[Federal Register Volume 74, Number 155 (Thursday, August 13, 2009)]
[Rules and Regulations]
[Pages 40872-40900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19004]
[[Page 40871]]
-----------------------------------------------------------------------
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Food and Drug Administration
-----------------------------------------------------------------------
21 CFR Part 312 and 316
Charging for Investigational Drugs Under and Investigational New Drug
Application; Expanded Access to Investigational Drugs for Treatment
Use; Final Rules
Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 /
Rules and Regulations
[[Page 40872]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 312
[Docket No. FDA-2006-N-0237] (formerly Docket No. 2006N-0061)
RIN 0910-AF13
Charging for Investigational Drugs Under an Investigational New
Drug Application
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is amending its
investigational new drug application (IND) regulation concerning
charging patients for investigational new drugs. This final rule
revises the charging regulation to clarify the circumstances in which
charging for an investigational drug in a clinical trial is
appropriate, to set forth criteria for charging for an investigational
drug for the different types of expanded access for treatment use
described in the agency's final rule on expanded access for treatment
use of investigational drugs published elsewhere in this issue of the
Federal Register, and to clarify what costs can be recovered for an
investigational drug. This final rule will permit charging for a
broader range of uses than was explicitly permitted previously.
DATES: This rule is effective October 13, 2009.
FOR FURTHER INFORMATION CONTACT:
For the Center for Drug Evaluation and Research: Colleen L.
Locicero, Center for Drug Evaluation and Research, Food and Drug
Administration, 10903 New Hampshire Ave., Bldg. 22, rm. 4200, Silver
Spring, MD 20993-0002, 301-796-2270.
For the Center for Biologics Evaluation and Research: Stephen M.
Ripley, Center for Biologics Evaluation and Research (HFM-17), Food and
Drug Administration, 1401 Rockville Pike, Rockville, MD 20852-1448,
301-827-6210.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Overview of the Final Rule, Including Changes to the Proposed
Rule
A. General Requirements for Charging
B. Charging in Clinical Trials
C. Charging for Expanded Access to Investigational Drugs for
Treatment Use
D. Recoverable Costs
III. Comments on the Proposed Rule
A. Overview of Comments
B. General Comments
C. General Criteria for Charging
1. Justification for the Amount To Be Charged
2. Prior Written Authorization to Charge
3. Withdrawal of Authorization to Charge
4. Lack of Timeframe for FDA Response
D. Charging in a Clinical Trial
1. General Comments
2. Charging for the Sponsor's Own Drug in a Clinical Trial
3. Charging for an Approved Drug Obtained From Another Entity
for Use as an Active Control or in Combination With Another Drug
4. Charging for an Approved Drug Obtained From Another Entity in
a Clinical Trial of the Drug
5. Duration of Charging in a Clinical Trial
E. Charging for Expanded Access to Investigational Drugs for
Treatment Use
1. General Comments
2. Increasing Access
3. Ethical Considerations
4. Non-Interference With Drug Development
5. Treatment INDs or Treatment Protocols
6. 1-Year Authorization
F. Costs Recoverable When Charging for an Investigational Drug
1. Direct and Indirect Costs
2. Recoverable Costs for Expanded Access Uses
3. Supporting Documentation
4. Authority to Set Pricing
5. Confidentiality
6. Effect on Payment Systems (CMS and Insurance)
7. Collaboration With CMS and the National Cancer Institute
G. Miscellaneous Comments
1. Promotion
2. Liability
3. Product Labeling
4. Analysis of Impact
IV. Legal Authority
V. Environmental Impact
VI. Analysis of Economic Impacts
A. Objectives of the Final Rule
B. The Need for the Final Rule
C. Why Allow Charging?
D. Baseline for the Analysis
E. Nature of the Impact
1. Charging in a Clinical Trial
2. Charging for Expanded Access Uses Described Under Final
Subpart I
3. Costs Recoverable When Charging for an Investigational Drug
4. Summary
F. Benefits of the Final Rule
G. Costs of the Final Rule
H. Minimizing the Impact on Small Entities
I. Alternatives
VII. Paperwork Reduction Act of 1995
VIII. Federalism
I. Background
In the Federal Register of December 14, 2006 (71 FR 75168)
(proposed rule), we proposed to amend our IND regulation concerning
charging patients for investigational new drugs (former Sec. 312.7(d)
(21 CFR 312.7(d))) and to add new Sec. 312.8 (charging for
investigational drugs). Under FDA's previous Sec. 312.7(d), FDA could
authorize charging for an investigational drug used in a clinical trial
under an IND and for an investigational drug used in a treatment
protocol or treatment IND:
Former Sec. 312.7(d)(1) provided that a sponsor that
wished to charge for an investigational drug in a clinical trial needed
to provide a full written explanation of why charging was necessary for
the sponsor to undertake or continue the clinical trial, e.g., why
distribution of the drug to test subjects should not be considered part
of the normal cost of doing business.
Former Sec. 312.7(d)(2) described several conditions that
needed to be met to charge for an investigational drug used under a
treatment protocol or treatment IND.
Former Sec. 312.7(d)(3) provided that a sponsor could not
commercialize an investigational drug by charging a price larger than
that necessary to recover costs of manufacture, research, development,
and handling of the investigational drug.
Former Sec. 312.7(d)(4) provided that FDA could withdraw
authorization to charge if it determined that the conditions underlying
the authorization were no longer being met.
In the preamble to the proposed rule, we identified three principal
reasons for revising the previous charging regulation (the 1987
charging rule) (52 FR 19466, May 22, 1987).
First, the provisions of the 1987 charging rule concerning charging
for investigational drugs in a clinical trial needed to be revised to
take into account circumstances that were not anticipated when that
original rule was adopted in 1987. FDA expected that requests to charge
in a clinical trial would be limited to requests to charge for the
sponsor's drug being tested in the trial. In fact, the agency received
few such requests.
Far more common have been requests to charge for approved drugs in
trials when the drugs needed to be obtained from another entity. These
approved drugs may have been used in a trial of the sponsor's drug as
an active control or in combination with the sponsor's drug. Even more
common were requests to charge for approved drugs used in trials by a
third party (not the holder of the approved application) that were
intended to study new uses of the approved drug or to compare two
drugs. FDA concluded that requests to charge for investigational drugs
in these
[[Page 40873]]
situations may be appropriate, but that the criteria for evaluation of
such requests are different from those that apply when the request to
charge is for the sponsor's own drug being tested in a clinical trial.
Accordingly, the agency concluded that the 1987 charging rule needed to
be revised to provide criteria for charging for approved drugs used in
clinical trials.
Second, the provisions of the 1987 charging rule related to
treatment use allowed charging patients for investigational drugs only
when those drugs were provided under a treatment IND or treatment
protocol. Elsewhere in this issue of the Federal Register, FDA is
publishing a final rule that adds to part 312 (21 CFR part 312) a new
subpart I concerning ``Expanded Access to Investigational Drugs for
Treatment Use'' (referred to in this document as the ``expanded access
final rule'' or ``subpart I''). The expanded access final rule retains
the treatment IND and treatment protocol provisions in the 1987
charging rule with minor modifications, and provides for two additional
types of expanded access for treatment use: Expanded access for
individual patients and expanded access for intermediate-size patient
populations. The 1987 charging rule needed to be revised to provide
authority to charge for investigational drugs for these two new
categories of expanded access.
Third, the 1987 charging rule needed to be revised to specify the
types of costs that can be recovered. The language of the 1987 charging
rule was not very specific and did not provide sufficient guidance to
sponsors on the costs that could be recovered. Moreover, because of the
justifications for charging in a clinical trial differ from the
justifications for charging for expanded access use, the agency
believed that the costs appropriate for recovery would also differ.
The reasons FDA believed the 1987 charging rule needed to be
revised are described more fully in the sections II.B, C, and D of the
preamble to the proposed rule (71 FR 75168 at 75170 through 75171).
Accordingly, we proposed to remove paragraph (d) of former Sec.
312.7 (paragraph (d) discussed charging for and commercialization of
investigational drugs). We proposed to add new Sec. 312.8 containing
the following:
General requirements for charging for investigational
drugs,
Specific requirements pertaining to charging for
investigational drugs in a clinical trial,
Requirements for charging for investigational drugs for
treatment use under proposed subpart I (described in the proposed rule
on expanded access to investigational drugs for treatment use (expanded
access proposed rule) (71 FR 75147, December 14, 2006)), and
Requirements for determining what costs can be recovered
when charging for an investigational drug.
We received 40 comments on the charging proposed rule, which we
address in section III of this document.
II. Overview of the Final Rule, Including Changes to the Proposed Rule
The final rule revises the charging regulation at Sec. 312.7(d)
and adds new Sec. 312.8 to clarify the circumstances in which charging
for an investigational drug in a clinical trial is appropriate, to set
forth criteria for charging for an investigational drug for the
different categories of expanded access for treatment use described in
the expanded access final rule, and to clarify what costs can be
recovered for an investigational drug. This final rule specifies the
types of investigational uses of a drug in a clinical trial under part
312 that require prior authorization to charge and provides criteria to
authorize charging for each of the uses described in the expanded
access final rule.
A. General Requirements for Charging
New Sec. 312.8(a) describes the general requirements and
conditions for charging for investigational new drugs. Except for
sponsors charging for a drug obtained from another entity (as described
below), a sponsor who wishes to charge for an investigational drug must
do the following:
Comply with the applicable requirements for the type of
use for which charging is requested (either in a clinical trial or for
expanded access) (Sec. 312.8(a)(1)),
Provide justification that the amount to be charged
reflects only those costs that are permitted to be recovered (Sec.
312.8(a)(2)), and
Obtain prior written authorization from FDA (Sec.
312.8(a)(3)).
Section 312.8(a)(4) provides that FDA will withdraw authorization
to charge if it determines that charging is interfering with the
development of a drug for marketing approval or that the criteria for
the authorization are no longer being met.
In response to comments, the final rule does not require sponsors
who must obtain an approved drug from another entity for use in a
clinical trial to obtain FDA approval to charge for the drug or be
otherwise subject to the requirements in new Sec. 312.8.
B. Charging in Clinical Trials
Section 312.8(b) of the final rule describes specific requirements
pertaining to charging for an investigational drug in a clinical trial,
including investigational use of the sponsor's approved drug. The cost
of an investigational drug used in a clinical trial is an anticipated
cost of drug development and should ordinarily be borne by the sponsor.
Therefore, FDA believes that charging should be permitted only when
three circumstances are present, as described in Sec. 312.8(b)(1) and
as follows:
First, charging should be allowed only to facilitate development of
a promising new drug or indication that might not otherwise be
developed, or to obtain important safety information that might not
otherwise be obtained. The preamble to the 1987 charging rule made
clear that there should be compelling justification for taking the
unusual step of allowing charging for unproven therapy during its
development, stating that ``cost recovery is justified in clinical
trials only when necessary to further the study and development of
promising drugs that might otherwise be lost to the medical
armamentarium.'' (52 FR 19466 at 19472). FDA believes that philosophy
should continue to apply to charging in a clinical trial in this final
rule. Accordingly, Sec. 312.8(b)(1)(i) requires that a sponsor wishing
to charge for its investigational drug in a clinical trial provide some
evidence of potential clinical benefit that, if demonstrated in
clinical investigations, would provide a significant advantage over
available products in the diagnosis, treatment, mitigation, or
prevention of a disease or condition. Products that are likely to meet
this criterion are also likely to be eligible for fast track
development programs and priority review (see FDA's guidance for
industry on ``Fast Track Drug Development Programs--Designation,
Development, and Application Review'' (January 2006), including the
priority review policies for the Centers for Drug Evaluation and
Research and Biologics Evaluation and Research in Appendix 3 of that
guidance (available on the Internet at http://www.fda.gov/cder/guidance/index.htm)).
Second, charging should be permitted only for a trial that is
necessary for the development of the drug. Therefore, Sec.
312.8(b)(1)(ii) requires that the sponsor demonstrate that the data to
be obtained from the clinical trial would be essential to establishing
that the drug is effective
[[Page 40874]]
or safe for the purpose of obtaining initial marketing approval of the
drug, or that it would support a significant change in the labeling of
the sponsor's approved drug. For example, the trial could be designed
to provide data that would support approval of a new indication or
generate important comparative safety information.
Third, charging must be necessary to the conduct of the clinical
trial. Under Sec. 312.8(b)(1)(iii), a sponsor is required to
demonstrate that clinical development of the drug could not be
continued without charging because the cost of the drug is
extraordinary. The cost of the drug may be extraordinary because of
manufacturing complexity, scarcity of a natural resource, the large
quantity of drug needed (e.g., due to the size or duration of the
trial) or some combination of these or other circumstances. In response
to comments, this extraordinary cost criterion for charging for the
sponsor's drug in a clinical trial has been revised to clarify that the
resources of an individual sponsor are considered in determining
whether cost is extraordinary.
Section 312.8(b)(2) provides that the authorization to charge for a
drug in a clinical trial would ordinarily continue for the duration of
the clinical trial because it is unlikely that the need for charging
would change during the course of the trial. However, Sec. 312.8(b)(2)
gives FDA the discretion to specify a duration shorter than the length
of the trial. FDA may specify a shorter duration if, for example, there
is a particular concern that the authorization to charge has the
potential to delay the development of a drug for marketing approval.
C. Charging for Expanded Access to Investigational Drugs for Treatment
Use
Section 312.8(c) sets forth the criteria for charging for the three
types of expanded access to investigational drugs for treatment use
described in subpart I of part 312 (the expanded access final rule).
Part 312, subpart I describes two types of treatment use (expanded
access for individual patients and expanded access for intermediate-
size patient populations) not previously described in FDA's regulations
and, therefore, not specifically contemplated by the 1987 charging
rule. FDA's goal in permitting charging for the treatment uses
described in subpart I is to facilitate access to investigational drugs
in situations in which a sponsor might not be able to provide a drug
for such use absent charging, or to facilitate broader access to an
investigational drug for treatment use than would be possible absent
charging.
The agency's principal concern with charging patients in expanded
access settings for investigational drugs is that charging not
interfere with the development of drugs for commercial marketing.
Accordingly, Sec. 312.8(c)(1) requires a sponsor wishing to charge for
an investigational drug for any of the three types of expanded access
under part 312, subpart I to provide reasonable assurance that charging
will not interfere with developing the drug for marketing approval.
For the types of expanded access to investigational drugs described
in proposed subpart I, FDA believes it is less likely that the limited
numbers of patients who might obtain individual patient expanded access
to an investigational drug (Sec. 312.310) or intermediate-size patient
population expanded access (Sec. 312.315) would impede development of
a drug or indication. The potential to interfere with drug development
is greatest for treatment use under a treatment IND or treatment
protocol (Sec. 312.320). Treatment INDs or treatment protocols can
attract large numbers of patients and thus have the potential to
significantly affect enrollment in the clinical trials needed to
establish safety and effectiveness. Accordingly, Sec. 312.8(c)(2) sets
forth specific information that would be required to reasonably assure
FDA that charging for an investigational drug under a treatment IND or
treatment protocol will not interfere with drug development. Sponsors
are required to provide evidence of sufficient enrollment in any
ongoing clinical trials needed for marketing approval to reasonably
assure FDA that the trials will be completed as planned (Sec.
312.8(c)(2)(i)). Sponsors are also required to provide evidence of
adequate progress in the development of the drug for marketing approval
(Sec. 312.8(c)(2)(ii)). Such evidence could include successful
meetings with FDA before submission of a new drug application (NDA),
submission of an NDA, or completion of other significant drug
development milestones. Sponsors are also required to submit
information under their general investigational plans (Sec.
312.23(a)(3)(iv)) specifying the drug development milestones they plan
to meet in the coming year (Sec. 312.8(c)(2)(iii)).
Section 312.8(c)(3) specifies that the authorization to charge be
limited to the number of patients authorized to receive the drug for
treatment use, if there is a limitation. For example, the authorization
to charge for an investigational drug under an individual patient
expanded access submission is limited to a single patient. Similarly,
the authorization to charge under an intermediate-size patient
population expanded access submission is limited to the number of
patients permitted to receive the drug under that particular
intermediate-size patient population expanded access IND or protocol.
Section 312.8(c)(4) provides that FDA will ordinarily authorize
charging for expanded access for treatment use under part 312, subpart
I to continue for 1 year from the time of FDA authorization and that
FDA may reauthorize charging for additional periods upon request. It
also provides FDA the discretion to specify a shorter authorization.
