individual patient or emergency IND 132—395 1.2—3.5 1 1.2—3.5 

Small patient population/other 3—27 0.85—7.67 10—100 8.5—767 

Treatment IND or protocol 0 0 100—10,000 0 

Total 10—770 

3. Costs Recoverable When Charging for 

an Investigational Drug 

Finally, § 312.8(d) of the final rule 

clarifies and better explains the types of 

costs sponsors are permitted to recover 

through charging. In particular, 

sponsors are limited to recovery of the 

direct or marginal costs associated with 

making an investigational drug available 

for the approved treatment use. Direct 

costs that are recoverable under the final 

rule include per unit manufacturing 

costs and shipping and handling costs. 

In addition, the final rule permits 

sponsors to recover the costs of 

monitoring an expanded access 

protocol, complying with IND reporting 

requirements, and other administrative 

costs directly associated with expanded 

access for an intermediate-size patient 

population and for a treatment IND or 

treatment protocol. 

4. Summary 

The agency does not expect the 

number of requests to charge for a 

sponsor’s drug in a clinical trial, or to 

charge for an investigational drug under 

a treatment IND or treatment protocol, 

to be affected because the final rule does 

not significantly change the 1987 

charging rule. We estimate that final 

provisions allowing charging for single 

patient or emergency INDs and 

intermediate-size patient populations 

will affect between 10 and 770 

individuals. 

F. Benefits of the Final Rule 

Because FDA currently has no data 

that will allow us to predict the extent 


srobinson on DSKHWCL6B1PROD with RULES2
40896 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

3See http://swz.salary.com/salarywizard/ 

layoutscripts/swzl_newsearch.asp, last viewed 7/ 

10/08. (FDA has verified the Web site address, but 

FDA is not responsible for any subsequent changes 

to the Web site after this document publishes in the 

Federal Register.) 

to which the final amendments to 

existing regulations will generate direct 

benefits for consumers, it is not possible 

to accurately quantify the magnitude of 

any expected incremental benefits at 

this time. We expect the number of 

requests to charge for investigational 

drugs for expanded access use to 

increase somewhat. However, the 

number of additional patients who will 

gain access to investigational drugs as a 

result and the extent to which these 

patients will benefit from such access 

are highly uncertain. Establishing in 

regulation all of the situations in which 

charging is permissible and clearly 

specifying the types of costs that are 

eligible for recovery will ease the 

administrative burdens associated with 

obtaining authorization to charge and 

will improve patient access to 

investigational drugs for treatment use. 

Private benefits will accrue to 

individual patients receiving the drugs, 

whereas additional social benefits will 

accrue if others in society also value 

these individual patient benefits. 

Because the overall impact of the final 

rule is expected to be small, the 

potential for any new regulatory benefits 

is somewhat limited. 

In formulating the final rule, FDA 

considered the interests of patients, 

drug sponsors, and the general public. 

Concerning charging for investigational 

drugs in expanded access settings, the 

agency concluded that seriously ill 

patients could often benefit from 

increased access to investigational drugs 

that have not yet been approved for 

marketing. On the other hand, greater 

patient access to investigational drugs 

outside of the clinical trial setting could 

have the potential to delay approvals of 

drugs to treat serious diseases (e.g., by 

reducing incentives for potential 

subjects to enroll in clinical trials). If 

allowing charging were to adversely 

affect the drug approval process, the 

general population will experience 

diminished social benefits due to the 

reduced or delayed availability of new 

therapies approved for marketing by 

FDA. 

The final rule addresses this tension 

by allowing sponsors to charge for 

investigational drugs in expanded 

access settings as long as the sponsor 

provides reasonable assurance that 

charging will not interfere with 

development of the drug for marketing 

approval. In this way, the final rule will 

address the interests of those patient 

populations that will benefit from 

having greater access to investigational 

drugs and the broader interests of 

society in having safe and effective 

therapies approved for marketing and 

widely available. 

The final rule limits sponsors to 

recovery of the direct or marginal costs 

associated with making the drug 

available. Direct costs that are 

recoverable under the final rule include 

per unit manufacturing costs and 

shipping and handling costs. Indirect or 

fixed costs incurred for joint or common 

objectives and physical plant and 

equipment expenditures for producing 

marketable quantities of the drug are 

specifically excluded under the cost 

recovery provisions of the final rule. 

