75168 Federal Register / Vol. 71, No. 240 / Thursday, December 14, 2006 / Proposed Rules 

adequate to satisfy FDA that the criteria 

in § 312.305(a) and paragraph (b) of this 

section have been met. The expanded 

access submission must meet the 

requirements of § 312.305(b). In 

addition: 

(1) The expanded access submission 

must state whether the drug is being 

developed or is not being developed and 

describe the patient population to be 

treated. 

(2) If the drug is not being actively 

developed, the sponsor must explain 

why the drug cannot currently be 

developed for the expanded access use 

and under what circumstances the drug 

could be developed. 

(3) If the drug is being studied in a 

clinical trial, the sponsor must explain 

why the patients to be treated cannot be 

enrolled in the clinical trial and under 

what circumstances the sponsor would 

conduct a clinical trial in these patients. 

(d) Safeguards. (1) Upon review of the 

IND annual report, FDA will determine 

whether it is appropriate for the 

expanded access to continue under this 

section. 

(i) If the drug is not being actively 

developed or if the expanded access use 

is not being developed (but another use 

is being developed), FDA will consider 

whether it is possible to conduct a 

clinical study of the expanded access 

use. 

(ii) If the drug is being actively 

developed, FDA will consider whether 

providing the investigational drug for 

expanded access use is interfering with 

the clinical development of the drug. 

(iii) As the number of patients 

enrolled increases, FDA may ask the 

sponsor to submit an IND or protocol for 

the use under § 312.320. 

(2) The sponsor is responsible for 

monitoring the expanded access 

protocol to ensure that licensed 

physicians comply with the protocol 

and the regulations applicable to 

investigators. 

§ 312.320 Treatment IND or treatment 

protocol. 

Under this section, FDA may permit 

an investigational drug to be used for 

widespread treatment use. 

(a) Criteria. The criteria in 

§ 312.305(a) must be met, and FDA must 

determine that: 

(1) Trial status. (i) The drug is being 

investigated in a controlled clinical trial 

under an IND designed to support a 

marketing application for the expanded 

access use, or 

(ii) All clinical trials of the drug have 

been completed; and 

(2) Marketing status. The sponsor is 

actively pursuing marketing approval of 

the drug for the expanded access use 

with due diligence; and 

(3) Evidence. (i) When the expanded 

access use is for a serious disease or 

condition, there is sufficient clinical 

evidence of safety and effectiveness to 

support the expanded access use. Such 

evidence would ordinarily consist of 

data from phase 3 trials, but could 

consist of compelling data from 

completed phase 2 trials; or 

(ii) When the expanded access use is 

for an immediately life-threatening 

disease or condition, the available 

scientific evidence, taken as a whole, 

provides a reasonable basis to conclude 

that the investigational drug may be 

effective for the expanded access use 

and would not expose patients to an 

unreasonable and significant risk of 

illness or injury. This evidence would 

ordinarily consist of clinical data from 

phase 3 or phase 2 trials, but could be 

based on more preliminary clinical 

evidence. 

(b) Submission. The expanded access 

submission must include information 

adequate to satisfy FDA that the criteria 

in § 312.305(a) and paragraph (a) of this 

section have been met. The expanded 

access submission must meet the 

requirements of § 312.305(b). 

(c) Safeguard. The sponsor is 

responsible for monitoring the treatment 

protocol to ensure that licensed 

physicians comply with the protocol 

and the regulations applicable to 

investigators. 

Dated: December 6, 2006. 

Jeffrey Shuren, 

Assistant Commissioner for Policy. 

[FR Doc. 06–9684 Filed 12–11–06; 10:01 am] 

BILLING CODE 4160–01–S 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 312 

[Docket No. 2006N–0061] 

RIN 0910–AF13 

Charging for Investigational Drugs 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Proposed rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is proposing to 

amend its investigational new drug 

application (IND) regulation concerning 

charging patients for investigational 

new drugs. FDA is proposing to revise 

the current 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 proposed 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. 

The proposed rule is intended to permit 

charging for a broader range of 

investigational and expanded access 

uses than is explicitly permitted in 

current regulations. 

DATES: Submit written or electronic 

comments by March 14, 2007. Submit 

written comments on the information 

collection requirements by January 16, 

2007. 

ADDRESSES: You may submit comments, 

identified by Docket No. 2006N–0061 

and/or RIN number 0910–AF13, by any 

of the following methods: 

Electronic Submissions 

Submit electronic comments in the 

following ways: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Agency Web site: http:// 

www.fda.gov/dockets/ecomments. 

Follow the instructions for submitting 

comments on the agency Web site. 

Written Submissions 

Submit written submissions in the 

following ways: 

• FAX: 301–827–6870. 

• Mail/Hand delivery/Courier [For 

paper, disk, or CD–ROM submissions]: 

Division of Dockets Management (HFA–

305), Food and Drug Administration, 

5630 Fishers Lane, rm. 1061, Rockville, 

MD 20852. 

To ensure more timely processing of 

comments, FDA is no longer accepting 

comments submitted to the agency by email. FDA encourages you to continue 

to submit electronic comments by using 

the Federal eRulemaking Portal or the 

agency Web site, as described in the 

Electronic Submissions portion of this 

paragraph. 

Instructions: All submissions received 

must include the agency name and 

Docket No(s). and Regulatory 

Information Number (RIN) (if a RIN 

number has been assigned) for this 

rulemaking. All comments received may 

be posted without change to http:// 

www.fda.gov/ohrms/dockets/ 

default.htm, including any personal 

information provided. For additional 

information on submitting comments, 

see the ‘‘Comments’’ heading of the 

SUPPLEMENTARY INFORMATION section of 

this document. 

Docket: For access to the docket to 

read background documents or 


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comments received, go to http:// 

www.fda.gov/ohrms/dockets/ 

default.htm and insert the docket 

number(s), found in brackets in the 

heading of this document, into the 

‘‘Search’’ box and follow the prompts 

and/or go to the Division of Dockets 

Management, 5630 Fishers Lane, rm. 

1061, Rockville, MD 20852. 

The Office of Management and Budget 

(OMB) is still experiencing significant 

delays in the regular mail, including 

first class and express mail, and 

messenger deliveries are not being 

accepted. To ensure that comments on 

the information collection are received, 

OMB recommends that written 

comments be faxed to the Office of 

Information and Regulatory Affairs, 

OMB, Attn: Desk Officer for FDA, FAX: 

202–395–6974. 