The final rule limits the authorization to charge to a period of 1 year
or less to permit the agency to periodically assess whether the
criteria for charging continue to be met. FDA anticipates that it will
exercise its discretion to specify a shorter duration when there is a
particular concern that charging could interfere with drug development.
D. Recoverable Costs
Section 312.8(d) describes the kinds of costs that are recoverable
when charging for an investigational drug in a clinical trial and for
expanded access for treatment use under part 312, subpart I. The
purpose of permitting charging for an investigational drug in a
clinical trial is to permit a sponsor to recover the costs of making a
drug available to study subjects when those costs are extraordinary.
Thus, Sec. 312.8(d)(1) limits cost recovery to the direct costs of
making the investigational drug available in these situations. Indirect
costs can not be recovered.
Section 312.8(d)(1)(i) describes direct costs as costs incurred by
a sponsor that can be specifically and exclusively attributed to
providing the drug for the investigational use for which FDA has
authorized cost recovery. Direct costs include costs per unit to
manufacture the drug (e.g., raw materials, labor, and nonreusable
supplies and equipment used to manufacture the quantity of drug needed
for the use for which charging is authorized) or costs to acquire the
drug from another manufacturing source, and direct costs to ship and
handle (e.g., store) the drug.
Indirect costs are costs that are not attributable solely to making
the drug available for the investigational use for which charging is
requested (for example, expenditures for physical plant and equipment
that are incurred primarily for the purpose of producing large
quantities of the drug for commercial sale after approval, or for
[[Page 40875]]
making the drug available for a variety of investigational uses).
Indirect costs are not appropriate for cost recovery for
investigational uses because these costs would be incurred even if the
clinical trial or expanded access use for which charging is authorized
did not occur. Section Sec. 312.8(d)(1)(ii) states that indirect costs
include costs incurred primarily to produce the drug for commercial
sale (e.g., costs for facilities and equipment used to manufacture the
supply of investigational drug, but that are primarily intended to
produce large quantities of the drug for eventual commercial sale) and
research and development, administrative, labor, or other costs that
would be incurred even if the clinical trial or treatment use for which
charging is authorized did not occur.
Sponsors who provide investigational drugs for expanded access for
treatment use for intermediate-size patient populations and for
treatment INDs and treatment protocols incur costs in addition to the
anticipated and ordinary costs of drug development. The purpose of
permitting cost recovery for expanded access use is to encourage
sponsors to make investigational drugs available for treatment use.
Thus, Sec. 312.8(d)(2) permits a sponsor to recover the costs of
administering treatment use programs for intermediate-size patient
populations and for treatment INDs and treatment protocols, as well as
the direct costs of the drug. The final rule does not authorize
sponsors to recover administrative costs associated with expanded
access for individual patients because these costs would be so minor.
Section 312.8(d)(2) provides that in addition to the direct costs of
the drug described in Sec. 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
Sec. Sec. 312.315 and 312.320.
Section 312.8(d)(3) provides that, to support its calculation for
cost recovery, a sponsor must provide supporting documentation to show
that the cost calculation is consistent with the relevant requirements
in Sec. 312.8(d). The proposed rule has been revised to state that the
documentation must be accompanied by a statement that a certified
public accountant has reviewed and approved the calculations.
III. Comments on the Proposed Rule
A. Overview of Comments
The agency received 40 comments on the proposed rule. Comments were
received from individuals (persons with serious diseases,\1\ persons
with family members with serious diseases, and other interested
persons), health care and consumer advocacy organizations,
pharmaceutical and biotechnology companies, health insurance companies,
trade organizations, a State government, an academic medical center,
and a venture capital company.
---------------------------------------------------------------------------
\1\ Unless otherwise indicated, ``serious diseases'' in this
final rule refers to serious or immediately life-threatening
diseases or conditions.
---------------------------------------------------------------------------
Some comments from individuals were supportive of the charging
regulation to the extent that it may make it easier to develop drugs
for serious diseases in some cases and make investigational drugs more
broadly available for treatment use under expanded access programs.
Other comments from individuals were concerned that charging, in the
absence of reimbursement for investigational drugs by health insurance
companies, would limit enrollment in clinical trials and expanded
access programs to those who can afford to pay for the drug.
Health care and consumer advocacy organizations were generally
supportive of the proposed rule. Some stated that the rule struck the
appropriate balance between facilitating development of costly
therapies, including drugs for rare diseases, and increasing access to
investigational drugs for treatment use. One advocacy organization
expressed concern about the effects of charging on equitable access
across different economic strata, arguing that the ability to enroll in
clinical trials and expanded access programs may be restricted to
wealthier individuals. One organization was skeptical of the agency's
assertion that facilitating charging for investigational drugs made
available under expanded access programs would increase access.
FDA believes this final rule will facilitate development of some
costly therapies that might not have been developed absent cost
recovery and will encourage expanded access programs. FDA also
acknowledges, however, that the rule has the potential to create
certain inequities. Issues related to equitable access are discussed in
greater detail in responses to comments 36 through 39.
The major concerns of pharmaceutical and biotechnology companies
and their trade organizations were the requirements pertaining to
charging for approved drugs being evaluated in a clinical trial under
an IND. These companies were most concerned with the requirements
pertaining to charging for approved drugs that must be obtained from
another entity for use in a trial. An academic medical center was very
supportive of FDA's efforts to clarify the charging requirements
pertaining to approved drugs used in a trial under an IND. As discussed
in greater detail in responses to comments 27 and 31, FDA has revised
the proposed rule so that sponsors need not obtain authorization from
FDA to charge for approved drugs obtained from another entity not
affiliated with the sponsor.
The primary concern of health insurance companies and their trade
organization was that the new charging regulation may create pressure
on third-party payers to reimburse, or lead to legislation requiring
them to reimburse, for investigational drugs. Reimbursement issues are
discussed in greater detail in comments 63 through 65.
A major concern for a small biotechnology company, a venture
capital firm, and a State health agency was the narrowing of the cost
recovery provision in the proposed rule to permit recovery of direct
costs only for an investigational drug used in a clinical trial, and to
specifically exclude recovery of substantial capital expenditures
incurred for purposes of large-scale manufacturing and general research
and development costs. These comments were concerned that this
narrowing would make it more difficult for entities with limited
resources to develop expensive new therapies. FDA continues to believe
that these expenditures are not appropriate for cost recovery during
the development of a new drug. These concerns are discussed in greater
detail in responses to comments 1 and 46.
B. General Comments
(Comment 1) Two comments stated that charging for investigational
drugs to treat rare diseases or conditions (orphan drugs) should be
subject to less stringent criteria than charging for drugs to treat
non-orphan diseases. The comments maintained that drugs to treat orphan
diseases are commonly developed by small companies or not-for-profit
entities that have limited or no ability to raise money from capital
markets. Therefore, less restrictive charging criteria are needed to
permit these entities to recover their development costs.
(Response) FDA does not believe there is justification for
different and less stringent cost recovery criteria for investigational
drugs for orphan diseases than non-orphan diseases. As stated in the
preamble to the proposed rule, FDA does not believe that charging
[[Page 40876]]
for an investigational drug in clinical studies intended to support
approval of the drug is the appropriate mechanism to recoup research
and development costs beyond those costs directly associated with
making the drug available under criteria described in this charging
rule (71 FR 75168 at 75171) (see response to comment 46 for further
discussion). FDA believes sponsors intending to develop orphan products
should pursue orphan product designation from FDA to assist with
development and recovery of investment (21 CFR part 316). Such
designation provides for tax credits for the costs of clinical research
associated with development of an orphan drug and 7 years of marketing
exclusivity after an orphan drug is approved. In addition, sponsors
that obtain orphan designation may be eligible to receive grants from
FDA of up to $350,000 per year for 4 years to defray directly the costs
of clinical research (for more information, see Office of Orphan
Products Development, http://www.fda.gov/orphan/index.htm). Moreover,
orphan designation and grant funds from FDA often provide incentives
for additional investment from other sources. This final rule is
intended only to address the situation in which the cost of the drug
itself is so high that a sponsor needs to recover costs associated with
making the drug available to be able to conduct or continue the trial.
(Comment 2) One comment mentioned that it is not clear if the rule
applies to both unapproved drugs and approved drugs under investigation
for new indications.
(Response) The rule applies to both unapproved drugs and, in
certain situations, approved drugs under investigation for new
indications (see also response to comment 4).
(Comment 3) One comment suggested that to improve the readability
of the proposed rule, the rule should have different provisions for
company-sponsored expanded access programs than for investigator-
sponsored expanded access programs. The comment also suggested that
there should be different provisions for new molecular entities than
for approved products being studied for new indications.
(Response) FDA does not believe there is a need for separate
provisions for expanded access depending on whether the sponsor of the
IND is a manufacturer or a noncommercial sponsor such as an individual
physician. In either case, FDA's primary concern is whether the IND
would somehow interfere with drug development, so the criteria would be
the same for both groups. We also do not believe that separate
provisions are needed regarding the amount charged because, in both
cases, the amount charged would be limited to costs.
Based on changes made to the proposed rule, FDA also does not
believe there is any need to divide the rule into requirements
applicable to charging for new molecular entities and requirements
applicable to charging for approved drugs under investigation for new
uses. FDA has revised the proposed rule to eliminate the requirement
that a sponsor who obtains an approved drug from another source to use
in a trial as an active control or in a trial intended to obtain
additional information about the approved drug (e.g., to study a new
indication, to study a safety endpoint) must obtain prior authorization
to charge for the approved drug when used for an investigational
purpose (see comments 27 and 31). FDA has retained the requirement that
a sponsor obtain permission to charge for its own approved drug in a
trial of that drug. In this scenario, FDA believes the same criteria as
would apply to charging for an unapproved drug should apply. Therefore,
a separate provision is not needed.
(Comment 4) One comment stated that the proposed rule's
restrictions on charging should not apply to approved drugs and that
investigators and others charging for approved drugs should be
permitted to charge their usual amounts and to receive the customary
insurance reimbursement. The comment also noted that restricting
charges for approved drugs in clinical trials would be administratively
burdensome to investigators.
(Response) FDA agrees in part and disagrees in part. FDA agrees
that a sponsor that is not the marketer of an approved drug (i.e., is
not the entity that holds the approved application) should not be
required to obtain FDA approval to charge for the drug when it is used
in a clinical trial for any purpose--e.g., used for its approved
indication as an active control or in a trial of a new indication for
the drug (see comments 27 and 31 discussing in greater detail the
revision to the final rule to accommodate this change). Accordingly,
the provisions in the proposed rule requiring prior authorization to
charge in these situations have been deleted from this final rule.
However, FDA believes a sponsor seeking to charge for its own approved
drug in a trial of a new use or to obtain important safety information
about the drug should be treated differently. In these situations, the
sponsor is ordinarily conducting the trial to enhance or preserve the
commercial value of the drug. Therefore, as is the case with a request
to charge for a new molecular entity, the sponsor should be required to
overcome the presumption that the cost of the drug is a normal cost of
the business of drug development, a cost that should ordinarily be
borne by the sponsor of the trial. Therefore, FDA believes the sponsor
should be required to obtain prior authorization to charge and should
meet the same burden for charging for the approved drug in a clinical
trial as it would be required to meet for charging for a new molecular
entity. That is, the requirements in Sec. 312.8(b)(1) apply with equal
force to charging for the sponsor's unapproved drug and charging for
the sponsor's approved drug in a trial of a new use or a trial that
could otherwise result in an important labeling change. It is beyond
the scope of the regulation and FDA's authority to regulate insurance
reimbursement with respect to clinical trials involving approved drugs.
C. General Criteria for Charging
Proposed Sec. 312.8(a) set forth the general requirements and
conditions for charging for investigational drugs. A sponsor that
wishes to charge for an investigational drug must:
Comply with the applicable requirements for the type of
use for which charging is requested (either in a clinical trial or for
expanded access) (proposed Sec. 312.8(a)(1)),
Provide justification that the amount to be charged
reflects only those costs that are permitted to be recovered (proposed
Sec. 312.8(a)(2)), and
Obtain prior written authorization from FDA (proposed
Sec. 312.8(a)(3)).
1. Justification for the Amount To Be Charged
(Comment 5) One comment asked that the following language be added
at the end of Sec. 312.8(a)(2) and (c)(1) of the proposed rule: ``Any
such charges found to be recoverable costs as determined under [Sec.
312.8(d)] shall be minimized and/or terminated to the greatest degree
or at the earliest opportunity possible consistent with the criteria in
this rule. If circumstances supporting charging under this rule are no
longer met, charging shall terminate.''
(Response) FDA does not believe it is necessary to insert
additional language concerning how long and how much to charge because
the language essentially repeats the requirements that are already in
other parts of the rule. Section 312.8(b)(2) and (c)(4) of the final
rule specify how long it is permissible to charge in a clinical trial
and for an
[[Page 40877]]
expanded access use, respectively. Section 312.8(a)(4) permits FDA to
withdraw the authorization to charge at any time if it determines that
charging is interfering with the development of a drug for marketing
approval or that the criteria for the authorization are otherwise no
longer being met. Section 312.8(d) specifies what costs can be
recovered during whatever time period charging is authorized.
2. Prior Written Authorization to Charge
The requirement in the proposed rule to obtain prior written
authorization from FDA to charge for any investigational drug is a
change from the requirements under the 1987 charging rule. Under the
1987 charging rule, a sponsor was required to obtain prior written
authorization to charge for an investigational drug in a clinical trial
(Sec. 312.7(d)(1)), but a sponsor of a treatment IND or a treatment
protocol under Sec. 312.34 was permitted to commence charging 30 days
after receipt by FDA of an information amendment concerning charging,
unless FDA notified the sponsor to the contrary (Sec. 312.7(d)(2)).
(Comment 6) One comment requested that FDA retain the provision in
the 1987 charging rule (Sec. 312.7(d)(2)) that allowed authorization
to charge for an investigational drug under a treatment IND or
treatment protocol to go into effect automatically 30 days after
receipt by FDA of the information amendment, unless the sponsor is
notified to the contrary by FDA (Sec. 312.7(d)(2)), and further, that
FDA make this provision applicable to all expanded access uses. The
comment argued that the requirement for prior authorization would
result in delay in the availability of investigational drugs for
expanded access uses. One comment requested that FDA add the following
language after the provision requiring prior written authorization to
charge for an investigational drug: ``Such authorization shall not be
unreasonably withheld.'' Two comments agreed with FDA's decision to
require prior written authorization from FDA to charge for drugs
obtained through expanded access programs.
(Response) FDA does not agree that charging for expanded access
uses should be permitted without prior written authorization to charge
from FDA. FDA believes it is important to determine, in advance of any
patient being charged, that the criteria for charging are met (in
particular, the requirement that charging not interfere with drug
development) and that the amount to be charged is consistent with the
cost recovery requirements.
FDA also does not believe that this provision will delay access to
investigational therapies by patients with serious diseases who lack
therapeutic alternatives. When there is a pressing need for cost
recovery to make an investigational therapy available, FDA will
ordinarily be able to expedite review of a charging request. For a new
IND, FDA anticipates that, in most cases, it will be able to make a
charging determination at the same time it makes a determination on the
underlying expanded access IND. When the need to charge becomes evident
after an expanded access IND is ongoing, FDA anticipates that a sponsor
would be able to foresee the need to charge sufficiently far in advance
of that need to be able to make a charging submission and obtain a
timely FDA determination.
FDA also does not believe it is necessary to specify that the
authorization to charge ``shall not be unreasonably withheld.'' The
Administrative Procedure Act provides that an agency decision may be
set aside by the courts if found to be ``arbitrary, capricious an abuse
of discretion, or otherwise not in accordance with law'' (5 U.S.C.
706(2)(A)). The agency believes this language provides the appropriate
standard for FDA's decision of whether to allow charging for an
investigational drug.
3. Withdrawal of Authorization to Charge
Proposed Sec. 312.8(a)(4) specified that FDA will withdraw the
authorization to charge if it determines that charging is interfering
with the development of a drug for marketing approval or that the
criteria for the authorization are otherwise no longer being met.
(Comment 7) One comment recommended that the rule include an
additional requirement specifying that FDA notify the sponsor of a
proposal to withdraw authorization to charge and that FDA provide the
sponsor an opportunity to respond.