The agency believes that these cost 

recovery provisions will prevent 

sponsors from inappropriately shifting 

the normal financial risks associated 

with new drug development onto 

patients when they charge for drugs in 

clinical trial settings. For expanded 

access use, the limitation to direct cost 

recovery will also ensure that drug 

development costs that properly belong 

to sponsors are not shifted to patients. 

G. Costs of the Final Rule 

Although the final rule largely 

clarifies current agency practice, some 

additional paperwork costs will be 

incurred to the extent that the rule 

increases the total number of sponsor 

requests to charge patients for 

investigational drugs. The information 

requirements associated with the final 

rule are not expected to impose a 

significant burden. Drug sponsors who 

wish to charge for investigational drugs 

will need to review the rule to become 

familiar with its provisions and to 

gather the evidence and information 

necessary to support charging requests. 

Because of the lack of data described 

previously in this document, we are 

unable to generate quantitative 

estimates of compliance costs at this 

time. The agency expects that any 

incremental cost burdens will likely be 

small and widely dispersed among 

affected entities for a number of reasons. 

First, regulations covering charging 

for investigational drugs in clinical 

trials and under treatment INDs or 

treatment protocols have been in place 

since 1987. As a result, the primary 

incremental impact of the final rule will 

be limited to the new charging 

provisions for the new types of 

expanded access for treatment use 

described under final subpart I of part 

312. Second, the agency does not expect 

that these final charging provisions will 

lead to a large increase in the total 

number of charging requests. Because it 

is not usually extraordinarily expensive 

to make an investigational drug 

available to a single patient or a limited 

number of patients, the agency does not 

anticipate that the number of charging 

requests for expanded access to 

investigational drugs for single patients 

or intermediate-size patient populations 

will increase substantially. Finally, 

requests to charge are relatively 

infrequent and the expense necessary to 

prepare a charging request will 

ordinarily be small compared to the 

overall cost of preparing the expanded 

access submission. 

The agency estimates that, on average, 

48 hours will be needed to prepare a 

request to charge under the final rule. 

This estimate is based on FDA’s 

experience in reviewing charging 

requests under the 1987 charging rule 

and on a projection of the increased 

paperwork burden associated with the 

final rule. 

FDA’s experience implies that 80 

percent, or about 38 hours, of this 

burden will be associated with 

establishing that the amount proposed 

to be charged is limited to the direct 

costs of making the drug available. The 

agency believes that the cost 

justification portion of the charging 

request will need to be performed by a 

cost accountant qualified to assess the 

direct costs of charging. Information 

available on the Internet indicates that 

median total compensation for a Cost 

Accountant IV (senior level) is 

approximately $117,000 per year in 

2008 or about $56 per hour ($116,857 / 

2,080 hours).3 Thus the cost associated 

with certifying the amount to be charged 

is expected to be about $2,130 ($56 per 

hour x 38 hours) per charging request. 

The remaining burden (20 percent or 

about 10 hours) for the preparation of a 

charging request will consist of a brief 

demonstration that the criteria for 

charging that are not related to the 

amount to be charged have been met. 

When the request is to charge for a drug 

used in a clinical trial, this information 

will ordinarily be available as part of the 

normal drug development process. 

When the request is to charge for a drug 

for expanded access, the primary 

criterion is to show that charging will 

not interfere with development of the 

drug for marketing. FDA believes that 

preparation of this portion of the 

charging request will likely be 

performed by a mid-level regulatory 

affairs specialist. Information available 

on the Internet indicates that the total 

median compensation for a Regulatory 

Affairs Specialist II (intermediate level) 

is approximately $100,000 or about $48 

per hour in 2008 ($99,930/2,080 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40897 

4See http://swz.salary.com/salarywizard/ 

layoutscripts/swzl_newsearch.asp, last viewed 7/ 

10/08. (FDA has verified the Web site address, but 

FDA is not responsible for any subsequent changes 

to the Web site after this document publishes in the 

Federal Register.) 

hours).4 Thus, the cost to demonstrate 

that a charging request meets 

appropriate criteria is about $480 (10 

hours x $48 per hour) per charging 

request. 