FOR FURTHER INFORMATION CONTACT: 

For the Center for Drug Evaluation 

and Research: Colleen L. Locicero, 

Center for Drug Evaluation and 

Research (HFD–101), 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: Steve 

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. The Current Regulation 

II. Why the Current Charging Rule Needs to 

be Revised 

A. Overview 

B. Criteria for Charging in a Clinical Trial 

C. Charging for Expanded Access for 

Treatment Use 

D. Recoverable Costs 

III. Description of the Proposed Rule 

A. General Requirements 

B. Clinical Trials 

C. Expanded Access for Treatment Use 

D. Recoverable Costs 

IV. Legal Authority 

V. Environmental Impact 

VI. Analysis of Economic Impacts 

A. Objectives of the Proposed Action 

B. The Need for the Proposed Rule 

C. Why Allow Charging? 

D. Baseline for the Analysis 

E. Nature of the Impact 

F. Benefits of the Proposed Rule 

G. Costs of the Proposed Rule 

H. Minimizing the Impact on Small 

Entities 

VII. Paperwork Reduction Act of 1995 

VIII. Federalism 

IX. Request for Comments 

I. The Current Regulation 

FDA’s current regulation on charging 

for an investigational drug is § 312.7(d) 

(21 CFR 312.7(d)). Section 312.7(d) was 

first proposed in the Federal Register of 

June 9, 1983 (48 FR 26720), and 

reproposed March 19, 1987 (52 FR 8850) 

(the 1987 proposal). The final rule 

published in the Federal Register of 

May 22, 1987 (52 FR 19466) (the 1987 

final rule). Under § 312.7(d), FDA may 

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. 

Section 312.7(d)(1) provides that a 

sponsor who wishes to charge for an 

investigational drug in a clinical trial 

must provide a full written explanation 

of why charging is 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. 

Section 312.7(d)(2) sets out the 

following four conditions that must be 

met to charge for an investigational drug 

used under a treatment protocol or 

treatment IND: 

• There must be adequate enrollment 

in the ongoing clinical investigations 

under the authorized IND; 

• Charging must not constitute 

commercial marketing of a new drug for 

which a marketing application has not 

been approved; 

• The drug must not be commercially 

promoted or advertised; and 

• The sponsor of the drug must be 

actively pursuing marketing approval 

with due diligence. 

Section 312.7(d)(2) also provides that 

to charge for an investigational drug 

used in a treatment IND or treatment 

protocol, the sponsor must submit an 

information amendment under § 312.31 

(21 CFR 312.31) of the IND regulations. 

Authorization for charging goes into 

effect automatically 30 days after FDA 

receives the information amendment, 

unless the agency notifies the sponsor to 

the contrary. 

Section 312.7(d)(3) provides that a 

sponsor may 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. 

Section 312.7(d)(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. 

II. Why the Current Charging Rule 

Needs to be Revised 

A. Overview 

There are three principal reasons for 

revising the current charging regulation. 

First, the provisions of the current 

charging regulation concerning charging 

for investigational drugs in a clinical 

trial need to be revised to take into 

account circumstances that were not 

anticipated when the 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 has received 

few such requests. Far more common 

are requests to charge for approved 

drugs in trials when the drugs must be 

obtained from another company. The 

approved drug may be used in a trial of 

the sponsor’s drug as an active control 

or in combination with the sponsor’s 

drug. Even more common are requests 

to charge for approved drugs used in 

studies by a third party (not a 

manufacturer) that are intended to study 

new uses of the approved drug or to 

compare two drugs. FDA believes that 

requests to charge for investigational 

drugs in these 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 drug being 

tested in a clinical trial. Accordingly, 

the agency believes the current charging 

regulation needs to be revised to 

provide criteria for charging for 

approved drugs used in clinical trials. 

Second, the provisions of the current 

charging regulation related to treatment 

use provide for charging patients for 

investigational drugs only when those 

drugs are provided under a treatment 

IND or treatment protocol. Elsewhere in 

this issue of the Federal Register, FDA 

is proposing to add to part 312 (21 CFR 

part 312) new subpart I concerning 

‘‘Expanded Access to Investigational 

Drugs for Treatment Use.’’ That 

proposed rule would retain the 

treatment IND and treatment protocol 

provisions in the current regulation 

with minor modifications, and provide 

for two additional categories of 

expanded access for treatment use—

expanded access for individual patients 

and expanded access for intermediate 

size patient populations. The current 

charging rule needs to be revised to 

provide authority to charge for 

investigational drugs for these two new 

categories of expanded access for 

treatment use. 

Third, FDA believes the current 

charging regulation needs to be revised 

to specify the types of costs that can be 


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recovered. The language of the current 

charging rule is not very specific and 

does not provide sufficient guidance to 

sponsors on the costs that can be 

recovered. Moreover, because of the 

different justifications for charging in a 

clinical trial and charging for treatment 

use, the agency believes that the costs 

appropriate for recovery also differ. 

The reasons why FDA believes the 

current charging regulation needs to be 

revised are described more fully in 

sections II.B, C, and D of this document. 

B. Criteria for Charging in a Clinical 

Trial 

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. If the investigational drug 

proves successful in clinical trials, the 

sponsor will recoup its development 

costs by marketing the drug for its 

approved indication. Because research 

subjects who participate in a clinical 

trial are permitting themselves to be 

exposed to a drug that has not been 

proven to be effective and that may also 

pose safety risks, subjects generally 

should not be expected to pay for the 

drug. In fact, in return for their 

willingness to be exposed to an 

unapproved drug, subjects in clinical 

trials are usually compensated, rather 

than charged for the drug. 

The current regulation on charging 

requires a sponsor who wishes to charge 

for an investigational drug in a clinical 

trial to provide a full written 

explanation of why charging is 

necessary for the sponsor to undertake 

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

distributing the study drug to test 

subjects should not be considered part 

of the normal cost of doing business). 

However, the regulation does not 

specify the criteria that FDA would use 

to evaluate the sponsor’s explanation for 

why charging is necessary to undertake 

the trial or why the cost of a drug 

should not be considered part of the 

normal cost of doing business. 

The preambles to the reproposed and 

final rules, however, were more specific 

about the circumstances in which FDA 

believed charging for an investigational 

drug in a clinical trial might be 

appropriate. In the preamble to the 1987 

reproposal, the agency stated that 

‘‘extremely high costs could warrant the 

sale of drugs used in clinical trials’’ (52 

FR 8850 at 8854). The agency indicated 

that allowing charging for very 

expensive drugs could be particularly 

advantageous by ‘‘permitting small and 

fledgling companies to test products 

that are extremely expensive to produce 

* * *’’ (52 FR 8850 at 8854). In the 

preamble to the 1987 final rule, the 

agency also stated 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 

19474). 

Thus, the philosophy behind the 

current charging regulation was that 

authorizing charging in a clinical trial 

required an exceptional circumstance, 

including evidence that the drug might 

provide an advantage over available 

therapy and that the study for which 

charging is requested is necessary to 

further the development of the drug and 

could not be conducted without 

charging. FDA is now proposing to 

describe in regulation specific criteria 

for charging that are consistent with the 

policies articulated in the preambles to 

the reproposed and final rules. These 

criteria are described in greater detail in 

section III.B of this document. 

As discussed in section II.A of this 

document, FDA now believes that 

charging for an investigational drug in a 

clinical trial may also be appropriate 

when the clinical trial includes 

approved drugs that must be obtained 

from another company. The approved 

drug may be used in a trial of the 

sponsor’s drug as an active control or in 

combination with the sponsor’s drug. In 

another situation, an approved drug 

may need to be obtained from the 

marketer of that drug for use in studies 

by a third party (not the manufacturer) 

that are intended to study a new use for 

the approved drug or to compare two 

drugs. Thus, FDA is now proposing to 

revise the charging rule to include 

criteria that apply to these two 

situations when an approved drug is 

used in a clinical trial. These criteria are 

described in section III.B of this 

document. 