(Response) FDA expects in most cases to provide reasonable notice
before withdrawing an authorization to charge to allow sponsors an
opportunity to address the agency's concerns. We are not amending the
proposed rule as requested, however, because the agency believes we
should have the flexibility, when warranted, to withdraw an
authorization to charge without providing advance notice to the
sponsor. Sponsors can request review of FDA's withdrawal of an
authorization to charge using dispute resolution processes.
4. Lack of Timeframe for FDA Response
(Comment 8) Two comments recommended that the final rule include a
general timeframe for FDA to decide whether to permit charging. One of
the comments recommended that FDA decide all charging requests within
30 to 60 days.
(Response) FDA does not believe it should commit to a specified
time period for review that would apply to all charging requests. In
many cases, FDA anticipates being able to make a determination on a
request to charge at the same time it responds to the underlying IND
submission (when the submissions are made at the same time). However,
in FDA's experience, charging requests can present challenging issues
that require some discussion between FDA and the sponsor. Thus, it is
difficult to estimate reliably a time period for making a charging
request determination that would apply uniformly to all charging
requests. For this reason, FDA is not prepared to commit to a 30-day
timeframe for making charging request determinations. FDA also does not
foresee the need for a 60-day maximum review time.
D. Charging in a Clinical Trial
Proposed Sec. 312.8(b) described specific requirements pertaining
to charging for an investigational drug in a clinical trial. This
provision described criteria for charging for an investigational drug
in three situations:
Charging for the sponsor's own drug in a clinical trial
(Sec. 312.8(b)(1)),
Charging for an approved drug that a sponsor must obtain
from another entity for use as an active control or in combination with
another drug in a clinical trial designed to evaluate the safety and
effectiveness of the sponsor's investigational drug (Sec.
312.8(b)(2)), and
Charging for an approved drug that must be obtained from
another entity in a clinical trial designed to evaluate the approved
drug (e.g., for another indication) (Sec. 312.8(b)(3)).
1. General Comments
(Comment 9) Several comments stated that permitting charging for
the investigational drug in clinical trials would make it even more
difficult to enroll subjects into clinical trials and, therefore, could
increase the time to complete trials and delay bringing new drugs to
market. Three comments stated that charging could discourage enrollment
by patients who lack the resources to pay for the investigational drug.
One comment stated that charging for nonreimbursed, investigational
[[Page 40878]]
therapies could discourage physicians from recommending enrollment in
trials to their patients who are eligible.
(Response) As was the case with the prior charging rule, the
provisions concerning charging for the sponsor's investigational drug
in this final rule are intended to help sponsors develop important new
therapies that would be very difficult or impossible to develop absent
charging. In FDA's experience, sponsors have rarely found it necessary
to charge for such therapies in clinical trials to develop a drug for
marketing approval. FDA anticipates that charging for the sponsor's
drug in a clinical trial will continue to be an unusual circumstance.
FDA recognizes that charging could make it difficult to enroll subjects
in clinical trials and may have a disproportionate impact on enrollment
of patients who cannot afford to pay for the investigational drug. FDA
expects, however, that sponsors will monitor clinical trial accrual
rates and take whatever steps are necessary to ensure that subjects are
able to enroll. For example, in FDA's experience, sponsors who have
charged for an investigational drug in a clinical trial have made
provision to enroll subjects unable to pay.
(Comment 10) Two comments stated that the financial burden for
conducting clinical trials, including supplying the investigational
drug, should be carried by the sponsors, who stand to benefit from the
drug if commercialized.
(Response) FDA agrees that, in most circumstances, sponsors should
bear the costs of making an investigational drug available in a
clinical trial. The preamble to the proposed rule stated: ``Generally,
the costs of conducting a clinical trial are costs that the sponsor
should bear. Conducting a clinical trial is part of the drug
development process, and drug development is an ordinary business
expense for a commercial sponsor'' (71 FR 75168 at 75170). The preamble
to the proposed rule also clarified that the philosophy underlying the
1987 charging rule--that charging for an investigational drug in a
clinical trial should be an exceptional circumstance and justified only
when necessary to further the study of a promising drug that might
otherwise not be developed--was intended to apply to this charging rule
(71 FR 75168 at 75170).
(Comment 11) One comment stated that FDA should include in the
codified portion of the rule the language from the preamble of the 1987
charging rule that: ``FDA * * * [presumes] that supplying
investigational drugs to subjects participating in clinical trials
without charge is part of the normal cost of doing business.''
(Response) FDA does not believe it is necessary to include the
suggested language in this final rule. The preamble to the proposed
rule contained language similar to the language in the preamble to the
1987 charging rule, stating that: ``Generally, the costs of conducting
a clinical trial are costs that the sponsor should bear. Conducting a
clinical trial is part of the drug development process, and drug
development is an ordinary business expense for a commercial sponsor''
(71 FR 75168 at 75170). Thus it is clear that FDA intends that the
presumption that the cost of an investigational drug should ordinarily
be borne by the sponsor and charging is justified only in exceptional
circumstances be carried forward to this rule. That presumption is
implicit in the stringent criteria in Sec. 312.8(b)(1) for allowing
charging for a sponsor's drug in a clinical trial. FDA does not believe
it is necessary to state the presumption in the codified language.
(Comment 12) One comment stated that FDA should consider working
with pharmaceutical firms to develop better ways of funding clinical
trials of investigational drugs. The comment recommended that FDA
evaluate practical ways the pharmaceutical industry can fund patient
expenses for investigational drugs used in clinical studies and that
one option would be for FDA to evaluate the viability of establishing a
common patient pool funded by pharmaceutical firms on a voluntary or
required basis.
(Response) The agency believes that the comment raises a valid
concern. This charging rule is intended to allow a sponsor to recover
its costs associated with making an investigational drug available to
clinical trial subjects when the cost of the drug is so high that the
study could not be conducted without charging. The rule is not intended
to help defray other costs associated with the conduct of a trial.
However, in FDA's experience, the drug cost is usually not the largest
expense associated with clinical trials. Typically, the costs of
administering and monitoring a clinical trial are much greater than the
cost of the drug. At present, FDA is focusing its collaborative efforts
with industry on improving the efficiency of the clinical trial process
through various Critical Path programs (e.g., Clinical Trial
Transformation Initiative, http://www.fda.gov/oc/initiatives/criticalpath/clinicaltrials.html). FDA encourages efforts to develop
alternative mechanisms to finance important clinical research by
private sector interests or nonregulatory governmental bodies, but
believes such efforts would be best administered by private sector
interests or nonregulatory governmental bodies.
(Comment 13) One comment recommended that the title of the rule be
changed from ``Charging for Investigational Drugs'' to ``Charging for
Drugs Used in Clinical Trials'' because the rule also would permit
sponsors to charge for approved drugs, which, the comment asserts, are
not investigational.
(Response) FDA disagrees. The rule addresses charging for
investigational drugs both in clinical trials and in expanded access
programs under new subpart I. Because the recommended title would seem
to exclude expanded access uses, that title is too narrow. Moreover,
the use of an approved drug in a trial of a new use is an
investigational use and thus clearly covered by the rule and its title.
See response to comment 15 for discussion of a minor change to the
section's title.
(Comment 14) Two comments stated that permitting charging for an
investigational drug in a clinical trial--because it might exclude
economically disadvantaged persons from trial participation--could
exacerbate existing problems with underrepresentation of economically
disadvantaged and minorities in such trials, and thus may limit
generalizability of trial results.
(Response) FDA does not believe that inability to participate in a
clinical trial because a subject cannot pay for the drug will have a
meaningful effect on generalizability of trial results. Many factors
affect participation in clinical trials, including geographic location,
ability to qualify for the trial, demographic representation at trial
sites, and an insufficient number of slots for all who might like to
participate. The effects of charging on the nature of the trial
population would probably be of limited significance relative to other
factors that could affect generalizability. In addition, in FDA's
experience, sponsors that charge subjects for investigational drug in a
clinical trial typically make provision for subjects who are unable to
pay for the drug, thus mitigating any potential effect on
generalizability due to underrepresentation of individuals from lower
economic strata.
(Comment 15) Two comments recommended that the rule include a
provision stating that the rule does not apply to clinical trials that
are exempt from the requirement to have an IND.
(Response) FDA did not intend that the charging regulation apply to
clinical trials that are exempt from the IND requirements under Sec.
312.2(b). To make
[[Page 40879]]
this clearer, FDA has changed the title of Sec. 312.8 to ``Charging
for investigational drugs under an IND.''
(Comment 16) Two comments stated that permitting charging for
unapproved drugs in clinical trials has the potential to adversely
affect FDA resources.
(Response) As discussed in greater detail in section I of this
document, FDA believes it is important to provide an option to charge
for investigational drugs in certain circumstances and, also, that is
it is important for FDA to regulate charging to prevent
commercialization of unapproved drugs and unapproved indications. In
FDA's years of experience reviewing charging requests under the 1987
charging rule, such requests have been infrequent and the resources
required to conduct such reviews did not have a negative effect on
FDA's mission to ensure the safety and effectiveness of new drugs. The
proposed rule expanded the scope of INDs for which sponsors may seek
cost recovery to include the three types of expanded access INDs under
new subpart I. However, in response to comments, the final rule no
longer requires sponsors that must obtain an approved drug from another
entity to obtain FDA authorization to charge for that approved drug.
Thus, FDA anticipates only a modest increase in the number of requests
to charge due to this final rule.
In addition, the cost calculation was perhaps the most time-
consuming aspect of preparing and reviewing charging requests under the
1987 charging rule. This final rule clarifies and simplifies the scope
of recoverable costs. Thus, FDA anticipates that it will typically take
less time to prepare and review a charging submission under the new
rule than under the 1987 charging rule.
(Comment 17) One comment stated that the rule should differentiate
between different phases of testing of an unapproved drug because the
justification for allowing recovery and the supporting evidence will
vary for different clinical trials in different phases of drug
development.
(Response) FDA believes the criteria described in Sec. 312.8(b)(1)
concerning charging for a sponsor's drug provide sufficient flexibility
to evaluate requests to charge for a drug in clinical trials in
different phases of drug development (also see response to comment 19
discussing the variable basis for assessing whether a drug has a
potential clinical benefit that would be a significant advantage over
available products and response to comment 20 discussing when a
clinical trial would be considered essential to establishing that the
drug is effective and safe).
2. Charging for the Sponsor's Own Drug in a Clinical Trial
Proposed Sec. 312.8(b)(1) set forth three criteria, in addition to
the general criteria in Sec. 312.8(a), that needed to be met to permit
a sponsor to charge for its own investigational drug in a clinical
trial.
a. Significant advantage over available therapy. Section
312.8(b)(1)(i) of the proposed rule provided that a sponsor who wishes
to charge for its investigational drug, including investigational use
of its approved drug, must provide evidence that the drug has a
potential clinical benefit that, if demonstrated in the clinical
investigations, would provide a significant advantage over available
products in the diagnosis, treatment, mitigation, or prevention of a
disease or condition.
(Comment 18) One comment stated that this criterion is not
meaningful as it would apply to all drugs that are selected to be
developed by pharmaceutical and biotechnology companies.
(Response) FDA does not agree that all drugs selected to be
developed for marketing offer a potential significant advantage over
available therapy. Companies often deliberately develop drugs that
offer only modest advantages over existing therapy or appear to be
similar to existing therapy. There may be good commercial and clinical
reasons to pursue such development. For example, there is likely to be
variation in response to a pharmacologic intervention, both in desired
treatment effect and incidence of adverse effects, in different
individuals. Thus, the availability of similar therapies can provide
alternatives for those who have inadequate responses to a drug or
experience an adverse reaction even if a significant advantage has not
been clinically shown for any of the therapies. This criterion is
intended to distinguish those types of drugs from those for which there
are preliminary clinical data suggesting a significant advantage in the
therapy for a given disease and for which the development program is
geared toward establishing that advantage.
(Comment 19) One comment asked for clarification about the type and
degree of evidence needed to show a significant advantage, especially
at the beginning of large phase 3 trials. Another comment recommended
that this criterion concerning a significant advantage be replaced with
``evidence of potential advantage over available therapy.'' The comment
stated that the significant advantage standard would be likely to
prevent a sponsor from charging for its own drug because the standard
presumes that comparative studies have been conducted against all the
other products.
(Response) The amount and type of data needed to demonstrate a
potential clinical benefit that would be a significant advantage over
existing therapy will vary with the stage of development. For a request
to charge for a large phase 3 trial, ordinarily the clinical data
developed in phase 2 will need to confirm or be consistent with a
potential significant advantage to satisfy this criterion. For a
request to charge for a trial in an earlier phase of development, more
preliminary data consistent with a potential significant advantage will
suffice. FDA does not agree that comparative data will always be
necessary to demonstrate a potential significant advantage over
existing therapy. The agency believes that the need to provide
comparative data is a matter of judgment. For example, there may be
noncomparative phase 2 data and a plausible pharmacologic basis that
suggest a significant advantage over existing therapy, and the phase 3
trial for which charging is requested may be a comparative design
intended to demonstrate that advantage. Similarly, comparative data are
not needed if the drug is intended to treat a disease or subpopulation
with a disease, for which there is no satisfactory existing therapy
(see also FDA guidance for industry entitled ``Fast Track Development
Programs--Designation, Development, and Application Review'' (June
2006), especially section III.B.2, discussing demonstrating a drug's
potential at various stages of development).
FDA also does not agree that charging for an investigational drug
in a clinical trial should be permitted on the basis of only a
potential advantage over existing therapy, without regard to the
significance of the advantage. FDA continues to believe that, as was
articulated in the preamble to the proposed rule (71 FR 75168 at
75171), the cost of making a drug available to study subjects during
development should ordinarily be borne by the sponsor. Charging for
drugs in this situation should be reserved for the exceptional
circumstance in which it is necessary to continue development of a drug
that offers a potential significant advantage over existing therapy.
b. Essential to safety or effectiveness. Section 312.8(b)(1)(ii) of
the proposed rule provided that a sponsor that wishes to charge for its
investigational drug, including investigational use of its
[[Page 40880]]
approved drug, must demonstrate that the data to be obtained from the
clinical trial would be essential to establishing that the drug is safe
or effective for the purpose of obtaining initial approval of a drug,
or would support a significant change in the labeling of an approved
drug (e.g., new indication, inclusion of comparative safety
information).
(Comment 20) One comment stated that the criterion to show that
data obtained from the clinical trial are essential to show safety or
effectiveness or make a significant labeling change would make it
unreasonably difficult for a sponsor to obtain authorization to charge
because it would require a sponsor to show that all other trial
components of the development program have been identified and
marketing approval could not be obtained without completion of the
trial for which charging is requested. The comment recommended that,
instead, the criterion should be that the study is a phase 2 or 3
protocol that was not put on hold by FDA (Sec. 312.42) or the trial
was agreed to by FDA through the special protocol assessment process
(see FDA guidance for industry entitled ``Special Protocol Assessment''
(May 2002)). Another comment stated that this criterion is vague and
overly broad because, arguably, all clinical trials conducted in a drug
development program would be essential to show safety and
effectiveness.
(Response) FDA does not agree that this provision is too
restrictive. The phrase ``essential to establishing that the drug is
effective or safe for the purpose of obtaining initial approval of a
drug'' is intended to limit charging--whether in comparative trials,
trials of a new use of an approved drug, or other trials--to those
trials that will generate effectiveness or safety data on the endpoint
or endpoints intended to establish safety or effectiveness (e.g.,
clinical outcome on the disease of interest), trials that would provide
direct corroborative support for such trials, and trials that were
necessary prerequisites to the major safety and effectiveness trials
(e.g., essential to refining the study design). Such trials would
include later phase (e.g., phase 2 and 3) controlled clinical trials
evaluating the clinical endpoints that would establish safety and
effectiveness (e.g., trials designed to demonstrate the drug's the
potential clinical advantage), but could also include important
clinical pharmacology studies (e.g., thorough QT prolongation studies,
drug-drug interaction studies), safety studies, and other types of
studies that would provide essential corroboration for the data from
the major safety and effectiveness trials, or aid in the design of
those trials.
FDA does agree that its determination, pursuant to a special
protocol assessment, that a phase 3 study design and protocol are
adequate to provide effectiveness data that would support approval of a
marketing application would, in most cases, mean that the clinical
trial is essential to establishing that the drug is effective or safe
for the purpose of obtaining initial approval of the drug.