Based on the figures presented 

previously in this document, FDA 

estimates the cost to prepare and submit 

a charging request will thus be about 

$2,610 ($2,130 + $480). The total costs 

associated with this final rule will 

probably be widely dispersed among 

affected entities because charging 

requests are rare, and thus, a particular 

sponsor will be expected to submit such 

a request very infrequently. 

A significant concern with the final 

rule relates to the potential effect on 

access to investigational therapies for 

economically disadvantaged individuals 

and the uninsured. Allowing sponsors 

to charge could impose a significant 

financial burden on many seriously ill 

individuals who lack therapeutic 

alternatives and could preclude access 

by some needy patients. However, in the 

past, many companies that have 

provided investigational drugs for 

treatment use have often included 

assistance programs to cover the costs 

for those who could not otherwise 

afford them. FDA expects this practice 

will continue. 

H. Minimizing the Impact on Small 

Entities 

The agency does not believe that the 

final rule will have a significant 

economic impact on a substantial 

number of small entities. Nevertheless, 

in the proposed rule, we recognized our 

uncertainty regarding the number and 

size distribution of affected entities, as 

well as the economic impact of the final 

rule on those entities, and requested 

detailed comment on these important 

issues. We received no comments that 

would cause us to change our 

determination that the final rule will not 

have a significant economic impact on 

a substantial number of small entities. 

According to agency records, the 

majority of treatment INDs and 

treatment protocols (approximately 92 

percent) are submitted by commercial 

sponsors and government agencies that 

are not likely to meet Small Business 

Administration (SBA) criteria defining a 

small entity in the relevant industry 

sector. Thus, the agency believes that 

the vast majority of requests to charge 

under expanded access submissions 

will not be submitted by small entities. 

Most single patient INDs are for 

treatment use and are submitted by 

individual physicians, and these entities 

will be classified as small entities. 

However, for reasons discussed 

previously, we do not anticipate that the 

volume of requests to charge for 

individual patient expanded access will 

increase substantially. Because 

expanded access for intermediate-size 

patient populations is not currently 

tracked by the agency, no data exist that 

will allow the agency to identify either 

the number of sponsors in this category 

or the number that will qualify as small 

entities. FDA believes that requests to 

charge for investigational drugs in 

clinical trials of a sponsor’s drug will 

generally be submitted by large 

commercial drug sponsors. In sum, the 

agency believes that some entities 

submitting charging requests will meet 

SBA small businesses criteria. As 

discussed in section VI.E of this 

document, the agency expects that any 

incremental burden associated with the 

final rule will be small and widely 

dispersed among affected entities. 

I. Alternatives 

FDA considered several alternatives 

to the final rule. Each is discussed in the 

following paragraphs: 

• Do not revise the 1987 charging 

rule. 

FDA considered and rejected this 

alternative because the 1987 charging 

rule does not address all of the types of 

expanded access to investigational 

drugs for treatment use specified under 

final subpart I of part 312. Furthermore, 

the cost recovery provisions in the 1987 

charging rule were vague and 

ambiguous and thus in need of 

clarification. 

• Retain the proposed requirements 

that would have required sponsors who 

must obtain an approved drug from 

another entity for use in the study 

evaluation to obtain authorization from 

FDA to charge. 

FDA considered this alternative. 

However, FDA believes the comments 

made a persuasive case for not requiring 

authorization to charge in these settings. 

The most common requests to charge 

are for approved drugs in trials when 

the drugs must be obtained from another 

company. For reasons discussed in 

section VI.C of this document, FDA 

believes that charging for investigational 

drugs in these situations is appropriate 

without prior authorization from FDA. 

• Do not permit charging for 

expanded access for individual patients 

or for intermediate-size patient 

populations. 

FDA considered not revising the 1987 

charging rule concerning charging for 

treatment use and thus permitting 

charging only for treatment INDs and 

treatment protocols. However, 

elsewhere in this issue of the Federal 

Register, the agency is finalizing its 

regulations concerning the treatment 

use of investigational drugs to 

specifically authorize expanded access 

for individual patients and for 

intermediate-size patient populations. 

The purpose of those regulations is to 

expand access to investigational drugs. 