C. Charging for Expanded Access for 

Treatment Use 

Charging for the cost of an 

investigational drug for expanded access 

for treatment use is a very different 

situation from charging for a drug in a 

clinical trial. Treatment use is not a 

necessary part of the drug development 

process and does not benefit the 

pharmaceutical companies by leading to 

systematic accumulation of data 

intended to support marketing 

authorization. Rather, treatment use is 

primarily intended to benefit very sick 

patients by permitting them to receive 

investigational drugs to treat their 

diseases and conditions, with collection 

of information about the drug being 

incident to the intent to treat. FDA 

wants to encourage sponsors to make 

investigational drugs available to 

seriously ill patients who lack 

satisfactory alternative treatment and 

might benefit from these drugs. 

However, making investigational drugs 

available for expanded access for 

treatment use is potentially costly, 

especially when many patients are 

involved. Therefore, the agency believes 

that sponsors should be permitted to 

charge patients for investigational drugs 

for expanded access for treatment use, 

provided that charging will not impede 

the progress of drug development. 

The current charging regulation in 

§ 312.7(d)(2) contains FDA’s criteria for 

allowing a sponsor to charge for 

investigational drugs for treatment use 

under a treatment IND or treatment 

protocol in accordance with §§ 312.34 

and 312.35. Elsewhere in this issue of 

the Federal Register, FDA is proposing 

to add to part 312 new subpart I 

(Expanded Access to Investigational 

Drugs for Treatment Use), which would 

retain the treatment IND and protocol 

provisions in the current regulation 

with minor modifications, and provide 

for two additional categories of 

expanded access for treatment use that 

have not previously been described in 

regulation, (1) expanded access for 

individual patients and (2) expanded 

access for intermediate size patient 

populations. FDA is proposing to revise 

the current charging regulation to 

incorporate criteria to permit charging 

for these newly described categories of 

expanded access for treatment use. The 

criteria that must be met to charge for 

these uses are described in more detail 

in section III.C of this document. 

D. Recoverable Costs 

FDA is also proposing to revise the 

regulation on charging to clearly 

describe the costs a sponsor can include 

in its cost recovery calculation for an 

investigational drug. Under the current 

charging regulation, a sponsor may not 

charge a price ‘‘larger than that 

necessary to recover costs of 

manufacture, research, development, 

and handling of the investigational 

drug’’ (§ 312.7(d)(3)). In FDA’s 

experience, this provision has been 

prone to varied interpretations, 

sometimes resulting in unrealistic cost 

calculations. For example, some 

sponsors have interpreted the provision 

as allowing cost recovery for all possible 

costs associated with the research, 

development, manufacture, and 

handling of the drug from the inception 

of drug development. Some sponsors 

have also interpreted § 312.7(d)(3) as 

permitting cost recovery for the entire 


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cost of facilities designed to produce the 

drug in quantities that would be 

adequate for the ultimate marketing of 

the drug. These interpretations typically 

result in a cost that cannot reasonably 

be recovered from the number of 

patients who will be receiving the 

investigational drug. 

FDA believes the current cost 

recovery provision was intended to 

permit a sponsor to recover the costs 

associated with providing an expensive 

drug product to study subjects in a 

clinical trial or making a drug product 

available for treatment use. FDA does 

not believe the intent was to allow a 

sponsor to recover the costs of research 

and development of a drug before it is 

marketed. The proposed rule is 

intended to clearly describe what costs 

may be recovered by a sponsor by 

providing criteria that are less 

susceptible to varied interpretations. 

These criteria are described in section 

III.D of this document. 

III. Description of the Proposed Rule 

The proposed rule would remove 

paragraph (d) of current § 312.7 that 

discusses charging for and 

commercialization of investigational 

drugs. The proposed rule would create 

new § 312.8 describing general 

requirements for charging for 

investigational drugs, specific 

requirements pertaining to charging for 

investigational drugs in a clinical trial, 

charging for investigational drugs for 

treatment use under proposed subpart I 

(described elsewhere in this issue of the 

Federal Register), and requirements for 

determining what costs can be 

recovered when charging for an 

investigational drug. 

A. General Requirements 

Proposed § 312.8(a) describes the 

following general requirements and 

conditions for charging for 

investigational new drugs. 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 treatment use) 

(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)). 

The requirement in the proposed rule 

to obtain prior written authorization 

from FDA to charge for any 

investigational drug would be a change 

from the provisions of the current 

charging regulation. At the present time, 

sponsors must obtain prior written 

approval from FDA to charge for an 

investigational drug in a clinical trial 

(§ 312.7(d)(1)). On the other hand, 

authorization to charge for an 

investigational drug in a treatment 

protocol or treatment IND goes into 

effect automatically 30 days after receipt 

by FDA of an information amendment 

concerning charging, unless FDA 

notifies the sponsor to the contrary 

(§ 312.7(d)(2)). The proposal to require 

sponsors to obtain prior written 

authorization to charge for all types of 

expanded access is consistent with the 

agency’s current practice of reviewing 

requests to charge for investigational 

drugs in treatment protocols or 

treatment INDs. The agency wants to 

review requests to charge for any type 

of expanded access to ensure that the 

criteria for charging have been met and 

that the amount to be charged does not 

exceed the costs permissible under the 

proposed rule. 

Proposed § 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. 

B. Clinical Trials 

Proposed § 312.8(b) describes specific 

requirements pertaining to charging for 

an investigational drug in a clinical 

trial. This provision addresses three 

situations in which FDA may authorize 

charging for an investigational drug in a 

clinical trial, including investigational 

use of an approved drug. 

Proposed § 312.8(b)(1) describes 

criteria for charging for the sponsor’s 

own drug in a clinical trial. 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. 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. Accordingly, 

the proposed rule provides that a 

sponsor wishing to charge for its 

investigational drug in a clinical trial 

must 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 (proposed 

§ 312.8(b)(1)(i)). 

Second, charging should be permitted 

only for a trial that is necessary for the 

development of the drug. Therefore, the 

sponsor must 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 marketing 

approval of the drug, or that it would 

support a significant change in the 

labeling of the sponsor’s approved drug 

(proposed § 312.8(b)(1)(ii)). For 

example, the trial could be designed to 

provide data that would support 

approval of a new indication or generate 

important comparative safety 

information. The type of products that 

are likely to meet these two criteria 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,’’ including the 

priority review policies for the Centers 

for Drug Evaluation and Research and 

Biologics Evaluation and Research in 

appendix 3 (available on the Internet at 

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

index.htm)). 

Third, charging must be necessary to 

the conduct of the clinical trial. Under 

proposed § 312.8(b)(1)(iii), a sponsor 

would be 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 

extraordinary circumstances. 

Proposed § 312.8(b)(2) describes 

criteria for 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 effectiveness or safety of 

the sponsor’s investigational drug. In 

these situations, the study subjects 

typically must receive some therapy for 

their disease or condition because using 

a placebo control would be unethical. In 

addition, the subjects often would be 

treated with the approved drug in the 

course of medical practice if they were 

not participating in the clinical trial. 