FDA does not agree that this provision is overly broad. FDA
acknowledges that the trials conducted as part of a clinical
development program typically build on one another. However, it is very
unlikely that all such trials would be considered essential because
they provide the data on the endpoints that establish safety and
effectiveness, essential corroboration for those data, or are essential
prerequisites to the major safety and effectiveness studies (e.g.,
because they enable the design to be refined so that the data will
support approval).
c. Extraordinary cost. Section 312.8(b)(1)(iii) of the proposed
rule provided that a sponsor that wishes to charge for its
investigational drug, including investigational use of its approved
drug, must demonstrate that the clinical trial could not be conducted
without charging because the cost of the drug is extraordinary. The
proposed rule stated that the cost may be extraordinary due to
manufacturing complexity, scarcity of a natural resource, the large
quantity of drug needed (e.g., due to the size or duration of the
trial), or some combination of these or other extraordinary
circumstances.
(Comment 21) Several comments had significant concerns about the
extraordinary cost criterion. Two comments maintained that this
provision is too vague and subjective for a regulatory requirement.
They argued that whether a cost is extraordinary depends to a certain
extent on the resources and perspective of the sponsor, i.e., what may
be an extraordinary cost for a small company with limited resources may
not be so for a larger company with more resources. One of these
comments requested additional guidance, either in the rule or in a
separate guidance document, on the meaning of extraordinary cost. Two
comments stated that this requirement is more stringent than the 1987
charging rule, which requires only that the sponsor provide a written
explanation for why charging is necessary for the sponsor to undertake
or continue the trial. These comments recommended that FDA delete the
extraordinary cost criterion and replace it with the requirement from
previous Sec. 312.7(d)(1) requiring a full written explanation of the
reasons charging is necessary for the sponsor to undertake or continue
the clinical trial or expanded access. One comment requested that FDA
clarify how extraordinary cost is to be determined for a large company
with numerous corporate affiliates, each with separate budgets.
(Response) In the proposed rule, FDA attempted to describe the
concept of extraordinary cost in a way that would make the
determination independent of the relative resources of a sponsor. FDA
perceived that this approach would be fairer than an approach based on
sponsor resources, arguably making cost recovery equally accessible to
all sponsors. FDA continues to believe that there are potential
scenarios in which a drug cost would be so great that it would be
considered extraordinary for any sponsor no matter how great a
sponsor's resources. And FDA believes that the parameters set forth in
the final rule--that the cost may be extraordinary due to manufacturing
complexity, scarcity of a natural resource, the large quantity of drug
needed (e.g., due to the size or duration of the trial), or some
combination of these or other extraordinary circumstances--provide a
functional objective test for whether a cost is extraordinary.
However, FDA also acknowledges that, as a practical matter, whether
a drug cost is extraordinary in any given case will often be a function
of the resources of a given sponsor. FDA believes that the rule should
reflect the reality that a sponsor seeking cost recovery for a drug
used in a clinical trial will more often be a sponsor with relatively
fewer resources compared to the larger, established pharmaceutical and
biotechnology companies. Accordingly, FDA has revised the extraordinary
cost criterion in Sec. 312.8(b)(1)(iii) to clarify that a sponsor can
demonstrate a cost is extraordinary relative to the resources available
to that sponsor. This revision is also responsive to the comments
suggesting that we retain the requirement in the previous regulation
that a sponsor provide a written explanation of why charging is
necessary to conduct the study. The sponsor would be able to provide
such an explanation to demonstrate that the cost is extraordinary for
that sponsor.
(Comment 22) One comment stated that extraordinary cost is not a
meaningful distinguishing criterion in the current environment as,
arguably, most new therapies have extraordinary costs.
[[Page 40881]]
(Response) FDA does not agree that the concept of extraordinary
drug cost is meaningless in the current environment. Extraordinary cost
in this rule does not refer to the amount that would eventually be
charged for a marketed drug in a commercial setting. Arguably, such
costs are often extraordinary compared to historical pricing.
Extraordinary cost in this rule refers only to the actual cost of the
drug product in the clinical trial. This rule is primarily intended to
provide cost recovery in clinical trials in cases in which the drug
product itself is expensive to provide because of difficulty in
manufacturing costs, scarcity of a natural resource needed to
manufacture the drug, the large quantity of clinical supply needed to
conduct studies, or other extraordinary circumstances, and therefore
represents a substantial added cost above and beyond the routine costs
associated with the conduct of the study.
(Comment 23) Two comments stated that FDA lacked the expertise to
decide whether the cost of a drug is extraordinary and would need to
review factual analyses about the sponsor's costs, comparative costs of
other treatments, and arguments about what costs are ordinary versus
extraordinary.
(Response) FDA does not believe that it will be difficult to
differentiate drugs that are truly extraordinarily costly by objective
measures from those that are not, or that such determinations will
require special expertise. FDA believes it has enough accumulated
experience with the vast array of drugs within its purview to have the
ability to make such determinations about the relative costs of various
drugs.
(Comment 24) Two comments expressed concerns with the requirement
in Sec. 312.8(b)(1)(iii) that a sponsor ``[d]emonstrate that the trial
could not be conducted without charging because the cost of the drug is
extraordinary'' (emphasis added). The comments stated that the more
appropriate inquiry is whether a sponsor would not conduct a trial
absent cost recovery because the cost is extraordinary, so, presumably,
it would not be in the sponsor's commercial interest to conduct the
trial. Similarly, another comment stated that companies may choose not
to develop a drug because it would not be lucrative, but that does not
mean the drug could not be developed.
(Response) The charging regulation is not intended to provide a
mechanism to subsidize drug development generally or to provide an
incentive to reconsider development of a drug that a sponsor has
elected not to develop because it was not predicted to be profitable
(e.g., would not generate enough revenue to recoup development costs
and provide a profit). The intent of the final rule is to address the
situation in which the very high, near-term cost of making the drug
available to subjects in a clinical trial is a deterrent to
development, not the drug's long-term, potential profitability.
Therefore, FDA believes that the appropriate inquiry is whether a trial
could not be conducted without charging because the cost of the drug is
extraordinary.
(Comment 25) One comment stated that the need to charge could be
for reasons other than extraordinarily high manufacturing costs. The
comment maintained that small biotechnology companies have difficulty
obtaining funding for clinical trials even when the product is
promising and the rule should recognize a sponsor's inability to obtain
funding as a reason for charging in a clinical trial.
(Response) As discussed in the preceding comment response, charging
for investigational drugs under this rule is not intended to provide
funding for clinical trials or drug development generally. The intent
is to address the situation in which there is a very high cost
associated with making a drug available to clinical trial subjects and
that drug cost prevents continued development unless the cost of the
drug can be recouped during development. Therefore general development
costs, such as costs associated with conducting and monitoring a
clinical trial, should not be incorporated in the amount charged for
the investigational drug and the lack of funding for such costs is not
an independent basis for permitting charging for the study drug (but
could be a factor in assessing whether the cost is extraordinary for a
given sponsor under Sec. 312.8(b)(1)(iii)).
FDA recognizes that in most drug development scenarios, the costs
associated with the conduct of clinical trials and drug development
generally are greater than the costs of the investigational drug
product, and the development costs may be a deterrent to continuing
development of a drug. However, FDA does not believe that incorporating
those costs into an amount charged for the investigational drug is the
appropriate mechanism to address that situation. If a sponsor wishes to
recover from trial subjects other costs associated with the conduct of
a clinical trial (e.g., the costs of medical care necessitated by
participation in a clinical trial), FDA believes that recovery should
occur independent of any charge for the drug product.
(Comment 26) One comment maintained that the extraordinary cost
requirement, when applied to charging for the sponsor's approved drug
in a trial evaluating a new use of that drug, would discourage
manufacturers from developing new uses for approved products.
(Response) FDA believes that the criteria for permitting charging
should be the same for charging for the sponsor's investigational drug
in trials to support initial marketing approval as for charging in
trials of a sponsor's approved drug for a new indication. In each, the
cost of the drug is a routine business expense that would ordinarily be
recouped after approval of the drug or new indication, and subjects are
being asked to pay for an unapproved product or unapproved use in a
setting in which charging for the drug is not the norm. The agency is
aware that there are many factors that a sponsor weighs in determining
whether to develop an approved drug for a new use. FDA does not believe
that limiting charging for the sponsor's approved drug in a clinical
trial to situations in which the cost of the drug is extraordinary
would, in most cases, be the deciding factor in a sponsor's decision to
develop or not develop a new indication.
3. Charging for an Approved Drug Obtained From Another Entity for Use
as an Active Control or in Combination With Another Drug
Proposed Sec. 312.8(b)(2) described the criteria for charging for
an approved drug obtained from another entity for use as an active
control or in combination with another drug. To charge in this
situation a sponsor must:
Demonstrate that the clinical trial is adequately designed
to evaluate the safety and effectiveness of the sponsor's drug and
Demonstrate that the holder of the approved application is
not providing the drug to the sponsor free of charge.
(Comment 27) Many comments expressed concerns with the provisions
in the proposed rule concerning charging for approved drugs obtained
from another entity for use as an active control or in combination with
another drug. Three comments stated that FDA approval should not be
required to charge for approved drugs when the drugs are used for their
approved or medically accepted indications and at approved or medically
accepted doses and dose regimens. One comment opined that the cost of
approved drugs used in a trial for medically accepted purposes is not a
drug development expense that should be borne by the sponsor. Two
comments stated that the
[[Page 40882]]
rule should not distinguish between an approved drug obtained from
another entity and an approved drug that is the sponsor's own drug and
charging should be permitted for both. Another comment noted that the
rationale that trial subjects should not be charged for exposing
themselves to the risks of an unproven drug does not apply to approved
drugs used for a medically accepted purpose. One comment stated that
pharmaceutical companies seldom charge patients for the cost of an
approved drug used in a clinical trial. Two comments stated that the
investigator commonly buys approved drugs and bills the patient's
health insurance or the investigator writes a prescription for the
patient, who fills the prescription at a pharmacy that bills the
patient's insurance.
Several comments also raised concerns that the charging regulation
might interfere with routine reimbursement by third-party payers for
approved drugs used for their approved indications in clinical trials.
Some comments stated that, when approved drugs used as comparators are
charged for in a clinical trial, they are ordinarily dispensed through
the normal distribution channel--either an inpatient or outpatient
pharmacy--and third-party payers routinely reimburse for such uses. One
comment asked FDA to clarify that the proposed rule does not apply to a
situation in which the sponsor is not involved in directly supplying
approved drugs used as comparators or in combination and does not incur
direct acquisition or handling costs that it then seeks to pass on to
trial subjects, such as when the drug is dispensed from a pharmacy.
One comment stated that requiring sponsors to seek authorization to
charge in cases in which the sponsor is not directly acquiring an
approved drug from another entity, such as cases in which the approved
drug is obtained or prescribed by investigators and subjects are billed
by the investigator or pharmacy, would dramatically alter existing
practice without benefiting trial subjects. The comment stated that a
large number of clinical studies would need to be submitted for FDA
review, dramatically increasing the administrative burden on FDA to
review charging requests for affected trials and on sponsors in making
submissions.
(Response) The agency agrees that requiring sponsors to obtain
authorization to charge for approved drugs obtained from another entity
for use as active controls or in combination with another drug, or for
other uses is not necessary. We recognize that one of the major
rationales for limiting charging--that the safety and effectiveness of
the drug is unproven--is often not present in this situation. Moreover,
FDA believes there would almost never be a basis to deny a request to
charge for an approved drug for use as active control or in combination
with another drug under the criteria in the proposed rule. FDA also
acknowledges the potential for significant administrative burdens
associated with complying with the proposed charging requirements if,
as the comments stated, the current practice in many cases is simply to
have the approved drug dispensed from a pharmacy and have patients or
third parties pay the usual cost for the drug. Moreover, FDA does not
want to impose a regulatory requirement that might somehow interfere
with the way in which drug costs are reimbursed by third-party payers.
Accordingly, in the final rule, FDA has revised proposed Sec. 312.8(a)
and deleted proposed Sec. 312.8(a)(2) and (a)(3), to clarify that a
sponsor need not obtain authorization to charge for an approved drug
used for an approved indication in a clinical trial done under an IND.
(Comment 28) Three comments stated that approved drugs used as
active controls or in combination with another drug are not
investigational because they are approved and are not being
``investigated'' in the clinical trial.
(Response) FDA disagrees. When an approved drug is used as an
active control or in combination with another drug (e.g., as standard
therapy in a study comparing standard therapy to standard therapy plus
a new investigational therapy), the treatment effect of the active
control or the standard therapy is being measured and compared to the
new therapy. Therefore, the approved drug is part of the clinical
investigation, and hence an investigational drug for purposes of part
312. Notwithstanding that such use is subject to part 312, FDA has
revised the proposed charging rule so that sponsors are no longer
required to obtain authorization to charge for approved drugs obtained
from another entity for use as active controls or in combination with
another therapy (as discussed in the preceding comment response).
(Comment 29) One comment argued that sponsors should be able to
charge for approved drugs without FDA authorization when used in
clinical trials for ``medically accepted'' uses, which the comment
defined as uses supported by a recognized compendium such as U.S.
Pharmacopeia Drug Information (USP DI).
(Response) As discussed in the responses to comments 27 and 31, FDA
has revised the proposed rule to remove the requirement that a sponsor
obtain prior approval to charge for an approved drug that the sponsor
must obtain from another source for use as an active control or in
combination with another drug, or in a trial evaluating the approved
drug for a new use or to obtain important safety information. However,
the final rule retains the requirement that a sponsor studying its own
approved drug for a new indication or to support another type of
significant labeling change must obtain approval to charge for the drug
in the study. FDA does not agree that whether the use of the drug is
``medically accepted'' by a recognized compendium should be a
distinguishing criterion for determining whether the sponsor should be
required to obtain authorization to charge for its drug in that
situation.
(Comment 30) One comment asked how a trial blind could be
maintained if there is charging for a competitor's product used as an
active control, but not for the sponsor's investigational drug.
(Response) We note that the final rule removes the requirement of
the proposed rule that sponsors seek FDA authorization to charge for a
competitor's product used as an active control. In general, FDA
believes that maintaining the trial blind is the responsibility of the
sponsor.
4. Charging for an Approved Drug Obtained From Another Entity in a
Clinical Trial of the Drug
Proposed Sec. 312.8(b)(3) provided that, for a sponsor to charge
for an approved drug obtained from another source in a clinical trial
to evaluate that drug, it must:
Demonstrate that the clinical trial is adequately designed
to evaluate the safety or effectiveness of a new indication or to
provide important safety information related to an approved indication
and
Demonstrate that the holder of the approved application is
not providing the drug to the sponsor free of charge.
(Comment 31) Two comments stated that the requirement that a
sponsor seeking to charge for an approved drug obtained from another
source must demonstrate that the trial design is adequate to evaluate
the effectiveness of the new indication is unnecessary because it
essentially duplicates what a sponsor is required to demonstrate to be
allowed to proceed with the trial under the IND review process. The
comments argue that the fact that FDA has not placed the trial on
clinical hold (Sec. 312.42) should be enough evidence that FDA
considers the trial of adequate
[[Page 40883]]
design. One comment stated that whether the drug is available without
charge does not require FDA review. One comment asked FDA to clarify
what constitutes sufficient evidence that the sponsor charging for a
drug has not received the drug free of charge. Another comment
suggested that additional criteria be added as a safeguard to ensure
that drug is not being made available free of charge, such as
representation by the sponsor that the manufacturer is not funding or
supporting the trial in any way.
(Response) FDA acknowledges that the proposed criteria for
obtaining authorization to charge for an approved drug that the sponsor
must obtain from another entity in a trial of a new use of that drug,
or to obtain important new safety information, do not present a
significant barrier to obtaining cost recovery. FDA intended to present
a relatively low barrier to encourage the kinds of trials that might
not be of commercial interest to the drug manufacturer or to otherwise
encourage trials that would further elucidate the characteristics of
approved drugs. FDA agrees that, for phase 2 and 3 trials, the fact
that the trial has not been placed on clinical hold would ordinarily be
sufficient to satisfy the criterion that the trial is adequately
designed to evaluate the unapproved drug for a new indication. FDA also
acknowledges that it intended to rely primarily on the representations
of the sponsor for assurance that the drug was not being made available
free of charge.
In light of these comments, FDA now recognizes that, based on the
criteria in the proposed rule, there would seldom be a basis to deny a
request to charge for an approved drug that a sponsor must obtain from
another source to study a new use or to obtain important new safety
information. FDA also recognizes that the cost recovery calculation for
this type of use would usually be very straightforward--ordinarily, the
sponsor's acquisition cost if the sponsor purchases the drug directly
or the cost of the drug when dispensed from a pharmacy. Therefore, FDA
concludes that to require submission of a request to charge for an
approved drug obtained from another source would often be a needless
administrative burden for the sponsor and FDA. Accordingly, we have
decided not to finalize proposed Sec. 312.8(b)(3) in this final rule.