In some situations, permitting sponsors 

to charge for investigational drugs to be 

used by individual patients or by 

intermediate-size patient populations 

may be the only way that such patients 

can receive access to these therapies 

because sponsors may not be willing to 

provide the drugs free of charge. Thus, 

consistent with the philosophy of the 

expanded access rule, the agency 

decided to permit charging for 

investigational drugs in all expanded 

access settings to improve access to 

investigational drugs for patients with 

serious diseases who lack other 

therapeutic options and who may 

benefit from such therapies. 

VII. Paperwork Reduction Act of 1995 

This final rule contains information 

collection requirements that are subject 

to review by the Office of Management 

and Budget (OMB) under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3520) (the PRA). The title, description, 

and respondent description of the 

information collection provisions are 

shown in the following paragraphs with 

an estimate of the annual reporting 

burden. Our estimate includes the time 

for reviewing instructions, searching 

existing data sources, gathering and 

maintaining the data needed, and 

completing and reviewing each 

collection of information. 

Title: Charging for Investigational 

Drugs Under an IND 

Description: The final rule describes 

the types of investigational uses for 

which a sponsor may be able to charge, 

including uses for which charging was 

not previously expressly permitted, and 

the criteria for allowing charging for the 

identified investigational uses. The rule 

authorizes sponsors to request to charge 

for investigational drugs used in clinical 

trials and for investigational drugs for 

expanded access for treatment use. The 

rule also describes the types of costs 

that can be recovered when charging for 

an investigational drug. 

Section 312.8(a)(1) provides that a 

sponsor who wishes to charge for an 

investigational drug must meet the 

criteria applicable to the specific 

sections of the proposal relating to 


srobinson on DSKHWCL6B1PROD with RULES2
40898 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

charging in a clinical trial or charging 

for expanded access. 

Section 312.8(b) describes the 

requirements for charging in a clinical 

trial. 

Section 312.8(b)(1) describes criteria 

for charging for the sponsor’s own drug 

in a clinical trial. To charge in this 

situation, the sponsor must show the 

following three things. The sponsor 

must: 

• Provide evidence that the drug has 

a potential clinical benefit that, if 

demonstrated in the clinical 

investigations, would provide a 

significant advantage over available 

products in the diagnosis, treatment, 

mitigation, or prevention of a disease or 

condition; 

• Demonstrate that the data to be 

obtained from the clinical trial would be 

essential to establishing that the drug is 

effective or safe for the purpose of 

obtaining initial approval of a drug, or 

would support a significant change in 

the labeling of an approved drug (e.g., 

new indication, inclusion of 

comparative safety information); and 

• Demonstrate that the clinical trial 

could not be conducted without 

charging because the cose of the drug is 

extraordinary to the sponsor. 

Section 312.8(c) describes criteria for 

charging for an investigational drug in 

an expanded access setting. The general 

criterion to charge for expanded access 

for treatment use is that the sponsor 

provide reasonable assurance that 

charging will not interfere with 

developing the drug for marketing 

approval. 

For treatment use under a treatment 

IND or treatment protocol, the sponsor 

must also provide the following: 

• Evidence of sufficient enrollment in 

any ongoing clinical trial(s) needed for 

marketing approval to reasonably assure 

FDA that the trial(s) will be successfully 

completed as planned, 

• Evidence of adequate progress in 

the development of the drug for 

marketing approval, and 

• Information submitted under its 

general investigational plan 

(§ 312.23(a)(3)(iv)) specifying the drug 

development milestones the sponsor 

plans to meet in the next year. 

Section 312.8(a)(2) provides that a 

sponsor who wishes to charge for an 

investigational drug must justify the 

amount to be charged. 

Section 312.8(d) describes more 

specifically the costs that are potentially 

recoverable. Section 312.8(d)(1) 

provides that a sponsor may recover 

only the direct costs of making the 

investigational drug available. Section 

312.8(d)(1)(i) defines direct costs as 

costs incurred by a sponsor that can be 

specifically and exclusively attributed 

to providing the drug for the 

investigational use for which FDA has 

authorized cost recovery. Direct costs 

include costs per unit to manufacture 

the drug (e.g., raw materials, labor, and 

nonreusable supplies and equipment 

used to manufacture the quantity of 

drug needed for the use for which 

charging is authorized) or costs to 

acquire the drug from another 

manufacturing source and direct costs to 

ship and handle (e.g., store) the drug. 