Therefore, FDA believes the threshold 

for charging in this situation should be 

lower than the threshold for charging by 

a sponsor for the sponsor’s own 

investigational drug. To charge for an 

approved drug in this situation, a 


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sponsor must demonstrate that the trial 

is of adequate design to evaluate the 

safety or effectiveness of the sponsor’s 

drug and that the drug is not being 

provided free of charge by its 

manufacturer (proposed § 312.8(b)(2)(i) 

and (b)(2)(ii)). 

Proposed § 312.8(b)(3) describes 

criteria for 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). This provision is 

primarily intended to enable sponsors 

who are not commercial entities in the 

business of drug development to study 

new uses of approved drugs that might 

not be of commercial interest to the 

drug’s manufacturer or to conduct 

studies that provide additional 

information about a drug that might not 

otherwise be obtained. Typically, these 

sponsors are sponsor-investigators 

conducting relatively small trials at a 

single site. Such sponsors lack the 

resources of commercial sponsors and 

are not conducting the research for 

commercial purposes, so 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. 

Therefore, FDA believes the threshold 

for charging by a sponsor in this 

situation should be lower than the 

threshold for charging for the sponsor’s 

own investigational drug. To charge for 

an approved drug in this situation, a 

sponsor must demonstrate that the 

clinical trial of the approved drug is of 

adequate design to evaluate the safety or 

effectiveness of a new indication, or 

provide important safety information 

related to an approved indication, and 

that the drug is not being provided free 

of charge by its manufacturer (proposed 

§ 312.8(b)(3)(i) and (b)(3)(ii)). 

Proposed § 312.8(b)(4) 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, proposed 

§ 312.8(b)(4) 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. Expanded Access for Treatment Use 

Proposed § 312.8(c) sets forth the 

criteria for charging for the three types 

of expanded access to investigational 

drugs for treatment use described in 

proposed subpart I of part 312 described 

elsewhere in this issue of the Federal 

Register. Proposed subpart I describes 

two types of treatment use (expanded 

access for individual patients and 

expanded access for intermediate size 

patient populations) not previously 

described in FDA’s regulations and, 

therefore, not specifically contemplated 

by the existing charging regulation. 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, proposed 

§ 312.8(c)(1) would require a sponsor 

wishing to charge for an investigational 

drug for any of the three types of 

expanded access under proposed 

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 (§ 312.305 of 

proposed subpart I) or intermediate size 

patient population expanded access 

(§ 312.310 of proposed subpart I) 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 

protocol (§ 312.320 of proposed subpart 

I). Treatment INDs or 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, proposed 

§ 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 protocol will not 

interfere with drug development. 

Sponsors would be 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 (proposed § 312.8(c)(2)(i)). 

Sponsors would also be required to 

provide evidence of adequate progress 

in the development of the drug for 

marketing approval (proposed 

§ 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 

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)). 

Proposed § 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 

would be limited to a single patient. 

Similarly, the authorization to charge 

under an intermediate size patient 

population expanded access submission 

would be limited to the number of 

patients permitted to receive the drug 

under that particular intermediate 

patient population expanded access IND 

or protocol. 

Proposed § 312.8(c)(4) provides that 

FDA will ordinarily authorize charging 

for expanded access for treatment use 

under proposed subpart I to continue for 

1 year from the time of FDA 

authorization. It also provides FDA the 

discretion to specify a shorter 

authorization. FDA proposes to limit 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 would exercise its 

discretion to specify a shorter duration 

when there is a particular concern that 

charging could interfere with drug 

development. Proposed § 312.8(c)(4) 

provides that a sponsor may request that 

FDA reauthorize charging for additional 

periods. 

D. Recoverable Costs 

Proposed § 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 proposed 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 a drug when the drug is 

extraordinarily expensive. Thus, 

proposed § 312.8(d)(1) would limit cost 

recovery to the direct costs of making 

the investigational drug available in 

these situations. Indirect costs could not 

be recovered. 

Proposed § 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 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 71, No. 240 / Thursday, December 14, 2006 / Proposed Rules 75173 

1In 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.’’

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 

making the drug available for a variety 

of investigational uses, are not 

appropriate for cost recovery for these 

investigational uses because these are 

costs that would be incurred even if the 

clinical trial or expanded access use for 

which charging is authorized did not 

occur. Proposed § 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 

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, proposed 

§ 312.8(d)(2) would permit a sponsor to 

recover the costs of administering 

treatment use programs for intermediate 

size patient populations and for 

treatment INDs and protocols, as well as 

the direct costs of the drug. The 

proposed rule would not authorize 

sponsors to recover administrative costs 

associated with expanded access for 

individual patients because these costs 

would be so minor. 

Proposed § 312.8(d)(2) provides that, 

in addition to the direct costs of the 

drug described in proposed 

§ 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 of proposed 

subpart I. 

Sponsors who provide investigational 

drugs for expanded access for treatment 

use for intermediate size patient 

populations and for treatment INDs and 

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, proposed 

§ 312.8(d)(2) would permit a sponsor to 

recover the costs of administering 

treatment use programs for intermediate 

size patient populations and for 

treatment INDs and protocols, as well as 

the direct costs of the drug. The 

proposed rule would not authorize 

sponsors to recover administrative costs 

associated with expanded access for 

individual patients because these costs 

would be so minor. 

Proposed § 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 proposed 

§ 312.8(d). If such documentation relies 

on financial information or accounting 

methods beyond the expertise of FDA 

reviewers, FDA may request that a 

sponsor provide independent 

certification that its cost recovery 

calculation is consistent with the 

requirements of this section. 

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 proposed 

rule. This proposed rule would clarify 

and slightly expand the charging 

scheme that is already in place. It is 

based on the agency’s1 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 proposed rule would add 

to and clarify the existing IND 

regulations by revising the current 

charging regulation 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 proposed rule. One of that 

section’s preconditions to providing an 

investigational drug for treatment use is 

that the sponsor submit a protocol 

consistent with regulations issued under 

section 505(i) of the act. (See section 

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

rulemaking, proposed under section 

505(i) of the act, 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 

proposed 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 proposed rule is not an 

economically significant regulatory 

action as defined by the Executive 

order. 


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75174 Federal Register / Vol. 71, No. 240 / Thursday, December 14, 2006 / Proposed Rules 

The Regulatory Flexibility Act 

requires agencies to analyze regulatory 

options that would minimize any 

significant impact of a rule on small 

entities. Currently, the agency does not 

believe that the proposed rule will have 

a significant economic impact on a 

substantial number of small entities. 

Nevertheless, we recognize our 

uncertainty regarding the number and 

size distribution of affected entities as 

well as the economic impact of the 

proposed rule on those entities. 

Therefore, the analysis presented below, 

along with other relevant sections of 

this document, constitutes the agency’s 

initial regulatory flexibility analysis. 

The agency specifically requests 

detailed public comment regarding the 

number of affected small entities as well 

as the potential economic impact of the 

proposed rule on those 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 

approximately $122 million, using the 

most current (2005) Implicit Price 

Deflator for the Gross Domestic Product. 

FDA does not expect this proposed rule 

to result in any one-year expenditure 

that would meet or exceed this amount. 