(Comment 32) One comment stated that the ability to charge for an
investigational drug obtained from another entity for use in a clinical
trial of the drug should be limited to nonprofit organizations. The
comment further recommended that the organization be required to
demonstrate that it sought grant funds for the trial and any denial of
such funds was not due to lack of merit in the research plan.
(Response) FDA does not agree that the ability to charge for an
approved drug obtained from another entity should be limited to
nonprofit organizations. As discussed in the previous response, FDA has
removed from this final rule the proposed requirement that a sponsor
obtain prior approval to charge for an approved drug obtained from
another entity for use in a trial of the approved drug. Thus, any type
of sponsor can charge for such drugs without obtaining authorization
from FDA.
FDA hopes that sponsors that must obtain a drug from another entity
would ordinarily explore all reasonable financing options (e.g., grants
from various sources, funding from the drug manufacturer, a drug supply
from the drug manufacturer) before seeking to charge trial subjects for
the drug. However, FDA does not believe that it is necessary to specify
in regulation that a sponsor exhaust all available alternative
financing options before charging for the study drug.
5. Duration of Charging in a Clinical Trial
(Comment 33) One comment interpreted the provision stating that the
authorization to charge for a drug in a clinical trial will usually
last for the duration of the trial, unless FDA specifies a shorter
period, to mean that FDA's approval of the IND (after 30 days)
constitutes authorization to charge for an approved drug in a trial of
a new indication for the drug as long as the protocol states that the
sponsor or investigators may charge for the drug.
(Response) FDA disagrees with this interpretation. Section
312.8(a)(3), which applies to all requests to charge, requires that a
sponsor obtain prior written authorization from FDA to charge for an
investigational drug. A sponsor must specifically request to charge
under the applicable paragraph in Sec. 312.8 and obtain authorization
to charge pursuant to that request before it can charge for a trial
drug. No provision in this final rule should be construed to mean that
FDA's failure to place a protocol on clinical hold constitutes implicit
authorization to charge for an investigational drug, notwithstanding
that the protocol contains a provision stating that the sponsor intends
to charge.
E. Charging for Expanded Access to Investigational Drugs for Treatment
Use
Proposed Sec. 312.8(c) set forth criteria for charging for the
three types of expanded access to investigational drugs for treatment
use described in new subpart I of part 312--individual patient INDs,
intermediate-size patient population INDs, and treatment INDs (see the
expanded access final rule published elsewhere in this issue of the
Federal Register). FDA's primary concern with charging patients in
expanded access settings is that charging not interfere with the
development of investigational drugs for commercial marketing.
Therefore, under proposed Sec. 312.8(c)(1), a sponsor seeking to
charge for expanded access use must provide reasonable assurance that
charging will not interfere with developing the drug for marketing
approval. To provide such assurance for a treatment IND or protocol
under Sec. 312.320, a sponsor must include evidence of sufficient
enrollment in any ongoing clinical trial(s) needed for marketing
approval to reasonably assure FDA that the trials will be successfully
completed as planned (Sec. 312.8(c)(2)(i)); evidence of adequate
progress in the development of the drug for marketing approval (Sec.
312.8(c)(2)(ii)); and information submitted under a sponsor's general
investigational plan specifying the drug development milestones the
sponsor plans to meet in the next year (Sec. 312.8(c)(2)(iii)).
Proposed Sec. 312.8(c)(3) provided that the authorization to
charge for an expanded access use is limited to the number of patients
authorized to receive the drug under the treatment use protocol or IND,
if there is a limitation.
Proposed Sec. 312.8(c)(4) provided that the authorization to
charge for expanded access may continue for 1 year from the time of FDA
authorization and that sponsors may request that FDA reauthorize
charging for additional time periods.
1. General Comments
(Comment 34) One comment objected to the idea that sponsors could
only charge for expanded access if the cost was extraordinary.
(Response) FDA believes this comment misread the proposed rule. The
cost of an investigational drug need not be extraordinary for a sponsor
to be able to charge for the drug under an expanded access IND or
protocol in subpart I. That extraordinary cost criterion in the
proposed Sec. 312.8(b)(1)(iii) applied only to charging for a
sponsor's investigational drug in a clinical trial of that drug under
[[Page 40884]]
proposed Sec. 312.8(b)(1). Moreover, this criterion has now been
eliminated in the final rule (see comments 21 through 26).
(Comment 35) One comment stated that there is a conflict between
the proposed rule on charging and the proposed rule on expanded access
because the charging rule would not permit charging for expanded access
for individual patients or intermediate-size patient populations if
there were no ongoing or planned clinical trial that would support
marketing approval. One comment asked that charging for individual
patient expanded access be permitted. The comment also stated that it
was not clear if charging was permitted for intermediate-size patient
population expanded access. One comment stated that sponsors should be
permitted to charge for investigational drugs for all types of expanded
access programs, provided that charging will not impede drug
development.
(Response) FDA believes these comments misread the proposed rule.
Proposed Sec. 312.8(c)(1) stated that a sponsor who wishes to charge
for an investigational drug for any treatment use under subpart I of
part 312 must provide reasonable assurance that charging will not
interfere with developing the drug for marketing approval. Moreover,
the preamble to the proposed rule specifically stated that one of the
major reasons that FDA was revising the 1987 charging rule was to
provide authority to charge for investigational drugs under the two new
categories of expanded access for treatment use--individual patient and
intermediate-size population expanded access INDs (71 FR 75168 at 75169
through 75170). For expanded access under a treatment IND or treatment
protocol, the proposed rule stated that such assurance must also
include the specific types of evidence in Sec. 312.8(c)(2), including
evidence of sufficient enrollment in any ongoing clinical trials needed
for marketing approval. However, the specific types of evidence
identified apply only to requests to charge for expanded access use
under new Sec. 312.320 (treatment IND or treatment protocol) (see
Sec. 312.8(c)(2)). Because individual patient INDs (new Sec. 312.310)
and intermediate-size patient population INDs can occur earlier in drug
development and typically involve much smaller numbers of patients, FDA
did not think it would be helpful to specify in the rule how to provide
reasonable assurance that charging will not interfere with developing
the drug for marketing approval for those types of expanded access
program. To clarify that the evidentiary requirements apply only to
treatment INDs or treatment protocols, we have revised Sec.
312.8(c)(2) to describe Sec. 312.320 as covering treatment INDs and
treatment protocols, rather than merely citing to the section as the
proposed rules had done.
2. Increasing Access
In the preamble to the proposed rule, FDA identified the costs
associated with making investigational drugs available for treatment
use under expanded access programs as a potential obstacle to the
availability of such drugs (section II.C of the proposed rule). By
facilitating charging for such use, FDA stated that it hoped there
would be greater access to investigational drugs (section VI.E of the
proposed rule).
(Comment 36) Several comments expressed concerns about the
implications of permitting charging for investigational drugs for
treatment use under expanded access programs on how such drugs are
allocated. Some comments stated that the proposed rule may not increase
expanded access because third-party payers are not likely to reimburse
for investigational therapies, thus depriving patients not able to
afford such drugs. One comment added that neither patients nor insurers
should pay for investigational drugs or treatments and that the
proposed rule will significantly exacerbate the current problems of
access to, and affordability of, health care. Another comment stated
that, although the poor may qualify for company-sponsored assistance to
pay for investigational drugs, middle-class patients may not be
eligible for such programs yet still be unable to afford such drugs.
Two comments stated that permitting charging only for direct costs may
not increase access because it will not provide enough financial
incentive for companies to offer access. One comment agreed that
permitting charging for investigational drugs made available under
expanded access programs will result in greater access to
investigational drugs.
(Response) FDA recognizes that permitting cost recovery for
expanded access to investigational drugs for treatment use will not
remove all barriers to access. The agency shares the concerns about
equitable access to such drugs among patients with varying financial
resources. FDA's goal, with this cost recovery provision, is to enable
willing sponsors to make a drug available that could not otherwise be
made available or to make a drug more widely available than would be
possible absent cost recovery, thus potentially benefiting more
individuals than would have benefited absent charging. FDA has no
control over reimbursement policy. FDA hopes that sponsors that charge
for investigational drugs under expanded access programs will also make
provision for those who cannot afford such therapies.
FDA believes that permitting sponsors to recover all costs
associated with making an investigational drug available and
administering an expanded access program provides a reasonable
incentive for sponsors to make investigational drugs available for
treatment use. As discussed in greater detail in comment 46, FDA
believes the cost recovery provision, to the extent it allows companies
to recover all the direct costs associated with making the drug
available and administering the expanded access program, removes a
significant obstacle to making drugs available for treatment use for
some sponsors (e.g., sponsors with limited resources for expanded
access programs) while preventing commercialization of investigational
drugs.
(Comment 37) One comment stated that FDA should closely monitor
expanded access programs for which it permits cost recovery to ensure
that sponsors honor any commitments to make drugs available to those
who cannot afford them.
(Response) FDA hopes that sponsors would, of their own initiative,
honor their commitments to make investigational drugs available to
those who cannot afford them. However, FDA cannot require a sponsor to
honor a commitment to provide a drug to those who cannot afford it, or
otherwise compel a sponsor to provide expanded access. FDA also
recognizes that circumstances may change such that a sponsor is no
longer able to honor a commitment to make investigational drugs
available to those who cannot afford to pay for them.
(Comment 38) One comment stated that permitting charging for
investigational drugs for expanded access under subpart I will create a
dichotomy between rich and poor because patients who can afford to pay
for investigational drugs can be guaranteed access under treatment use
protocols, but those who cannot will be forced to enroll in clinical
trials with only a chance that they will receive the investigational
drug in question.
(Response) FDA does not agree that this rule will lead to a
situation in which those with fewer resources disproportionately bear
the burdens of participating in clinical trials. A sponsor cannot
charge for an investigational drug under a treatment IND unless there
is evidence of sufficient enrollment in any ongoing clinical trials
needed for marketing approval to provide FDA
[[Page 40885]]
reasonable assurance that the trials will be successfully completed
(Sec. 312.8(c)(2)(i)). FDA anticipates, therefore, that in most cases,
the majority of subjects needed to be enrolled in a trial will have
been enrolled before the drug is available under a treatment IND in
which the sponsor charges for the drug, so the trial will be fully
enrolled. In addition, access to investigational drugs under an
individual patient or intermediate-size population expanded access
program is usually limited to individuals who are ineligible to enroll
in controlled clinical trials. Section 312.310(a)(2) provides that FDA
must determine that a patient seeking access to a drug under an
individual patient IND cannot obtain the drug under another IND or
protocol, which would include a clinical trial or a larger expanded
access IND. Section 312.315(a)(2) explains that the intermediate-size
patient population IND for a drug being developed is intended to
address the situation in which patients requesting access to a drug are
unable to participate in a clinical trial of the drug because, for
example, they do not meet enrollment criteria, enrollment is closed, or
the trial site is not geographically accessible. For these reasons, FDA
believes this charging rule will not have a significant impact on the
distribution of individuals participating in clinical trials and
expanded access programs based on relative wealth.
(Comment 39) One comment stated that poor and lower- to middle-
class patients should not be required to pay any costs associated with
an investigational drug and that health insurance plans should be
required to cover all costs associated with such drugs. Another comment
stated that the rule should specify that patients who are uninsured, or
those whose insurance excludes payment for investigational drugs,
cannot be charged for an investigational drug. One comment recommended
that permission to charge by commercial sponsors be tied to a
requirement that a percentage of drugs will be provided at no cost to
the uninsured and those whose insurers do not cover the costs. Two
comments recommended that the rule specify that a certain percentage of
an investigational drug for which charging is permitted be made
available free of charge.
(Response) The agency cannot require third-party payers to cover
the costs of investigational drugs made available under expanded access
programs. We also cannot require sponsors to provide a drug free of
charge to those who lack insurance or whose insurance does not cover
investigational drugs. The agency encourages sponsors to include
provisions in their expanded access programs to assist patients who are
unable to pay for investigational drugs. The details of such plans
(e.g., the percentage of patients eligible to obtain a drug free of
charge or the percentage of drug supply that will be made available
free of charge) should be determined based on the circumstances of the
particular expanded access program.
3. Ethical Considerations
(Comment 40) Two comments stated that there are ethical concerns
with charging patients for expanded access use of investigational drugs
that may have no benefit and pose safety concerns.
(Response) In determining whether to permit an expanded access use
of an investigational drug, FDA assesses whether the potential risks
are reasonable in light of the potential benefits, sometimes on the
basis of quite limited clinical evidence. Therefore, FDA agrees that
there is a risk that the investigational drug will have no benefit and,
therefore, that a patient will pay for an investigational drug that
provides no benefit. However, if a drug has a potential benefit that is
reasonable in light of the risks associated with the drug, and the
sponsor must charge to make the drug available, FDA believes the public
health is best served by making the drug available to patients for a
fee, even if the potential benefit is not realized in a given patient.
FDA believes that the ethical concerns expressed in these comments can
be addressed by an informed consent that accurately reflects the costs,
potential risks, and potential benefits.
4. Non-Interference With Drug Development
(Comment 41) One comment asked that FDA define what it means to
interfere with the development of a drug for marketing approval.
(Response) FDA will use several criteria to determine whether
charging for an investigational drug in a treatment IND will interfere
with drug development. These criteria were described in the proposed
rule. Proposed Sec. 312.8(c)(2) described specific criteria needed to
provide FDA reasonable assurance that charging for an investigational
drug under a treatment IND or treatment protocol (new Sec. 312.320) is
not interfering with drug development. Proposed Sec. 312.8(c)(2)(i)
required sponsors to provide evidence of sufficient enrollment in any
ongoing clinical trials needed for marketing approval. Proposed Sec.
312.8(c)(2)(ii)) required sponsors to provide evidence of adequate
progress in the development of the drug for marketing approval. Such
evidence could include successful meetings with FDA before submission
of an NDA (e.g., a pre-NDA meeting), submission of an NDA, or
completion of other significant drug development milestones. Sponsors
would also be required to submit information under their general
investigational plans (Sec. 312.23(a)(3)(iv)) specifying the drug
development milestones they plan to meet in the coming year (proposed
Sec. 312.8(c)(2)(iii)). FDA could then evaluate actual progress made
versus planned progress to assess the impact, if any, of charging for
an investigational drug under a treatment IND. Negative effects on
these criteria would be considered indications of interference with
drug development.
The proposed rule did not provide specific criteria for individual
(new Sec. 312.310) and intermediate-size patient population access
INDs (new Sec. 312.315). The kinds of situations that present with
these types of INDs can vary greatly, from situations in which there is
no drug development to assess, to anywhere along the spectrum from very
early in drug development to the last stages of drug development. The
scope can range from a single isolated incidence of an individual
patient treatment use for a use not being developed to a late stage
intermediate-size population IND for over 100 patients. The agency
believes the factors that are relevant to such a determination will be
as varied as the timeframes and scopes for these types of INDs.
Therefore, FDA does not believe it is necessary or helpful to try to
describe in regulation specific criteria that a potential sponsor of an
individual patient or intermediate-size population IND must meet to
provide reasonable assurance of non-interference with drug development.
However, because the populations are smaller than for a treatment IND,
the risk of interference with drug development is less than with a
treatment IND, so FDA does not believe it will be difficult to
demonstrate non-interference with drug development for most individual
patient and intermediate-size population INDs.
5. Treatment INDs or Treatment Protocols
For treatment INDs or treatment protocols (new Sec. 312.320), the
proposed rule included additional criteria for charging. Section
312.8(c)(2) of the proposed rule provided that for a
[[Page 40886]]
treatment IND or protocol, the sponsor must provide:
Evidence of sufficient enrollment in any ongoing clinical
trial(s) needed for marketing approval to reasonably assure FDA that
the trial(s) will be successfully completed as planned,
Evidence of adequate progress in the development of the
drug for marketing approval, and
Information submitted under the general investigational
plan (Sec. 312.23(a)(3)(iv)) specifying the drug development
milestones the sponsor plans to meet in the next year.
(Comment 42) One comment stated that ``evidence of sufficient
enrollment in any ongoing clinical trial(s) needed for marketing
approval'' (Sec. 312.8(c)(2)(i)) and ``evidence of adequate progress
in the development of the drug for marketing approval'' (Sec.