Section 312.8(d)(1)(ii) states that 

indirect costs include costs that are 

incurred primarily to produce the drug 

for commercial sale. Such costs include, 

for example, costs for facilities and 

equipment that are used to manufacture 

the supply of investigational drug but 

that are primarily intended to produce 

large quantities of drug for eventual 

commercial sale and research and 

development, administrative, labor, or 

other costs that would be incurred even 

if the clinical trial or expanded access 

for which charging is authorized did not 

occur. 

Section 312.8(d)(2) provides that 

when the sponsor is charging for making 

the drug available for expanded access 

for an intermediate-size patient 

population or for a treatment IND or 

protocol under subpart I, the sponsor 

may also recover the costs of monitoring 

the protocol, complying with IND 

reporting requirements, and other 

administrative costs directly associated 

with the expanded access in addition to 

the sponsor’s direct costs. 

Description of Respondents: Licensed 

physicians and manufacturers, 

including small business manufacturers. 

Estimates of Reporting Burden: Table 

4 of this document presents the 

estimated annualized reporting burden 

for the total number of charging requests 

we expect to receive under the final 

rule. The estimates in table 4 have been 

derived in the following manner. Based 

on baseline data presented in section VI 

of this document, ‘‘Analysis of 

Economic Impacts,’’ we estimate that we 

will receive a total of approximately 34 

charging requests annually under the 

final rule. This estimate is the sum of 

the average number of charging requests 

we currently receive annually (i.e., 

22.6), plus the additional charging 

requests, as described in the analysis of 

economic impacts, that we expect to 

receive annually as a result of the 

amendments in the final rule (i.e., 3.5 + 

7.67). Concerning the number of 

respondents, our experience has been 

that, in general, a single sponsor does 

not make multiple requests to charge for 

investigational drugs in the same year. 

However, we anticipate that multiple 

requests may increase somewhat if, as 

we expect, the number of individual 

patient treatment uses increases. Thus, 

we have assumed that the number of 

annual respondents will be 

approximately 30. 

The largest portion of the paperwork 

burden associated with the final rule is 

to justify the request to charge by 

showing that the amount proposed to be 

charged is limited to the direct costs of 

making the drug available 

(§ 312.8(d)(1)). When the sponsor 

requests to charge for making the drug 

available for expanded access by an 

intermediate-size patient population or 

through a treatment IND or treatment 

protocol, the sponsor may also recover 

the costs of monitoring the treatment 

use protocol, complying with IND 

reporting requirements, and other 

administrative costs directly associated 

with the expanded access 

(§ 312.8(d)(2)). The sponsor also needs 

to support its suggested charge for these 

expenses. The remaining portion of the 

paperwork burden associated with the 

final rule is to show that the criteria 

applicable to the specific type of 

charging request (i.e., the type of 

clinical trial (§ 312.8(b)) or type of 

expanded access (§ 312.8(c))) have been 

met. Thus, we estimate that the average 

number of hours needed to prepare a 

request to charge for an investigational 

drug under the final rule is 48. This 

estimate is based on our experience in 

reviewing charging requests in the past 

and, as explained previously, on a 

projection of the increased paperwork 

burden associated with the final rule. 

TABLE 4.—ESTIMATED ANNUAL REPORTING BURDEN1

21 CFR Section Number of 

Respondents 

Number of Responses 

per Respondent 

Total Annual 

Responses 

Hours per 

Response Total Hours 

312.8 30 1.13 34 48 1,632 

1There are no capital costs or operating and maintenance costs associated with this collection. 


srobinson on DSKHWCL6B1PROD with RULES2
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 40899 

The information collection provisions 

of this final rule have been submitted to 

OMB for review. Prior to the effective 

date of this final rule, FDA will publish 

a notice in the Federal Register 

announcing OMB’s decision to approve, 

modify, or disapprove the information 

collection provisions in this final rule. 

An agency may not conduct or sponsor, 

and a person is not required to respond 

to, a collection of information unless it 

displays a currently valid OMB control 

number. 