A. Objectives of the Proposed Action 

FDA is proposing this action to clarify 

and expand on an existing regulation (in 

place since 1987) that permits sponsors 

to charge patients for investigational 

drugs. Currently, FDA may authorize 

charging for an investigational drug 

used in a clinical trial or under a 

treatment IND or treatment protocol. 

This proposed rule would expand the 

agency’s authority to permit charging for 

investigational drugs in a number of 

other situations. In clinical trial settings, 

the proposed rule would add provisions 

that permit charging for another entity’s 

approved drug—either for use as an 

active control, as combination therapy 

with its own drug, or to study new 

indications. The proposed rule would 

also add provisions that permit charging 

for investigational drugs for all of the 

various types of expanded access for 

treatment use described under proposed 

subpart I of part 312. Finally, the 

proposed rule describes more 

specifically the types of costs that could 

be recovered when charging for an 

investigational drug. 

B. The Need for the Proposed Rule 

This proposed rule is needed for 

several reasons. The current charging 

regulation only provides for charging for 

a sponsor’s own drug in a clinical trial. 

However, since the charging rule was 

adopted in 1987, FDA has received 

requests to charge in a clinical trial for 

approved drugs that must be obtained 

from another company. In one situation, 

an approved drug is being used in a 

clinical trial as an active control or in 

combination with the sponsor’s drug. In 

another situation, a third party who is 

not a manufacturer requests permission 

to charge for an approved drug that is 

being studied in the hope of discovering 

new uses for that drug. The proposed 

rule would authorize charging for 

approved drugs in these situations and 

provide criteria governing such requests 

to charge. 

The proposed rule is also needed to 

establish charging provisions for types 

of expanded access for treatment use 

other than the treatment IND or 

treatment protocol. Elsewhere in this 

issue of the Federal Register, FDA is 

proposing to amend part 312 of its 

regulations by adding subpart I 

concerning expanded access to 

investigational drugs for treatment use. 

In addition to the treatment IND or 

treatment protocol currently described 

in FDA regulations, the expanded access 

proposed rule would specifically 

authorize expanded access for 

individual patients, including in 

emergencies, and expanded access for 

intermediate size patient populations. 

The expanded access proposed rule is 

intended to improve access to 

investigational drugs for patients with 

serious or life-threatening conditions 

who have exhausted other therapeutic 

options and may benefit from such 

therapies. This proposed rule is 

necessary to establish provisions that 

would permit charging for 

investigational drugs for all of the types 

of expanded access use described under 

proposed subpart I. 

Finally, the proposed rule is needed 

to clarify and better explain the types of 

costs sponsors are permitted to recover 

through charging. The current 

regulatory language 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 current regulatory language 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. An extraordinary 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 study 

subjects typically must receive some 

therapy for their disease or condition 

because using a placebo control would 

be unethical. In addition, the subjects 

often would be treated with the 

approved drug in the course of medical 

practice if they were not participating in 

the clinical trial. Therefore, FDA 

believes the threshold for charging in 

this situation should be lower than the 

threshold for charging for the sponsor’s 

own investigational drug. 

In other situations, an approved drug 

must be obtained by a third party (not 

the manufacturer) to study the drug in 

a clinical trial for a new indication 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 


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yield important data about less 

commercially viable uses of a drug or 

additional drug safety information. 

Therefore, FDA believes the threshold 

for charging by a sponsor in this 

situation should be lower than the 

threshold for charging for the sponsor’s 

own investigational drug. 

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 1.1 treatment IND 

or treatment protocol charging requests 

per year during this period. Thus, 

requests to charge under treatment INDs 

or treatment protocols were associated 

with about 0.06 percent (0.0006 = 1.1 / 

2,046.6) of all INDs received by the 

agency each year. Finally, FDA received 

an average of 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 treatment protocols. 

Such situations would generally include 

requests to charge for expanded access 

in intermediate-size patient populations 

and under clinical trials. Because the 

intermediate-size patient population 

IND or protocol is not currently 

established in regulation, a more precise 

distribution of other charging requests 

cannot be determined. Nevertheless, 

other charging requests were associated 

with about 0.76 percent (0.0076 = 15.6 

/ 2,046.6) of all INDs received by the 

agency each year from 1997 through 

2005. This information is summarized 

in table 1 below. 

TABLE 1. BASELINE DATA FOR NUMBER OF INDS AND CHARGING REQUESTS BY CATEGORY

Category Total INDs All Charging Requests Treatment IND/ or Protocol Requests Other Charging Requests 

Number 2,046 .6 22 .6 1 .1 15 .6 

Percent of all 

INDs 100 .0% 1 .1% 0 .06% 0 .76% 

FDA also received an average of 659 

individual patient and emergency INDs 

per year during the period 1997 through 

2005. This number represents 

approximately 32.2 percent (0.322 = 659 

/ 2,046.6) of all INDs received by the 

agency each year. During this same 

period, FDA received an average of 7.1 

charging requests for individual patient 

or emergency INDs or protocols per 

year. Thus, charging requests are 

associated with about 1.1 percent 

(0.0108 = 7.1 / 659) of all individual 

patient and emergency INDs or 

protocols received by the agency each 

year. This information is summarized in 

table 2 below. 

TABLE 2: BASELINE DATA FOR NUMBER

OF INDIVIDUAL PATIENT/EMERGENCY

INDS

Category 

Individual Patient 

or Emergency 

INDs 

Charging 

Requests 

Number 659.0 7.1 

Percent 100.0% 1.1% 

E. Nature of the Impact 

The proposed rule would affect 

patients who lack effective therapeutic 

alternatives for serious and lifethreatening conditions; sponsors who 

develop drugs to treat serious and lifethreatening conditions; 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 proposed rule 

would improve patient access by 

providing a financial incentive for 

sponsors to make promising therapies 

more widely available. Thus, this 

proposed 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 situations in which charging for 

an investigational drug may be 

permitted, this proposed rule would 

likely increase the volume of charging 

requests somewhat. However, by 

clarifying the circumstances under 

which charging would be permitted and 

specifying the types of costs that 

sponsors could recover, this proposed 

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 proposed rule will 

not be significant. 

This proposed rule could also 

increase treatment expenses for some 

patients who obtain investigational 

drugs for which charging is permitted, 

or for third party payors if they choose 

to reimburse patients for some or all of 

the costs of such drugs. The agency 

believes that such costs 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 

otherwise be made available without 

charging. The potential impact of 

specific provisions of the proposed rule 

is discussed in greater detail in the 

following paragraphs. 

1. Charging in a Clinical Trial 

a. Charging for a sponsor’s drug in a 

clinical trial. The existing charging 

regulation has permitted charging for 

investigational drugs in clinical trials 

intended to support marketing approval 

since 1987. This proposed 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 proposed rule to have a 

significant effect on the number of 

requests to charge for sponsors’


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75176 Federal Register / Vol. 71, No. 240 / Thursday, December 14, 2006 / Proposed Rules 

investigational drugs in clinical trials to 

support initial marketing approval. 

b. Charging for an approved drug in 

a clinical trial. As discussed in section 

II.A of this document, a major reason for 

revising the current charging regulation 

is to describe criteria for charging for 

approved drugs in clinical trials that are 

subject to part 312. These criteria are 

needed because the bulk of the requests 

to charge in the clinical trial setting 

have been requests to charge for 

approved drugs and the existing criteria 

do not readily apply to this situation. 