312.8(2)(ii)) are too vague and do not provide adequate safeguards to
ensure that charging for an investigational drug under a treatment IND
will not interfere with a drug's development for marketing. The comment
asked that FDA also require a sponsor to submit a copy of, or cross-
reference to, its general investigational plan, including a development
timeline and clinical trial accrual estimates. The comment stated that
when requesting reauthorization, a sponsor should be required to show
that its actual enrollment is no more than 5 percent less than its
original estimates or, if lower, provide a satisfactory explanation for
the deviation from planned accrual (e.g., smaller than anticipated
population with the disease of interest from which to draw subjects).
One comment stated that determining whether charging is interfering
with the development of a drug for marketing approval would require FDA
to analyze patterns of enrollment in clinical studies and the causes of
insufficiencies in enrollment, and assess what delays are unacceptable.
(Response) FDA acknowledges that applying the criteria concerning
drug development progress involves judgment, but does not agree that
these criteria are too vague. Modern drug development involves the
progressive development of a body of evidence to support a marketing
application and generally follows a relatively predictable course. For
given diseases, it is possible to predict timeframes for development
generally and specific components of development (e.g., individual
clinical trials) with some precision. It is also true that initial time
expectations can be overly optimistic and require adjustment. However,
FDA believes a marked deviation from expectations that coincides with
the beginning of an expanded access program can be easily recognized
and interpreted as related to the availability of the drug under a
treatment IND. For this reason, FDA believes that the identified
criteria provide a reasonable basis upon which to judge drug
development progress, both before and after the initiation of a
treatment IND, to determine if progress is adversely affected.
FDA does not believe a 5-percent decrease in clinical trial accrual
from a planned clinical trial accrual rate would be a useful benchmark
for determining whether a treatment IND is interfering with drug
development. Typically, planned accrual rates are crude estimates and
lack the precision needed to make a 5-percent deviation meaningful. In
addition, the precision with which accrual rates can be predicted
likely varies for different diseases based on their prevalence and
other factors. For these reasons, FDA does not believe that specifying
a percentage deviation from expected clinical trial accrual would be
useful for evaluating potential interference with drug development by a
treatment IND. FDA also does not agree that determining whether
charging for a treatment IND is affecting drug development will require
comprehensive analyses of clinical trial accrual patterns. FDA
anticipates that a finding that reauthorization is not appropriate
because charging is interfering with enrollment in clinical trials will
ordinarily be based on very strong evidence of a significant effect
contemporaneous with onset of an access program, and not on subtle
deviations from historical accrual patterns for clinical trials in the
disease of interest.
6. 1-Year Authorization
Section 312.8(c)(4) of the proposed rule provided that charging for
any type of expanded access to an investigational drug for treatment
use may continue for 1 year from the time of FDA authorization unless
FDA specifies a shorter period. It also provided that a sponsor may ask
FDA to reauthorize charging for additional periods. The preamble to the
proposed rule stated that FDA will ordinarily authorize charging for
the drug for a period of 1 year, unless ``there is a particular concern
that charging would interfere with drug development'' (71 FR 75168 at
75172).
(Comment 43) One comment stated that the 1-year authorization
period was unnecessary because FDA can always withdraw authorization if
the criteria are no longer being met. The comment added that the
provision could delay getting drugs to patients if there were a delay
in reauthorizing charging.
(Response) The agency does not believe it is reasonable to place
the burden on FDA to investigate whether the criteria for charging
continue to be met because FDA does not have independent access to the
information needed to make that determination. FDA would need to
request that the sponsor provide the necessary information. Therefore,
FDA believes it would be more efficient if that sponsor simply provided
to FDA the information on an annual basis. We do not agree that
requiring that charging be reauthorized annually will delay patient
access to investigational drugs provided sponsors make a timely and
complete submission seeking reauthorization to charge. In most cases,
FDA believes the determination will be straightforward and the review
will be completed expeditiously.
(Comment 44) Another comment recommended reducing the time that a
sponsor may charge before seeking reauthorization to charge from 1 year
to 6 months because charging for investigational drugs always presents
a risk of compromising enrollment in clinical trials.
(Response) FDA believes the 1-year anniversary is a reasonable
point in time to re-evaluate the charging request for most
authorizations to charge. If FDA has concerns about charging for a
particular treatment IND, for example, where there is a concurrent
clinical trial still enrolling subjects, the rule provides FDA the
option to specify a shorter period in which to re-evaluate whether the
criteria for charging continue to be met.
F. Costs Recoverable When Charging for an Investigational Drug
Proposed Sec. 312.8(d) described the types of costs that a sponsor
can recover when charging for an investigational drug in a clinical
trial and for treatment use under an expanded access IND. Proposed
Sec. 312.8(d)(1) provided that a sponsor may only recover the direct
costs of making an investigational drug available.
Proposed Sec. 312.8(d)(1)(i) described direct costs as those
incurred by a sponsor that can be specifically and exclusively
attributed to providing the drug for the investigational use for which
FDA has authorized cost recovery. Direct costs include costs per unit
to manufacture the drug (e.g., raw materials, labor, and nonreusable
supplies and equipment used to manufacture the quantity of drug needed
for the use for which charging
[[Page 40887]]
is authorized) or costs to acquire the drug from another manufacturing
source, and direct costs to ship and handle (e.g., store) the drug.
Proposed Sec. 312.8(d)(1)(ii) described indirect costs (those
costs that can not be recovered when charging for an investigational
drug) as costs incurred primarily to produce the drug for commercial
sale (e.g., costs for facilities and equipment used to manufacture the
supply of investigational drug, but that are primarily intended to
produce large quantities of the drug for eventual commercial sale) and
research and development, administrative, labor, or other costs that
would be incurred even if the clinical trial or treatment use for which
charging is authorized did not occur.
1. Direct and Indirect Costs
(Comment 45) One comment stated that FDA lacked the expertise to
decide whether the price proposed by the sponsor would only cover
direct costs. The comment stated that FDA accountants would need to
scrutinize each sponsor's asserted direct costs to ensure fairness and
consistency in its handling of the policy and that distinguishing
between direct and indirect costs is likely to be complicated.
(Response) The agency believes that, when charging for
investigational drugs, a sponsor of a clinical trial or expanded access
program should not be permitted to commercialize (e.g., profit from the
sale of) the drug. Thus, the proposed rule set forth criteria that
permit a sponsor to recover only costs specifically attributable to
making the investigational drug available in the trial or expanded
access program for which cost recovery is authorized (i.e., only those
costs that would not have been incurred but for the provision of the
drug). We believe the direct cost provision as proposed, by
differentiating between direct costs and indirect costs, and not
providing for apportionment of indirect costs (e.g., overhead and
general research and development costs) simplifies the cost recovery
calculation to the extent possible and makes clear FDA's objectives
concerning what costs can be recovered. Therefore, FDA does not
anticipate major controversies concerning cost recovery calculations
under this rule, or the need to rely heavily on financial experts to
adjudicate such calculations. In the event of a significant
controversy, FDA expects that it will be able to require the sponsor to
produce supporting documentation prepared by an independent financial
expert attesting that the calculation is consistent with the cost
recovery provisions in this rule.
(Comment 46) Several comments argued that sponsors should be
permitted to charge for other types of costs in addition to those
provided for in the proposed rule. One comment stated that cost
recovery should include the costs of clinical trials, all related
research and development costs, and administrative, labor, and other
costs. Two comments stated that FDA should permit some cost recovery
for research and development costs in clinical trials. One of the
comments requested that FDA reconsider its decision to exclude research
and development costs from the cost recovery calculation. The comment
argued that FDA could provide criteria to better define recoverable
research and development costs, thus avoiding the subjectivity and
arbitrariness concerning recovery of research and development costs in
the 1987 charging rule. One comment asked that cost recovery be
permitted for production fixed costs such as capital investment and
fixed manufacturing expenses. Two comments agreed that sponsors should
only be permitted to charge for direct costs. One of the comments
agreed with the statement in the proposed rule that provision of
unapproved drugs should ordinarily be considered part of the cost of
doing business and that charging for indirect costs and overall
development costs should not be permitted. One comment stated that the
proposed rule's description of recoverable costs is subject to varying
interpretations by accounting professionals and would thus result in
inconsistent application of the cost recovery provisions.
(Response) FDA does not agree that the cost recovery provision
should provide for recovery of research and development costs incurred
to develop the drug for marketing approval. For a drug that has not yet
been approved for any purpose, the intent of permitting charging for
that drug in a clinical trial is to provide the opportunity to recoup
the cost of making the drug available when the cost of that drug is
extraordinary in relation to drug costs generally, or in relation to
the resources of the sponsor, and therefore, highly burdensome for a
sponsor. The intent is not to subsidize the overall development of the
drug. In general, the costs associated with drug development are very
large, so it is not reasonable to expect the relatively small number of
patients participating in a clinical trial (compared to those who will
obtain a drug once it is on the market) to be able to meaningfully
subsidize those costs.
The intent of allowing cost recovery for expanded access uses is to
remove any financial disincentive for a sponsor to make a drug
available by permitting the sponsor to recover direct costs of making
the drug available plus monitoring and administrative costs directly
associated with the expanded access use. The intent is not to allow a
sponsor to begin recouping its general drug development investment in
advance of marketing approval. FDA believes that allowing recovery of
those generalized costs prior to marketing approval would be
effectively permitting commercialization of an unapproved drug.
The agency also does not agree that the cost recovery provision
should provide for recovery of capital investment and fixed
manufacturing costs, which are incurred by the sponsor primarily for
the purpose of manufacturing sufficient quantities of the drug for
commercial sale. These costs also should be recouped during commercial
marketing of the drug.
(Comment 47) One comment asked that FDA revise the proposed rule to
permit cost recovery for the cost of drug delivery, which includes
formulation, packaging, instrumentation, monitoring, disposables,
setup, nursing, and similar costs.
(Response) It is not necessary to make the suggested revisions
because such costs can be recovered without authorization from FDA.
Section 312.8(d)(1) is intended to permit a sponsor to recover its
direct costs incurred in making a drug available from the onset of
manufacturing to the point it arrives at the destination to which it
was shipped, or acquisition, shipping, and handling costs for a drug
acquired from another source (e.g., where manufacturing is outsourced).
Subsequent costs incurred at a clinical trial site (e.g., a hospital or
clinic), including pharmacy costs (e.g., the cost to reformulate a drug
for infusion), nursing costs (e.g., costs associated with administering
a drug and monitoring study subjects), equipment costs (e.g.,
intravenous (IV) administration sets), and costs for study-related
procedures (e.g., chemistry labs, radiographic procedures), are outside
the scope of this rule. That is, the costs of these items and services
can be recovered without prior authorization from FDA (also see
response to comment 64, which includes a link to the Center for
Medicare and Medicaid Services (CMS) policy concerning reimbursement
for clinical trial related items and services).
(Comments 48) One comment stated that there might be substantial
differences in the amount charged per
[[Page 40888]]
patient for the same drug if the cost were allocated across a small
population clinical trial compared to a large population trial.
(Response) We agree that this result is possible. For example, if a
sponsor is permitted to charge for a drug in a small clinical trial,
and the sponsor then submits a separate request to charge for the drug
in a larger subsequent trial of the same drug, the drug cost may be
lower in the larger trial due to economies of scale. FDA believes the
higher cost for the smaller population is probably unavoidable and is a
reasonable outcome for cost recovery purposes.
(Comment 49) One comment stated that limiting the amount of cost
recovery for an approved drug to acquisition and handling costs,
instead of permitting investigators and pharmacies to seek normal
reimbursement amounts, would create serious administrative problems
because it would require investigators to establish separate billing
and inventory accounting systems for trial drugs. The comment added
that, to the extent that community pharmacies are furnishing drugs in
clinical trials, the proposal to limit what they can charge does not
seem feasible, because they would not even be aware of the customer's
status as a clinical trial subject.
(Response) As discussed in comment 27 and 31, FDA has revised the
proposed rule so that sponsors that must obtain the study drug or an
active control from another entity (i.e., a sponsor who is not the
applicant who holds the approved application for a drug and
commercially markets the drug) are not required to obtain authorization
to charge for the drug. FDA believes such sponsors should be able to
cause the approved drug to be distributed to trial subjects through
ordinary distribution channels for approved drugs (e.g., an inpatient
or outpatient pharmacy) pursuant to a physician's order or prescription
and to cause subjects to be charged the same amount that would be
charged to a patient who received the drug in the course of clinical
practice. As discussed in comment 26, sponsors that conduct trials of
their own approved drug (e.g., a drug that the sponsor commercially
markets) must obtain prior authorization to charge for the trial drug
pursuant to the criteria set forth in Sec. 312.8(b)(1) of this final
rule. Such sponsors are permitted to recover only their direct costs
for making the trial drug available to subjects as described in Sec.
312.8(d) of this final rule.
(Comment 50) One comment was concerned that limiting the amount a
sponsor would be able to charge for an approved drug in a clinical
trial to cost only would have implications for the rebates and
discounts that must be made to eligible entities (private entities
receiving grants under the Public Health Service Act, and certain
hospitals) under the Medicaid Rebate and the 340B Program (section 340B
of the Public Health Service Act (42 U.S.C. 256b)). The comment stated
that rebates and discounts for a drug under these programs are based in
part on the ``best price'' to any purchaser during each calendar
quarter and was concerned that if the amount charged under this rule
were included in the ``best price'' determination, the sponsor could
incur a large liability for rebates and discounts to eligible entities.
The comment stated that such pricing could also be construed to
establish most favored customer pricing that could be used to set
prices under the Federal Supply Schedule contracts with the Federal
Government.
(Response) FDA believes that recovery of drug costs associated with
making an approved drug available to subjects in a clinical trial is
distinct from the commercial sale of drugs. The former does not involve
a commercial sale of the drug and is not intended to make a drug
available for use in a clinical practice setting. FDA believes that the
primary objective of programs for Medicaid and the 340B program (by
which certain federally funded grantees and safety net providers may
purchase prescription drugs at significantly reduced prices) and of
those agencies that administer Federal Supply Schedules for
pharmaceuticals (e.g., the Veterans Administration) is to obtain fair
pricing relative to the prices paid by other entities in the commercial
marketplace for drugs used in clinical practice settings (e.g., in a
hospital, for outpatient use), and not relative to the amount a sponsor
charges in the unusual circumstance in which it seeks to recover its
drug cost in a clinical trial. However, sponsors who intend to charge
for an approved drug in a clinical trial should consult with CMS
concerning the implications of cost recovery on the best price
determination. Sponsors should also consult with the agencies that
administer Federal Supply Schedule contracts for pharmaceuticals
concerning the implications for prices under those contracts.
(Comment 51) One comment asked that FDA permit cost recovery for
direct manufacturing costs for equipment and reusable supplies used to
manufacture the investigational drug and marginal costs to produce
additional investigational drugs.
(Response) The intent of the cost recovery provision is to permit
cost recovery for whatever direct costs are attributable to providing
the amount of drug needed for the clinical trial or expanded access
use. The rule purposefully excludes many other costs (e.g., overhead,
depreciation, reusable supplies, equipment, manufacturing facility)
that would be incurred even if the amount of drug needed was not
produced, but a small fraction of which could be apportioned to the
drug supply produced under general accounting principles. FDA believes
these costs would ordinarily be a very small percentage of the total
cost when apportioned to the amount of drug produced for a clinical
trial or expanded access program, so permitting recovery for these
types of costs would create needless complexity and administrative
burdens. For example, FDA would need to retain personnel with financial
expertise to assess a relatively small number of very complex cost
recovery calculations. FDA also believes permitting cost recovery for a
broader array of costs might invite expansive and unwarranted
interpretations of allowable costs, which would create additional
administrative burdens.
(Comment 52) Three comments stated that FDA should allow charging
for the market value of an approved drug being studied for a new
indication. One comment stated that when charging for approved drugs,
normal charges incurred at the site at which the drug is dispensed
(e.g., outpatient or inpatient pharmacy) should be permitted.
(Response) As discussed in comment 31, FDA has revised the proposed
rule to eliminate the requirement for prior approval to charge for an
approved drug being studied for a new indication when the sponsor must
obtain the drug from another entity. In this situation, the sponsor can
cause the drug to be distributed to subjects through ordinary
distribution channels for marketed drugs (e.g., inpatient or outpatient
pharmacies).