VIII. Federalism 

FDA has analyzed this final rule in 

accordance with the principles set forth 

in Executive Order 13132. FDA has 

determined that the rule does not 

contain policies that have substantial 

direct effects on the States, on the 

relationship between the National 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Accordingly, the 

agency has concluded that the rule does 

not contain policies that have 

federalism implications as defined in 

the Executive order and, consequently, 

a federalism summary impact statement 

is not required. 

List of Subjects in 21 CFR Part 312 

Drugs, Exports, Imports, 

Investigations, Labeling, Medical 

research, Reporting and recordkeeping 

requirements, Safety. 

■ Therefore, under the Federal Food, 

Drug, and Cosmetic Act and under 

authority delegated to the Commissioner 

of Food and Drugs, 21 CFR part 312 is 

amended as follows: 

PART 312—INVESTIGATIONAL NEW 

DRUG APPLICATION 

■ 1. The authority citation for 21 CFR 

part 312 continues to read as follows: 

Authority: 21 U.S.C. 321, 331, 351, 352, 

353, 355, 356, 371, 381, 382, 383, 393; 42 

U.S.C. 262. 

■ 2. Section 312.7 is amended by 

removing paragraph (d) and by revising 

the section heading to read as follows: 

§ 312.7 Promotion of investigational 

drugs. 

* * * * * 

■ 3. Section 312.8 is added to subpart A 

to read as follows: 

§ 312.8 Charging for investigational drugs 

under an IND. 

(a) General criteria for charging. (1) A 

sponsor must meet the applicable 

requirements in paragraph (b) of this 

section for charging in a clinical trial or 

paragraph (c) of this section for charging 

for expanded access to an 

investigational drug for treatment use 

under subpart I of this part, except that 

sponsors need not fulfill the 

requirements in this section to charge 

for an approved drug obtained from 

another entity not affiliated with the 

sponsor for use as part of the clinical 

trial evaluation (e.g., in a clinical trial of 

a new use of the approved drug, for use 

of the approved drug as an active 

control). 

(2) A sponsor must justify the amount 

to be charged in accordance with 

paragraph (d) of this section. 

(3) A sponsor must obtain prior 

written authorization from FDA to 

charge for an investigational drug. 

(4) FDA will withdraw authorization 

to charge if it determines that charging 

is interfering with the development of a 

drug for marketing approval or that the 

criteria for the authorization are no 

longer being met. 

(b) Charging in a clinical trial—(1) 

Charging for a sponsor’s drug. A 

sponsor who wishes to charge for its 

investigational drug, including 

investigational use of its approved drug, 

must: 

(i) Provide evidence that the drug has 

a potential clinical benefit that, if 

demonstrated in the clinical 

investigations, would provide a 

significant advantage over available 

products in the diagnosis, treatment, 

mitigation, or prevention of a disease or 

condition; 

(ii) Demonstrate that the data to be 

obtained from the clinical trial would be 

essential to establishing that the drug is 

effective or safe for the purpose of 

obtaining initial approval of a drug, or 

would support a significant change in 

the labeling of an approved drug (e.g., 

new indication, inclusion of 

comparative safety information); and 

(iii) Demonstrate that the clinical trial 

could not be conducted without 

charging because the cost of the drug is 

extraordinary to the sponsor. The cost 

may be extraordinary due to 

manufacturing complexity, scarcity of a 

natural resource, the large quantity of 

drug needed (e.g., due to the size or 

duration of the trial), or some 

combination of these or other 

extraordinary circumstances (e.g., 

resources available to a sponsor). 

(2) Duration of charging in a clinical 

trial. Unless FDA specifies a shorter 

period, charging may continue for the 

length of the clinical trial. 

(c) Charging for expanded access to 

investigational drug for treatment use. 

(1) A sponsor who wishes to charge for 

expanded access to an investigational 

drug for treatment use under subpart I 

of this part must provide reasonable 

assurance that charging will not 

interfere with developing the drug for 

marketing approval. 