By explicitly acknowledging that 

charging for an approved drug in a 

clinical trial subject to part 312 is 

possible under appropriate 

circumstances, this proposed rule 

should increase awareness of this option 

and thus stimulate requests to charge. 

The extent to which the volume of such 

requests might increase is uncertain. 

FDA’s experience is that sponsors are 

most likely to request to charge when 

the drug is quite expensive and that 

expense represents a substantial burden 

relative to the sponsor’s resources. 

Because prescription drugs are 

becoming increasingly expensive, it is 

reasonable to expect that approved 

products used in clinical trials will 

become increasingly expensive as well. 

However, because charging may affect a 

sponsor’s ability to enroll subjects in 

clinical trials in a timely manner, FDA 

believes that sponsors will continue to 

be reluctant to charge unless the cost is 

truly burdensome. Therefore, FDA does 

not anticipate a substantial increase in 

the number of these requests to charge. 

2. Charging for Expanded Access for 

Treatment Uses Described Under 

Proposed Subpart I 

a. Expanded access for individual 

patients. FDA anticipates that there 

would be some increase in the number 

of requests to charge for investigational 

drugs for expanded access for 

individual patients. By establishing in 

regulation that it may be permissible to 

charge for an investigational drug for 

expanded access for individual patients, 

this proposed rule should increase 

awareness of the option to charge and 

thereby stimulate additional requests. In 

addition, as discussed in the preamble 

to the expanded access proposed rule, 

that rule is anticipated to initially 

increase the overall volume of expanded 

access for individual patients, which 

may also lead to some increase in the 

volume of requests to charge. 

For the period 1997 through 2005, 

FDA received an average of 7.1 requests 

per year to charge for such use, or about 

1.1 percent (0.011 = 7.1 charging 

requests/659 single patient INDs per 

year) of all individual patient treatment 

use. The extent to which the volume of 

requests to charge for expanded access 

for individual patients would increase 

under the proposed rule is uncertain. 

Historically, sponsors have been willing 

to provide an investigational drug to an 

individual patient free of charge in most 

cases, presumably because the cost is 

not great. However, this willingness 

may be tempered somewhat if there is 

an increase in the volume of requests for 

expanded access for individual patients 

received by a particular sponsor, 

especially if the cost of the drug is 

relatively high. There may also be some 

increase in the number of requests to 

charge for expanded access for 

individual patients because the 

prevalence of costly drugs is increasing. 

At this time, FDA has no reasoned basis 

to project a percentage increase in the 

number of charging requests for 

expanded access to investigational 

drugs for individual patients. However, 

because the cost of providing a drug to 

a single patient is usually not a 

substantial burden for a sponsor, FDA 

believes that the number of requests to 

charge for individual patient expanded 

access would continue to represent a 

relatively small percentage of such use. 

b. Expanded access for intermediate 

size patient populations. By establishing 

in regulation that it is possible to charge 

for expanded access to an 

investigational drug for treatment use in 

an intermediate size patient population, 

the proposed rule should increase 

awareness that charging may be 

permitted for such uses, thereby 

stimulating requests to charge. Because 

access to expanded access for 

intermediate size patient populations 

has to date been authorized informally, 

FDA does not have records to indicate 

the number of times charging has been 

requested or permitted for this type of 

treatment use. If charging has been 

permitted in these situations, the 

authorizations would have been 

grouped with, and cannot be 

differentiated from, the authorizations 

to charge under clinical trials. 

FDA does not anticipate a significant 

number of charging requests for 

expanded access for intermediate size 

patient populations. Historically, 

sponsors have been willing to provide 

drugs free of charge to a limited number 

of patients for treatment use. As in the 

case of expanded access for individual 

patients, we expect this behavior would 

continue. 

c. Treatment INDs and treatment 

protocols. The agency’s current 

regulations allowing charging for 

investigational drugs under a treatment 

IND or treatment protocol (in place 

since 1987) would be clarified, but not 

significantly altered, by the proposed 

rule. Therefore, the agency does not 

anticipate that the proposed rule would 

lead to a change in the number of 

requests to charge under treatment 

protocols or treatment INDs. 

3. Costs Recoverable When Charging for 

an Investigational Drug 

Finally, the proposed rule clarifies 

and better explains the types of costs 

sponsors are permitted to recover 

through charging. In particular, 

sponsors would be limited to recovery 

of the direct or marginal costs associated 

with making an investigational drug 

available for the approved treatment 

use. Direct costs that would be 

recoverable under the proposed rule 

include per unit manufacturing costs 

and shipping and handling costs. In 

addition, the proposed rule would 

permit 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 

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 proposed rule 

does not significantly change the 

existing regulation. The agency does 

expect some incremental impact from 

the proposed provisions that would 

allow charging for approved drugs in 

clinical trial and for expanded access for 

single patients and intermediate size 

patient populations. The agency 

believes the impact of these provisions 

would be limited for the reasons 

described previously in this document, 

but we are unable to estimate the 

quantitative impact because of a lack of 

reliable data. Thus, the following 

discussion describes, in general terms, 

the nature of the associated benefits and 

costs. 

F. Benefits of the Proposed Rule 

Because FDA currently has no data 

that would allow us to predict the 

quantitative impact of the proposed 

rule, it is not possible to accurately 

quantify the magnitude of any expected 

incremental benefits at this time. We 

would expect the number of requests to 

charge for investigational drugs for 

expanded access use to increase 

somewhat. However, the number of 

additional patients that would gain 


jlentini on PROD1PC65 with PROPOSAL
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2See http://swz.salary.com/salarywizard/ 

layoutscripts/swzl_newsearch.asp, last viewed 7/6/ 

05. (FDA has verified the Web site address, but we 

are not responsible for subsequent changes to the 

Web site after this document publishes in the 

Federal Register.) 

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

layoutscripts/swzl_newsearch.asp, last viewed 7/6/ 

05. (FDA has verified the Web site address, but we 

Continued 

access to investigational drugs as a 

result and the extent to which these 

patients would 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 would ease the administrative 

burdens associated with obtaining 

authorization to charge and could 

improve patient access to 

investigational drugs for treatment use. 

Private benefits would accrue to 

individual patients receiving the drugs, 

whereas social benefits would accrue if 

society also values these individual 

patient benefits. Because the overall 

impact of the proposed rule is not 

expected to be significant, the potential 

for any new regulatory benefits is 

somewhat limited. 

In formulating the proposed 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 and lifethreatening conditions (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 would experience 

diminished social benefits due to the 

reduced or delayed availability of new 

therapies approved for marketing by 

FDA. 

The proposed rule would address 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 proposed rule 

would effectively address the interests 

of those patient populations that would 

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 proposed rule would limit 

sponsors to recovery of the direct or 

marginal costs associated with making 

the drug available. Direct costs that are 

recoverable under the proposed 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 would be specifically excluded 

under the cost recovery provisions of 

the proposed rule. The agency believes 

that these cost recovery provisions 

would 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 would also 

ensure that drug development costs that 

properly belong to sponsors are not 

shifted to patients. 