However, a sponsor must obtain prior approval to charge, and may
recover only the sponsor's direct costs for making a drug available, in
the sponsor's trial of a new indication or use of its own approved
drug. FDA believes that entities that are marketing an approved drug
should generally not charge for the drug in such trials. As discussed
in comment 26, sponsors that also market the approved trial drug should
not be able to commercialize an unapproved use by charging subjects
[[Page 40889]]
market value for the drug in a trial of the unapproved use.
2. Recoverable Costs for Expanded Access Uses
Proposed Sec. 312.8(d)(2) provided that when charging for an
expanded access use under proposed Sec. 312.315 (intermediate-size
patient population IND or intermediate-size patient population
protocol) and Sec. 312.320 (treatment IND or treatment protocol), a
sponsor may recover, in addition to the direct costs of the
investigational drug as described in proposed Sec. 312.8(d)(1)(i), the
costs of monitoring the expanded access IND or protocol, complying with
IND reporting requirements, and other administrative costs directly
associated with the expanded access use.
(Comment 53) Two comments recommended that sponsors be allowed to
charge a reasonable administrative fee, rather than basing charging on
an FDA-reviewed calculation of direct costs. The comments suggested
that the fee could be set by the sponsor after consultation with
patient groups or based on a comparison of the cost of treatment with
other drugs in the class or other therapies. The comments further
stated that this proposal would simplify the administrative burden and
encourage sponsor participation in expanded access programs.
(Response) FDA believes its proposed approach to determining what
costs can be recovered for making investigational drugs available for
expanded access uses--permitting a sponsor to recover its direct drug
costs plus costs of monitoring the expanded access IND or protocol,
regulatory compliance associated with the IND or protocol, and other
direct administrative costs--is preferable because it simply permits a
sponsor to recover all costs it incurs to provide the drug under the
expanded access IND or protocol. An administrative fee approach
involving consultation with affected patient groups and comparisons of
treatment costs for similar or related treatment options seems to add
needless complexity and invite arbitrary cost recovery determinations.
In addition, this approach would provide FDA no tangible criteria by
which to assess whether the amount charged represents commercialization
of an unapproved drug.
(Comment 54) Two comments asked FDA to clarify the evidence
required to support the amount to be charged under an expanded access
program, especially for orphan indications. One of the comments asked
that FDA develop guidance with examples of acceptable cost recovery
determinations.
(Response) The recoverable costs for orphan indications under an
expanded access program will be the same as for other indications: The
direct costs of the drug plus its monitoring, regulatory compliance,
and other administrative costs. FDA believes the rule clearly reflects
this intent and no additional criteria or guidance are needed
concerning what costs can be recovered for investigational drugs for
orphan indications. As discussed in the response to comment 48, it is
likely that the unit cost of a drug will increase as the size of the
population to be treated decreases, but this correlation is unavoidable
and does not require any special considerations in the cost recovery
calculation. Although FDA believes the cost recovery provisions are
sufficiently clear, FDA will evaluate how the rule is implemented and,
if there is confusion concerning recoverable costs for expanded access
purposes, FDA will consider developing guidance to assist
implementation.
(Comment 55) One comment stated that sponsors will continue to be
reluctant to charge for a product made available for an expanded access
use where the safety and efficacy is unproven, for which there is no
reimbursement to help patients pay such costs, and where the allowable
charges are limited to the ``direct costs'' of manufacturing and
distributing the proposed product.
(Response) FDA is not advocating that sponsors charge for
investigational drugs in expanded access programs. The purpose of
permitting cost recovery for expanded access use is to remove any
financial disincentive to making a drug available for such use. FDA
hopes that sponsors that have the resources to make investigational
drugs available for expanded access use will continue to make such
drugs available free of charge.
(Comment 56) One comment stated that monitoring or reporting costs
for expanded access appear to be excluded by the rule.
(Response) The comment misinterpreted the proposed rule. Proposed
Sec. 312.8(d)(2) specifically provided that, for expanded access to an
investigational drug for treatment use under proposed Sec. Sec.
312.315 (intermediate-size patient population) and 312.320 (treatment
IND or treatment protocol), in addition to the direct costs described
in proposed paragraph (d)(1)(i) of Sec. 312.8, a sponsor may recover
the costs of monitoring the expanded access IND or protocol, complying
with IND reporting requirements, and other administrative costs
directly associated with these two types of expanded access.
3. Supporting Documentation
Proposed Sec. 312.8(d)(3) provided that a sponsor must provide
supporting documentation to show that its cost recovery calculation is
consistent with the recoverable costs requirements in paragraphs (d)(1)
and, if applicable, (d)(2).
(Comment 57) One comment asked FDA to clarify that if the sponsor
challenges FDA's calculation or authorization of recoverable costs, any
affected person, including patients, may be a party to that review.
(Response) If FDA determines that the amount sought to be charged
must be lowered by a specified amount and the sponsor formally disputes
that determination, third parties would not be allowed to be party to
the dispute resolution without the sponsor's consent because the
discussion would invariably involve commercial confidential
information. A sponsor's formal dispute of an FDA denial of a charging
request would present the same problem for third parties seeking to be
a party to the dispute resolution. Therefore, FDA believes it cannot
provide for third-party participation in formal disputes concerning
charging determinations without the consent of the sponsor disputing
the FDA determination. Moreover, FDA anticipates that most disputed
issues with a charging request will be resolved informally in
discussions between FDA and the sponsor seeking charging, so a formal
dispute will be rare.
(Comment 58) One comment stated that the rule should provide that
documentation of recoverable costs follow accepted accounting
practices. Another comment stated that it would be difficult for FDA to
verify the costs requested, pointing out that the proposed rule stated
that if requester's supporting documentation relies on financial
information or accounting methods beyond the expertise of FDA
reviewers, FDA may request that a sponsor provide independent
certification.
(Response) FDA agrees that the documentation provided to support a
calculation of recoverable costs for charging purposes should be
prepared by a professional who is competent to make the required
determinations. FDA also agrees that it may lack expertise to verify
the costs requested. Accordingly, the proposed rule has been revised to
state that the documentation must be accompanied by a statement that a
[[Page 40890]]
certified public accountant has reviewed and approved the calculations.
(Comment 59) One comment noted that the proposed rule needs to
address the tax implications for sponsors of investigational drug
charges.
(Response) It is not within FDA's expertise to interpret the tax
implications of these charging regulations. Sponsors and individuals
who take advantage of the cost recovery option afforded by these
regulations are responsible for determining the tax consequences of
that cost recovery.
4. Authority to Set Pricing
(Comment 60) Two comments stated that FDA has no statutory
authority to regulate the price for which medicine is sold, whether it
is approved or unapproved, and such regulation is outside FDA's
statutory mission to ensure the safety and effectiveness of marketed
drug products.
(Response) The comment misunderstands FDA's statutory basis and
goals for regulating charging. FDA is not setting a price for a
medication for commercial sale. This final rule intends only to permit
recovery of certain costs associated with making an investigational
drug available in a clinical trial or for an expanded access use, not
to permit FDA to set the price for commercial sale of drugs. In the
preamble to the proposed rule, FDA discussed its legal authority (71 FR
75168 at 75173, citing 52 FR 19466 at 19472 (May 22, 1987)). FDA
concluded that permitting a sponsor to charge an amount greater than
necessary to recover its costs (i.e., to permit a sponsor to profit)
would be considered commercialization. For that reason, FDA stated that
sponsors could only recover their costs associated with making an
investigational drug available. This final rule merely refines what
would be considered allowable costs to address some confusion and
varied interpretations with the 1987 charging rule.
(Comment 61) One comment asked for clarification about what would
be an acceptable independent certification for cost recovery
calculations.
(Response) Independent certification from an outside accountant is
likely to be adequate documentation concerning the recoverable costs
that can be incorporated into the unit cost of the investigational
drug. The final rule states that the documentation must be accompanied
by a statement that an independent certified public accountant has
reviewed and approved the calculations.
5. Confidentiality
(Comment 62) Three comments expressed concern about the
confidentiality of the documentation used to support cost calculations.
Two comments stated that financial information should be considered
proprietary and should not be available to the public either before or
after approval.
(Response) FDA will maintain the confidentiality of documentation
submitted to support charging requests in a manner consistent with the
requirements of 21 CFR part 20. The sponsor is responsible for ensuring
that the party providing the certification keeps confidential the
information relied on in making that certification.
6. Effect on Payment Systems (CMS and Insurance)
(Comment 63) Several comments expressed concern about the
relationship between the proposed rule and payment systems,
specifically systems of CMS and health insurance companies. One comment
suggested that there should be regulatory changes to require Medicare
Part D and other third-party payers to pay for investigational drugs
used in clinical trials for which FDA has permitted charging. The
comment suggested that the proposed rule could also be revised to
provide that FDA authorization to charge for an investigational drug in
an expanded access program constitutes approval of the drug so that
third-party payers such as insurance companies and Medicare Part D
would reimburse patients. Two comments stated that if Medicare covers a
drug used in a clinical trial under its coverage with evidence
development policy (see CMS ``Coverage with Evidence Development,''
http://www.cms.hhs.gov/CoverageGenInfo/03_CED.asp (FDA has verified
the Web site address, but FDA is not responsible for any subsequent
changes to the Web site after this document publishes in the Federal
Register.)), FDA should permit charging for the drug. Another comment
recommended that FDA advise CMS to develop a reimbursement model for
drugs being used under expanded access programs because private health
insurers will then follow suit and there will be more equitable access
to investigational drugs. One comment suggested that FDA should require
insurers to agree that investigational drugs will be listed on a
reimbursable formulary for the indications tested in trials or used in
expanded access programs.
(Response) FDA authority to provide for an exception to the general
prohibition on charging for investigational drugs, and its policies
concerning charging, are distinct from CMS authority to identify the
medical interventions for which it will reimburse. FDA has no authority
to require that CMS reimburse for investigational drugs for which FDA
has permitted charging. Similarly, FDA has no authority to dictate
reimbursement policy to private health insurers. FDA notes that there
is a trend toward providing reimbursement for medical care related to
participation in a clinical trial, and reimbursing for investigational
uses of products when there is a certain level of evidence to support
the use. FDA believes these are encouraging developments and hopes that
third-party payers will continue to develop policies to provide
reimbursement for investigational therapies in appropriate
circumstances.
7. Collaboration With CMS and the National Cancer Institute
(Comment 64) One comment stated that it would be useful if FDA,
CMS, and the National Cancer Institute were to collaborate on the
reimbursement implications of this new rule to ensure there are no
obstacles to Medicare payment for these investigational drugs.
(Response) FDA discussed the implications of the proposed charging
regulation with CMS prior to publishing the proposed rule so CMS could
assess the implications of the rule on its reimbursement programs. FDA
has also discussed this final rule with CMS. Under current part B
policy, CMS does not cover the costs of an investigational drug used in
a clinical trial unless the drug is otherwise covered outside the
clinical trial. However, certain routine costs associated with medical
care obtained due to clinical trial participation may be covered (see
Medicare Clinical Trial Policies, http://www.cms.hhs.gov/ClinicalTrialPolicies/ (follow link to Current Policy, NCD for Routine
Costs in Clinical Trials (310.1))). In Part D, the statute clearly
defines the drugs that may be covered under the program (and their
accepted indications).
(Comment 65) One comment asserted that States will create mandated
insurance coverage to mirror the proposed rule expansion. The comment
stated that if health insurers are required to cover the cost of these
drugs, they will need to increase premiums and that increasing premiums
will cause more people to become uninsured.
(Response) Currently, States generally do not mandate reimbursement
for
[[Page 40891]]
investigational medical interventions. That States may, at some point
in the future, begin to institute policies mandating coverage of
investigational drugs for which FDA has authorized charging is
speculative, and thus not a basis for modifying current FDA policies.
In addition, the likelihood that this final rule will further reduce
access to health insurance because of increased costs associated with
reimbursement for investigational therapies seems remote even if
reimbursement were required, as investigational drugs provided under
this regulation would constitute only a tiny fraction of overall drug
use.
G. Miscellaneous Comments
1. Promotion
(Comment 66) One comment pointed out that FDA regulations at Sec.
312.7 prohibit promotion of an investigational drug and asked that FDA
clarify that this final rule permits an approved drug to be promoted
outside of a clinical trial for its approved uses, even if the drug is
used in a clinical trial.
(Response) FDA agrees with the comment. Nothing in this final rule
should be construed as a constraint on a manufacturer's ability to
promote an approved drug for its approved indications.
2. Liability
(Comment 67) One comment notes that there are potential liability
concerns that need to be addressed that may result from subjects
experiencing serious adverse events when charged for an investigational
drug not approved by FDA.
(Response) When the amount charged for the investigational drug is
merely the sponsor's cost, and subjects have given their informed
consent to participate in a trial in which there is charging for study
drug, FDA does not believe there would be a meaningful difference in a
sponsor's product liability exposure when it charges for the drug
compared to when it does not.
3. Product Labeling
(Comment 68) One comment pointed out that Sec. 312.6(a) requires
that the immediate package of an investigational new drug bear a label
advising that the drug is limited by law to investigational use. The
comment expressed concern that the proposed rule could be interpreted
as requiring approved drugs to bear that statement.
(Response) FDA does not interpret this final rule as requiring use
of the statement required by Sec. 312.6(a) on the label of an approved
drug product. The labeling approved for marketing of the product is
acceptable. However, nothing in this final rule prevents a sponsor from
designating a clinical supply of approved drug for use only in a
clinical investigation and labeling the product in the manner provided
by Sec. 312.6(a).
4. Analysis of Impact
(Comment 69) One comment disputed FDA's conclusion that Executive
Order 12866 does not apply because the proposed rule is not an
economically significant regulatory action. The comment maintained that
expanding the scope of treatment uses for which charging is permitted
to include charging for drugs made available under intermediate-size
patient populations and for individual patients could result in a
significant financial impact. The comment also noted that one of the
reasons for allowing charging in clinical trials is that the
development of the investigational drug may be extraordinarily
expensive. The comment stated that since FDA is predicting that
requests for charging in clinical trials, and hence charging for
extraordinarily expensive drugs will increase, there would likely be a
significant financial impact. The comment asked that FDA perform an
economic impact analysis or provide a better reason the Executive order
does not apply.
(Response) Based on our analysis (incorporating changes made to the
proposed rule), we conclude that the final rule is not economically
significant as defined under Executive Order 12866. The comment does
not provide any data or alternative analyses that would lead the agency
to change this conclusion. Historical data indicate that only a very
small percentage of all INDs submitted to FDA for clinical trials or
treatment use include requests to charge for the drug. FDA expects only
a slight increase in the already limited number of requests to charge
as a result of the final rule. Our analysis of impacts predicts only a
slight increase in charging for individual patient INDs, and a modest
increase in charging for intermediate-size patient population INDs (see
section VI.E.2 of this document) (upper bound of less than 800 total
patients affected). Because provisions for allowing charging in a
clinical trial have been in the regulation since 1987, and this rule
merely clarifies the criteria for allowing such charging, FDA does not
anticipate a meaningful increase in charging requests in that setting.
Thus, we do not believe that the final rule will have a significant
economic or financial impact.
(Comment 70) One comment disputed FDA's assertion in the proposed
rule that the ``costs [associated with making investigational drugs
available for treatment use] would not be excessive and would be
justified by the primary benefit of this proposed rule, making
investigational drugs available for treatment use that could not be
otherwise made available without charging'' (71 FR 75168 at 75175). The
comment stated that there is little evidence for these claims, arguing
that the costs are likely to be very high in some cases and relatively
low in other cases.
(Response) FDA agrees that there will be a range of costs for
investigational drugs made available for treatment use and subject to
charging, and that costs could be quite high in some cases. However,
the differing costs of drugs across different expanded access programs
does not undermine FDA's conclusion that costs of this final rule are
justified in light of the potential benefits associated with broader
access to investigational drugs for treatment use. That conclusion is
not intended to imply that costs and benefits are offset in each
individual case in which there is charging for drugs made available for
treatment use, so variation in cost across different expanded access
programs does not undermine the overall conclusion.
(Comment 71) One comment reviewed claims data on the treatment of
diseases likely to fall under the FDA's proposed rule changes. The
comment assumed that physicians would request access to investigational
drugs only when available therapies have failed or when conventional
therapies do not exist. The comment also assumed that, depending on the
circumstances, investigational drugs will be used as first-line
therapy, second-line therapy, monotherapy and combined therapy with
FDA-approved medications. Based on these assumptions, the comment
estimated the additive cost of the proposed rule as it would apply to
enrollees in commercial/private health plans to be $273,700,000. The
comment expressed the belief that these estimates actually understate
the burden to private sector payers, because they exclude potential
annual costs to Medicare Advantage plans.