(2) For expanded access under 

§ 312.320 (treatment IND or treatment 

protocol), such assurance must include: 

(i) Evidence of sufficient enrollment 

in any ongoing clinical trial(s) needed 

for marketing approval to reasonably 

assure FDA that the trial(s) will be 

successfully completed as planned; 

(ii) Evidence of adequate progress in 

the development of the drug for 

marketing approval; and 

(iii) Information submitted under the 

general investigational plan 

(§ 312.23(a)(3)(iv)) specifying the drug 

development milestones the sponsor 

plans to meet in the next year. 

(3) The authorization to charge is 

limited to the number of patients 

authorized to receive the drug under the 

treatment use, if there is a limitation. 

(4) Unless FDA specifies a shorter 

period, charging for expanded access to 

an investigational drug for treatment use 

under subpart I of this part may 

continue for 1 year from the time of 

FDA authorization. A sponsor may 

request that FDA reauthorize charging 

for additional periods. 

(d) Costs recoverable when charging 

for an investigational drug. (1) A 

sponsor may recover only the direct 

costs of making its investigational drug 

available. 

(i) Direct costs are costs incurred by 

a sponsor that can be specifically and 

exclusively attributed to providing the 

drug for the investigational use for 

which FDA has authorized cost 

recovery. Direct costs include costs per 

unit to manufacture the drug (e.g., raw 

materials, labor, and nonreusable 

supplies and equipment used to 

manufacture the quantity of drug 

needed for the use for which charging 

is authorized) or costs to acquire the 

drug from another manufacturing 

source, and direct costs to ship and 

handle (e.g., store) the drug. 

(ii) Indirect costs include costs 

incurred primarily to produce the drug 

for commercial sale (e.g., costs for 

facilities and equipment used to 

manufacture the supply of 

investigational drug, but that are 

primarily intended to produce large 

quantities of drug for eventual 

commercial sale) and research and 

development, administrative, labor, or 

other costs that would be incurred even 

if the clinical trial or treatment use for 

which charging is authorized did not 

occur. 

(2) For expanded access to an 

investigational drug for treatment use 

under §§ 312.315 (intermediate-size 

patient populations) and 312.320 

(treatment IND or treatment protocol), in 


srobinson on DSKHWCL6B1PROD with RULES2
40900 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Rules and Regulations 

addition to the direct costs described in 

paragraph (d)(1)(i) of this section, a 

sponsor may recover the costs of 

monitoring the expanded access IND or 

protocol, complying with IND reporting 

requirements, and other administrative 

costs directly associated with the 

expanded access IND. 

(3) To support its calculation for cost 

recovery, a sponsor must provide 

supporting documentation to show that 

the calculation is consistent with the 

requirements of paragraphs (d)(1) and, if 

applicable, (d)(2) of this section. The 

documentation must be accompanied by 

a statement that an independent 

certified public accountant has 

reviewed and approved the calculations. 

Dated: July 20, 2009. 

Jeffrey Shuren, 

Associate Commissioner for Policy and 

Planning. 

[FR Doc. E9–19004 Filed 8–12–09; 8:45 am] 

BILLING CODE 4160–01–S 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Parts 312 and 316 

[Docket No. FDA–2006–N–0238] (formerly 

Docket No. 2006N–0062) 

RIN 0910–AF14 

Expanded Access to Investigational 

Drugs for Treatment Use 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is amending its 

regulations on access to investigational 

new drugs for the treatment of patients. 

The final rule clarifies existing 

regulations and adds new types of 

expanded access for treatment use. 

Under the final rule, expanded access to 

investigational drugs for treatment use 

is available to individual patients, 

including in emergencies; intermediatesize patient populations; and larger 

populations under a treatment protocol 

or treatment investigational new drug 

application (IND). The final rule is 

intended to improve access to 

investigational drugs for patients with 

serious or immediately life-threatening 

diseases or conditions who lack other 

therapeutic options and who may 

benefit from such therapies. Elsewhere 

in this issue of the Federal Register, 

FDA is publishing the final rule on 

Charging for Investigational Drugs 

Under an Investigational New Drug 

Application which clarifies the 

circumstances in which charging for an 

investigational drug in a clinical trial is 

appropriate, sets forth criteria for 

charging for an investigational drug for 

the different types of expanded access 

for treatment use described in this final 

rule, and clarifies what costs can be 

recovered for an investigational drug. 

DATES: This rule is effective October 13, 

2009. 