G. Costs of the Proposed Rule 

Although the proposed rule largely 

clarifies current agency practice, some 

additional paperwork costs would 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 

proposed rule are not expected to 

impose a significant burden. Drug 

sponsors who wish to charge for 

investigational drugs would 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 

would 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 proposed rule 

would be limited to the new charging 

provisions for the following: (1) Clinical 

trials using approved drugs and (2) the 

new mechanisms for expanded access 

for treatment use described under 

proposed subpart I of part 312. Second, 

the agency does not expect that these 

proposed charging provisions would 

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 

would increase substantially. Finally, 

requests to charge are relatively 

infrequent and the expense necessary to 

prepare a charging request would 

ordinarily be small compared to the 

overall cost of preparing the expanded 

access submission. 

The agency estimates that, on average, 

48 hours would be needed to prepare a 

request to charge under the proposed 

rule. This estimate is based on FDA’s 

experience in reviewing charging 

requests under the 1987 regulation and 

on a projection of the increased 

paperwork burden associated with the 

proposed rule. 

FDA believes that 80 percent, or about 

38 hours, of this burden would 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 would 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) was approximately 

$102,000 per year in 2004 or about $49 

per hour ($102,138/2,080 hours).2 Thus 

the cost associated with certifying the 

amount to be charged is expected to be 

about $1,900 ($49 per hour x 38 hours) 

per charging request. 

The remaining burden—20 percent or 

about 10 hours—for the preparation of 

a charging request would 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 

would 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 would likely be 

performed by a mid-level regulatory 

affairs person. Information available on 

the Internet indicates that the total 

median compensation for a Regulatory 

Affairs Specialist II (intermediate level) 

was approximately $80,000 or about $39 

per hour in 2004 ($80,288/2,080 

hours).3 Thus, the cost to demonstrate 


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are not responsible for subsequent changes to the 

Web site after this document publishes in the 

Federal Register.) 

that a charging request meets 

appropriate criteria is about $400 (10 

hours x $39 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 would thus be about 

$2,300 ($1,900 + $400). We also believe 

that the total costs associated with this 

proposed rule will be widely dispersed 

among affected entities because 

charging requests are rare, and thus, a 

particular sponsor would be expected to 

submit such a request very infrequently. 

A significant concern with the 

proposed 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 

would continue. 

H. Minimizing the Impact on Small 

Entities 

The agency does not believe that the 

proposed rule will have a significant 

economic impact on a substantial 

number of small entities. Nevertheless, 

we recognize our uncertainty regarding 

the number and size distribution of 

affected entities as well as the economic 

impact of the proposed rule on those 

entities. The agency specifically 

requests detailed public comment 

regarding the number of affected small 

entities as well as the potential 

economic impact of the proposed rule 

on those 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 

would not be submitted by small 

entities. Most single patient INDs are for 

treatment use and are submitted by 

individual physicians, and these entities 

would 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 

would increase substantially. Because 

expanded access for intermediate size 

patient populations is not currently 

tracked by the agency, no data exist that 

would allow the agency to identify 

either the number of sponsors in this 

category or the number that would 

qualify as small entities. FDA believes 

that requests to charge for 

investigational drugs in clinical trials of 

a sponsor’s drug, whether the drug 

charged for is the sponsor’s own drug or 

is an approved drug used for 

combination therapy or as an active 

control, would generally be submitted 

by large commercial drug sponsors. 

Requests to charge for an approved drug 

that is being studied for a new use 

would likely come from researchers or 

research organizations that meet the 

SBA standards for small business. In 

sum, the agency believes that some 

entities submitting charging requests 

would meet SBA small businesses 

criteria. However, because this 

determination is uncertain, the agency 

specifically requests detailed public 

comment regarding the number and size 

distribution of entities that would be 

affected by the proposed rule, as well as 

the economic impact of the rule on 

those entities. As discussed in section 

V.E of this document, the agency 

expects that any incremental burden 

associated with the proposed rule 

would be small and widely dispersed 

among affected entities. 

FDA considered several alternatives 

to the proposed rule. Each is discussed 

in the following paragraphs: 

• Do not revise the current charging 

rule. 

FDA considered and rejected this 

alternative because the current charging 

rule does not address all of the types of 

requests to charge for drugs in clinical 

trials received by the agency. 

Furthermore, the current charging rule 

does not address all of the types of 

expanded access to investigational 

drugs for treatment use specified under 

proposed subpart I of part 312. 

• Do not permit charging for 

approved drugs in clinical trials. 

FDA considered this alternative. 

However, requests to charge for 

investigational drugs in a clinical trial 

would then be limited to requests to 

charge for the sponsor’s drug that was 

being tested in the trial. In fact, the 

agency has received few such requests. 

Far more common are requests to charge 

for approved drugs in trials when the 

drugs must be obtained from another 

company. The approved drug may be 

used in a trial of the sponsor’s drug as 

an active control or in combination with 

the sponsor’s drug. Even more common 

are requests to charge for approved 

drugs used in studies by a third party 

(e.g., not the manufacturer) that are 

intended to evaluate the approved drug, 

for example, to discover a new use. FDA 

believes that requests to charge for 

investigational drugs in these situations 

may be appropriate; thus the agency 

believes the current charging rule 

should be revised to specifically 

contemplate such requests and to 

provide criteria applicable to such 

requests. 

• Do not permit charging for 

expanded access for individual patients 

or for intermediate size patient 

populations. 

FDA considered not revising the 

current regulation 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 proposing to 

amend 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 that proposal 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 propose to permit charging 

for investigational drugs in all expanded 

access settings to improve access to 

investigational drugs for patients with 

serious or life-threatening diseases or 

conditions who lack other therapeutic 

options and who may benefit from such 

therapies. 

VII. Paperwork Reduction Act of 1995 

This proposed rule contains 

collections of information that are 

subject to review by OMB under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3520). ‘‘Collection of 

information’’ includes any request or 

requirement that persons obtain, 

maintain, retain, or report information 

to the agency, or disclose information to 

a third party or to the public (44 U.S.C. 

3502(3) and 5 CFR 1320.3(c)). The title, 

description, and respondent description 

of the information collection are shown 

in the following paragraphs, with an 


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estimate of the annual reporting burden. 

Included in the estimate is the time for 

reviewing instructions, gathering and 

maintaining the data needed, and 

completing and reviewing the collection 

of information. 

FDA invites comments on the 

following topics: (1) Whether the 

proposed collection of information is 

necessary for proper performance of 

FDA’s functions, including whether the 

information will have practical utility; 

(2) the accuracy of FDA’s estimate of the 

burden of the proposed collection of 

information, including the validity of 

the methodology and assumptions used; 

(3) ways to enhance the quality, utility, 

and clarity of the information to be 

collected; and (4) ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques, 

when appropriate, and other forms of 

information technology. 

Title: Charging for Investigational 

Drugs 

Description: The proposed 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 proposed 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 

proposed rule also describes the types of 

costs that can be recovered when 

charging for an investigational drug. 

Section 312.8(a)(1) of the proposed 

rule 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 charging in a clinical trial or charging 

for expanded access. 

Section 312.8(b) of the proposed rule 

describes the criteria for charging in a 

clinical trial in three situations. 

Proposed § 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 cost of the drug is 

extraordinary. 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. 

Proposed § 312.8(b)(2) describes 

criteria for 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 effectiveness or safety of 

the sponsor’s investigational drug. To 

charge for an approved drug in this 

situation, a sponsor must demonstrate 

that the trial is of adequate design to 

evaluate the safety or effectiveness of 

the sponsor’s drug and that the drug is 

not being provided free of charge by its 

manufacturer. 

Proposed § 312.8(b)(3) describes 

criteria for 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). To charge for an 

approved drug in this situation, a 

sponsor must demonstrate that the 

clinical trial of the approved drug is of 

adequate design to evaluate the safety or 

effectiveness of a new indication or 

provide important safety information 

related to an approved indication and 

that the drug is not being provided free 

of charge by its manufacturer. 

Proposed § 312.8(c) describes criteria 

for charging for an investigational drug 

for 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) of the proposed 

rule provides that a sponsor who wishes 

to charge for an investigational drug 

must justify the amount to be charged. 

Section 312.8(d) of the proposed rule 

describes more specifically the costs 

that are potentially recoverable. 

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

sponsor may recover only the direct 

costs of making the investigational drug 

available. Proposed § 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. 

Proposed § 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, 

e.g., 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. 

Proposed § 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 1 of this document presents the 

estimated annualized reporting burden 

for the total number of charging 

requests. The estimates in the table have 

been derived in the following manner. 

Between 1999 and 2003, FDA received 

approximately 25 requests to charge for 

investigational drugs annually. FDA 

estimates that there will be a 25 to 50 

percent increase in requests to charge if 


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the proposed rule is finalized. These 

requests are expected to be requests to 

charge for expanded access for single 

patients and intermediate size patient 

populations and for approved drugs in 

clinical trials. Accordingly, table 1 of 

this document gives the total annual 

responses as 38 (25 x 1.50 = 37.5). 

FDA’s experience has been that, in 

general, a single sponsor does not make 

multiple requests to charge for 

investigational drugs in the same year. 

However, the agency anticipates 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 35. 

FDA believes the largest portion of the 

paperwork burden associated with the 

proposed rule would be 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 (proposed § 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 (proposed 

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

need to support its suggested charge for 

these expenses. 

The remaining portion of the 

paperwork burden associated with the 

proposed rule would be to show that the 

criteria applicable to the specific type of 

charging request (i.e., the type of 

clinical trial (proposed § 312.8(b)) or 

type of expanded access (proposed 

§ 312.8(c))) have been met. 

FDA estimates the average number of 

hours needed to prepare a request to 

charge for an investigational drug under 

the proposed rule as 48. This estimate 

is based on FDA’s experience in 

reviewing charging requests in the past 

and on a projection of the increased 

paperwork burden associated with the 

proposed rule. 

TABLE 1.—ESTIMATED ANNUAL REPORTING BURDEN1

21 CFR Section No. of 

Respondents 

No. of Responses 

per Respondent 

Total Annual 

Responses 

Hours Per 

Response Total Hours 

312.8 35 1.08 38 48 1,824 

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

VIII. Federalism 

FDA has analyzed this proposed 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. 

IX. Request for Comments 

Interested persons may submit to the 

Division of Dockets Management (see 

ADDRESSES) written or electronic 

comments regarding this document. 

Submit a single copy of electronic 

comments or two paper copies of any 

mailed comments, except that 

individuals may submit one paper copy. 

Comments are to be identified with the 

docket number found in brackets in the 

heading of this document. Received 

comments may be seen in the Division 

of Dockets Management between 9 a.m. 

and 4 p.m., Monday through Friday. 

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, it is proposed that 

21 CFR part 312 be 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. 

§ 312.7 [Amended] 

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. 

(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 treatment use under 

subpart I of this part. 

(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. 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. 


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(2) Charging for an approved drug 

obtained from another entity for use as 

an active control or in combination with 

another drug. A sponsor who wishes to 

charge for an approved drug that it must 

obtain from another entity for use as an 

active control or in combination with its 

investigational drug in a clinical trial of 

the sponsor’s investigational drug must: 

(i) Demonstrate that the clinical trial 

is adequately designed to evaluate the 

safety or effectiveness of the sponsor’s 

drug; and 

(ii) Demonstrate that the holder of the 

approved application is not providing 

the drug to the sponsor free of charge. 

(3) Charging for an approved drug 

obtained from another entity in a 

clinical trial of that drug. A sponsor 

who wishes to charge for an approved 

drug that it must obtain from another 

source for use in a clinical trial intended 

to evaluate the acquired drug must: 

(i) 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 

(ii) Demonstrate that the holder of the 

approved application is not providing 

the drug to the sponsor free of charge. 

(4) 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, 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 one 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 the 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 and 312.320, in 

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. 

(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. 

Dated: December 6, 2006. 

Jeffrey Shuren, 

Assistant Commissioner for Policy. 

[FR Doc. 06–9685 Filed 12–11–06; 10:01 am] 

BILLING CODE 4160–01–S 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4050 and 4281 

RIN 1212–AB08 

Mortality Assumptions 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule is a 

companion to PBGC’s direct final rule 

(published today in the ‘‘Rules and 

Regulations’’ section of the Federal 

Register) making changes to the 

mortality assumptions under parts 4050 

(Missing Participants) and 4281 (Duties 

of Plan Sponsor Following Mass 

Withdrawal) of its regulations. PBGC is 

making these changes as a direct final 

rule without prior proposal because we 

view them as non-controversial 

revisions and anticipate no significant 

adverse comment. We have explained 

our reasons in the preamble to the direct 

final rule. If we receive no significant 

adverse comment, no further action on 

this proposed rule will be taken. 

However, if we receive significant 

adverse comment, we will withdraw the 

direct final rule and it will not take 

effect. In that case, we will address all 

public comments in a subsequent final 

rule based on this proposed rule. We 

will not institute a second comment 

period on this rule. Any parties 

interested in commenting must do so at 

this time. 

DATES: Comments must be received on 

or before January 16, 2007. 

ADDRESSES: Comments, identified by 

RIN number 1212–AB08, may be 

submitted by any of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the Web 

site instructions for submitting 

comments. 

• E-mail: reg.comments@pbgc.gov. 

• Fax: 202–326–4224. 

• Mail or Hand Delivery: Legislative 

and Regulatory Department, Pension 

Benefit Guaranty Corporation, 1200 K 

Street, NW., Washington, DC 20005–

4026. 

All submissions must include the 

Regulatory Information Number for this 

rulemaking (RIN number 1212–AB08). 

Comments received, including personal 

information provided, will be posted to 

http://www.pbgc.gov. Copies of 

comments may also be obtained by 

writing to Disclosure Division, Office of 

the General Counsel, Pension Benefit 

Guaranty Corp., 1200 K Street, NW, 

Washington, DC 20005–4026 or calling 


jlentini on PROD1PC65 with PROPOSAL