FOR FURTHER INFORMATION CONTACT: 

Colleen L. Locicero, Center for Drug 

Evaluation and Research, Food and 

Drug Administration, 10903 New 

Hampshire Ave., Bldg. 22, rm. 4200, 

Silver Spring, MD 20993–0002, 

301–796–2270; or 

Stephen M. Ripley, Center for 

Biologics Evaluation and Research 

(HFM–17), Food and Drug 

Administration, 1401 Rockville 

Pike, Rockville, MD 20852, 301– 

827–6210. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. Overview of the Final Rule Including 

Changes to the Proposed Rule 

A. Overview 

B. Changes to the Proposed Rule 

III. Comments on the Proposed Rule 

A. General Comments on the Proposed 

Rule 

B. Comments Related to Proposed Rule as 

a Whole 

C. Comments on Specific Provisions of the 

Proposed Rule 

IV. Legal Authority 

V. Environmental Impact 

VI. Analysis of Economic Impacts 

A. Objectives of the Final Action 

B. Nature of the Problem Being Addressed 

C. Baseline for the Analysis 

D. Nature of the Impact 

E. Benefits of the Final Rule 

F. Costs of the Final Rule 

G. Minimizing the Impact on Small Entities 

H. Alternatives 

VII. Paperwork Reduction Act of 1995 

A. The Final Rule 

B. Estimates of Reporting Burden 

VIII. Federalism 

I. Background 

In the Federal Register of December 

14, 2006 (71 FR 75147), FDA proposed 

to amend its regulations permitting 

access to investigational drugs to treat 

patients with serious or immediately 

life-threatening diseases or conditions 

when there is no comparable or 

satisfactory alternative therapy to 

diagnose, monitor, or treat the patient’s 

disease or condition. 

As discussed in greater detail in the 

preamble to the proposed rule (71 FR 

75147 at 75148 to 75149), there have 

been several statutory and regulatory 

efforts to expand access to 

investigational drugs for treatment use. 

Before 1987, there was no formal 

recognition of treatment use in FDA’s 

regulations concerning INDs, but 

investigational drugs were made 

available for treatment use informally. 

In 1987, FDA revised the IND 

regulations in part 312 (21 CFR part 

312) to explicitly provide for one 

specific kind of treatment use of 

investigational drugs (52 FR 19466, May 

22, 1987). Section 312.34 authorized 

access to investigational drugs for a 

broad population under a treatment 

protocol or treatment IND when certain 

criteria were met. Section 312.35 

described the submission requirements 

for such treatment use. The 1987 IND 

regulations also implicitly 

acknowledged the existence of other 

kinds of treatment use, notably use in 

individual patients, by adding a 

provision for obtaining an 

investigational drug for treatment use in 

an emergency situation (§ 312.36). 

However, § 312.36 did not describe 

criteria or requirements that must be 

met to authorize individual patient 

treatment use. 

In response to criticisms that this lack 

of criteria and submission requirements 

resulted in inconsistent policies, 

inequitable access, and preferential 

access for certain categories of patients, 

Congress included in the Food and Drug 

Administration Modernization Act of 

1997 (FDAMA) (Public Law 105–115), 

which amended the Federal Food, Drug, 

and Cosmetic Act (the act), specific 

provisions concerning expanded access 

to investigational drugs for treatment 

use (Expanded Access to Unapproved 

Therapies and Diagnostics, section 561 

of the act (21 U.S.C. 360bbb)). 

FDA proposed this rule in December 

2006 to further address the concerns 

that motivated the FDAMA changes, 

including problems of inconsistent 

application of access policies and 

programs and inequities in access based 

on the relative sophistication of the 

setting in which a patient is treated or 

on the patient’s disease or condition. By 

describing in detail in the final rule the 

criteria, submission requirements, and 

safeguards for the different types of 

expanded access for treatment use of 

investigational drugs, FDA hopes to 

increase awareness and knowledge of 

expanded access programs and the 

procedures for obtaining investigational 

drugs for treatment use. The agency 

believes that the final rule appropriately 

authorizes access to promising drugs for 

treatment use, while protecting patient 

safety and avoiding interference with 

the development of investigational 


srobinson on DSKHWCL6B1PROD with RULES2