(Response) Based on our analysis, we concluded that the costs of
the final rule will be small. In response to the comment, we have
included estimates of the number of individual patients charged for
investigational drugs under current rules, and the number of additional
patients we expect may be charged for investigational drugs under this
final rule. FDA's estimates indicate that, on average, as many as
12,566 patients per year may be charged for
[[Page 40892]]
investigational drugs under current rules. In addition, we estimate
that as many as 770 additional patients per year may be charged for
investigational drugs under this final rule. These estimates are based
on assumptions used in our analysis of impacts for the proposed rule
that were not substantively challenged in any of the comments received.
The estimate of 67,500 patients affected per year in the comment
draws no distinction between patients who may be charged for
investigational drugs under current rules and those additional patients
who may be charged under this final rule. In assessing the impact of
the final rule, it is the incremental effect, or additional patients
that may be charged for investigational drugs, that must be considered.
Patients who may be charged for investigational drugs under current
rules are not relevant to an analysis of impacts for this final rule.
The comment appears to assume that all patients who may be eligible to
obtain an investigational drug under an expanded access IND would seek
access, and that an appropriate drug would be available in all cases.
In addition, the comment appears to assume that all patients with
access to investigational drugs will also be charged for those drugs.
Our analysis of historical data indicates that, on average, only about
1.1 percent of all IND submissions per year are associated with
charging requests.
The only direct costs that are relevant to this final rule are the
costs to drug sponsors to prepare and submit charging requests to FDA.
The comment did not provide an estimate of these costs.
IV. Legal Authority
FDA has the authority under the Federal Food, Drug, and Cosmetic
Act (the act) to permit charging for an investigational new drug under
the conditions set forth in this final rule. This final rule clarifies
and slightly expands the charging scheme that is already in place. It
is based on the agency's\2\ 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)).
---------------------------------------------------------------------------
\2\ In light of section 903(d) of the act (21 U.S.C. 393(d)),
and the Secretary of Health and Human Service's delegations to the
Commissioner of Food and Drugs, statutory references to ``the
Secretary'' in the discussion of legal authority have been changed
to ``FDA'' or ``the agency.''
---------------------------------------------------------------------------
Section 505(i) of the act directs the agency to issue regulations
exempting from the operation of the new drug approval requirements
drugs intended solely for investigational use by experts qualified by
scientific training and expertise to investigate the safety and
effectiveness of drugs. It is this authority that underlies FDA's IND
regulations in part 312. The final rule adds to and clarifies the
previous IND regulations by revising the 1987 charging rule to explain
the circumstances under which charging for an investigational drug is
appropriate in a clinical trial and to clarify what costs can be
recovered.
Section 561 of the act, added by the Food and Drug Administration
Modernization Act of 1997 (Public Law 105-115), provides additional
authority for this final rule. One of that section's preconditions to
providing an investigational drug for treatment use is that the
sponsors submit a protocol consistent with regulations issued under
section 505(i) of the act (see section 561(b)(1), (b)(4), and (c) of
the act). This rulemaking sets out the circumstances under which
charging for an investigational drug is appropriate for treatment use
in an expanded access program as well as in a clinical trial and
clarifies what costs can be recovered.
Section 701(a) of the act gives FDA the authority to issue
regulations for the efficient enforcement of the act. Further
discussion of FDA's legal authority regarding charging can be found at
52 FR 19466 at 19472 (May 22, 1987).
V. Environmental Impact
The agency has determined, under 21 CFR 25.30(h), that this action
is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.
VI. Analysis of Economic Impacts
FDA has examined the impacts of the final rule under Executive
Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and
the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive
Order 12866 directs agencies to assess all costs and benefits of
available regulatory alternatives and, when regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this final rule is not an economically significant regulatory action
under the Executive order.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that will minimize any significant impact of a rule
on small entities. Our economic analysis for the proposed rule did not
indicate any significant new regulatory burden, and we did not receive
any comments that would cause us to reconsider this determination.
Therefore, the agency certifies that the final rule will not have a
significant economic impact on a substantial number of small entities.
Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires
that agencies prepare a written statement, which includes an assessment
of anticipated costs and benefits, before proposing ``any rule that
includes any Federal mandate that may result in an expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100,000,000 or more (adjusted annually for
inflation) in any one year.'' The current threshold after adjustment
for inflation is $133 million, using the most current (2008) Implicit
Price Deflator for the Gross Domestic Product. FDA does not expect this
final rule to result in any 1-year expenditure that will meet or exceed
this amount.
Preparing additional charging requests accounts for the anticipated
costs of this final rule. The agency estimates that, the cost for a
sponsor to prepare and submit a charging request is approximately
$2,500, and that these costs will be widely dispersed among affected
entities. Because such requests are rare, the incremental number of
requests generated by this final rule, as well as the total costs of
the rule, will probably be quite small. Permitting charging for a
broader range of treatment uses for investigational drugs will increase
sponsors' incentives to undertake such activities, thereby promoting
development of new products, as well as the development of new uses for
already approved products. Due to uncertainty with respect to the
potential magnitude of such benefits, and a lack of necessary data, FDA
did not generate quantitative estimates of expected benefits.
A. Objectives of the Final Rule
The objectives of the final rule are to clarify and expand on 1987
charging rule that permits sponsors to charge patients for
investigational drugs. Under this 1987 charging rule, FDA could
authorize charging for an investigational drug used in a clinical trial
or under a treatment IND or protocol. The final rule describes more
specifically the types of
[[Page 40893]]
costs that can be recovered when charging for an investigational drug.
The final rule also adds provisions that permit charging for
investigational drugs for all of the various types of expanded access
use described under final subpart I of part 312.
B. The Need for the Final Rule
The final rule is needed to establish charging provisions for
additional types of expanded access use other than the treatment IND or
protocol. Elsewhere in this issue of the Federal Register, FDA is
amending part 312 of its regulations by adding subpart I concerning
expanded access to investigational drugs. In addition to the treatment
IND or protocol previously described in FDA regulations, the expanded
access final rule specifically authorizes expanded access use for
individual patients, including in emergencies, and expanded access use
for intermediate-size patient populations. The expanded access final
rule is intended to improve access to investigational drugs for
patients with serious diseases who have exhausted other therapeutic
options and may benefit from such therapies. This final rule is
necessary to establish provisions that permit charging for
investigational drugs for all of the categories of expanded access use
described under final subpart I.
The final rule is also needed to clarify and better explain the
types of costs sponsors are permitted to recover through charging. The
1987 charging rule describing the costs a sponsor can recover when
charging for an investigational drug has proven difficult to interpret
and apply. Some sponsors have interpreted the language broadly to
permit recovery of costs much greater than those directly attributable
to providing the investigational drug for the approved treatment use.
In addition, ambiguities in the 1987 charging rule may have caused
inefficiencies leading some drug sponsors to devote more resources than
necessary to the preparation and submission of charging requests.
C. Why Allow Charging?
The expense of conducting a clinical trial is considered a normal
cost of drug development that should be recovered through sales after
marketing approval. However, in some clinical trial settings, a sponsor
may incur extraordinary costs compared to typical drug development
expenses. Such a cost burden may arise because of unusually high
manufacturing costs, the quantity of the drug required, the number of
patients involved, the expected duration of treatment, or some
combination of these factors. The agency believes that allowing cost
recovery through charging may be appropriate in these instances, but
only as a last resort source of funding to facilitate development of a
promising new therapy that could not otherwise be developed.
In some clinical trials, it may be necessary for a sponsor to
obtain an approved drug from another entity. The approved drug may be
used as an active control or in combination with the sponsor's drug in
a clinical trial designed to evaluate the effectiveness or safety of
the sponsor's investigational drug. In these situations, the trial
subjects typically must receive some therapy for their disease because
using a placebo control will be unethical. In addition, the subjects
often will be treated with the approved drug in the course of medical
practice if they were not participating in the clinical trial. FDA had
proposed criteria for charging in these situations that presented a
much lower threshold than for charging for the sponsor's own
investigational drug. Based on comments received, FDA has elected not
to require sponsors who must obtain an approved drug from another
entity for use as an active control, or in combination with the
sponsor's own drug, to obtain authorization to charge for the drug and
otherwise fulfill the requirements in Sec. 312.8. Under this final
rule, such sponsors can charge at their own discretion in this
circumstance.
In other situations, an approved drug must be obtained by a third
party (not the holder of the approved application) to study the drug in
a clinical trial for a new use or to obtain important safety
information about an approved indication. Researchers conducting such
clinical trials are primarily noncommercial entities who are not in the
business of drug development. Typically, these sponsor-investigators
conduct relatively small trials at a single site. Since such sponsors
lack the resources of commercial sponsors and do not conduct the
research for commercial purposes, they will not be able to recover the
cost of obtaining the approved drug by marketing the drug, for example,
for a new indication. The agency believes these kinds of trials should
be encouraged because they may yield important data about less
commercially viable uses of a drug or additional drug safety
information. FDA had proposed criteria for charging in these situations
that presented a much lower threshold than for charging for the
sponsor's own investigational drug. Based on comments received, FDA has
elected not to require sponsors who must obtain an approved drug from
another entity for a study of the approved drug (e.g., a study of a new
use) to obtain authorization to charge for the drug and otherwise
comply with the requirements of Sec. 312.8. Under this final rule,
such sponsors can charge at their own discretion in this circumstance.
In contrast to clinical trials, granting expanded access to
investigational drugs for treatment use primarily benefits individual
patients and is not intended typically to generate data needed to
support marketing approval. Thus, the costs to sponsors associated with
making a drug available for expanded access are not considered typical
drug development expenditures. For this reason, the agency believes
that it is generally more appropriate to permit sponsors to charge for
expanded access to investigational drugs for treatment use. Allowing
charging in expanded access settings may also provide financial
incentives for sponsors to make investigational drugs more widely
available in these situations.
D. Baseline for the Analysis
During the period 1997 through 2005, FDA received an average of
2,046.6 INDs per year. During this same period, the agency received an
annual average of 22.6 requests to charge patients for investigational
drugs. Thus, only about 1.1 percent (0.011 = 22.6 / 2,046.6) of all
INDs received by the agency on an annual basis were associated with
charging requests. Similarly, FDA received an average of 4.6 treatment
IND or protocol submissions and 1.1 treatment IND or protocol charging
requests per year during this period. Thus, requests to charge under
treatment INDs or protocols were associated with about 0.05 percent
(0.0005 = 1.1 / 2,046.6) of all INDs received by the agency, and
approximately 23.9 percent (0.239 = 1.1 / 4.6) of all treatment IND or
protocol submissions per year.
FDA also received an average of 55 other IND submissions and 15.6
other charging requests per year during this period. These requests
were to charge patients for expanded access to investigational drugs in
situations other than individual patient or emergency INDs, and
treatment INDs or protocols. Such situations generally included
requests to charge for expanded access in intermediate-size patient
populations and under clinical trials. Because the intermediate-size
patient population IND or protocol was not previously established in
regulation, a more precise distribution of other charging requests
cannot be determined. Nevertheless, other charging requests were
associated
[[Page 40894]]
with about 0.76 percent (0.0076 = 15.6 / 2,046.6) of all INDs received
by the agency, and approximately 28.4 percent (0.284 = 15.6 / 55) of
all other IND submissions each year from 1997 through 2005.
Finally, FDA received an average of 659 individual patient or
emergency IND submissions and 5.9 charging requests for individual
patient or emergency INDs per year. Thus, single patient or emergency
IND charging requests are associated with about 0.29 percent (0.0029 =
5.9 / 2046.6) of all INDs, and approximately 0.9 percent (0.009 = 5.9 /
659) of all single patient or emergency INDs received by the agency
each year. This information is summarized in table 1 of this document.
Table 1.--Baseline Data for Average Annual Number of IND Submissions and Charging Requests by Category
----------------------------------------------------------------------------------------------------------------
All Charging Treatment IND/ Other Charging Individual Patient/
Category Requests Protocol Requests Requests Emergency Requests
----------------------------------------------------------------------------------------------------------------
Number of charging 22.6 1.1 15.6 5.9
requests
----------------------------------------------------------------------------------------------------------------
Percent of all INDs 1.1% 0.05% 0.76% 0.29%
----------------------------------------------------------------------------------------------------------------
Average number of .................... 4.6 55 659
submissions
----------------------------------------------------------------------------------------------------------------
Percent of submissions .................... 23.9% 28.4% 0.9%
----------------------------------------------------------------------------------------------------------------
One comment submitted in response to the proposed rule provided an
estimate of the number of patients that might be affected by this final
rule. As part of our response, we have generated estimates of the
number of patients receiving investigational drugs and subject to
charging requests under current rules, in place since 1987.
Based on the information presented in table 1 of this document, FDA
currently receives an average of 5.9 charging requests for individual
patient or emergency INDs per year. Thus, approximately 5.9 individuals
per year may currently be charged for investigational drugs under
single patient or emergency INDs. FDA believes that it is reasonable to
assume that a typical intermediate-size patient population will include
between 10 and 100 individuals. Given that FDA currently receives an
average of 15.6 charging requests for such submissions per year, we
estimate that between 156 and 1,560 individuals may currently be
charged for investigational drugs under intermediate-size patient
populations. A treatment IND or protocol can vary significantly in size
and may include between 100 and 10,000 patients. Thus, an average of
1.1 treatment IND or protocol charging requests per year could affect
between 110 and 11,000 individuals. Based on this information, FDA
estimates that between 272 and 12,566 individuals may currently be
charged for investigational drugs each year under rules in place since
1987. The wide range of these estimates reflects significant variation
in the number of patients enrolled in intermediate-size patient
populations, and treatment INDs or protocols. These estimates are
summarized in table 2 of this document.
Table 2.--Approximate Number of Individuals Affected Annually by Charging Rules for Investigational Drugs in
Place Since 1987
----------------------------------------------------------------------------------------------------------------
Average Number of Minimum Number of Maximum Number of
Category Requests Number of Patients Individuals Individuals
----------------------------------------------------------------------------------------------------------------
Individual patient or 5.9 1 5.9 5.9
emergency IND
----------------------------------------------------------------------------------------------------------------
Small patient population/ 15.6 10--100 156 1,560
other
----------------------------------------------------------------------------------------------------------------
Treatment IND or 1.1 100--10,000 110 11,000
protocol
----------------------------------------------------------------------------------------------------------------
Total 272 12,566
----------------------------------------------------------------------------------------------------------------
E. Nature of the Impact
The final rule will affect patients who lack effective therapeutic
alternatives for serious diseases; sponsors that develop drugs to treat
such diseases; and FDA in determining whether to authorize charging for
investigational drugs. By clarifying requirements and establishing the
full range of situations in which it may be appropriate to charge for
an investigational drug, the final rule will improve patient access by
providing a financial incentive for sponsors to make promising
therapies more widely available. Thus, this final rule should help to
facilitate patient access to drugs that could not be provided without
charging and permit sponsors to study drugs that might otherwise be too
costly to develop.
By describing in regulation the full range of treatment use
situations in which charging for an investigational drug may be
permitted, this final rule will likely increase the volume of charging
requests for treatment use somewhat. However, by clarifying the
circumstances under which charging will be permitted and specifying the
types of costs that sponsors can recover, this final rule should also
make the process of obtaining authorization to charge more transparent
and more efficient. Given the small percentage of all INDs that include
charging requests, FDA believes that the impact of the final rule will
be small.
This final rule could also increase treatment expenses for some
patients who obtain investigational drugs for which charging is
permitted or for third-party payers if they choose to reimburse
patients for some or all of the costs of such drugs. The agency
believes that such costs will not be excessive and will
[[Page 40895]]
be justified by the primary benefit of this final rule, making
investigational drugs available for treatment use that could not
otherwise be made available without charging. The potential impact of
specific provisions of the final rule is discussed in greater detail in
the following paragraphs.
1. Charging in a Clinical Trial
Since 1987, FDA regulations have permitted charging for
investigational drugs in clinical trials intended to support marketing
approval. This final rule is intended only to clarify the situations in
which charging for a sponsor's investigational drug in such a clinical
trial is appropriate. Therefore, FDA does not expect this final rule to
have a substantial effect on the number of requests to charge for
sponsors' investigational drugs in clinical trials to support initial
marketing approval.
Based on comments received, FDA has elected not to require sponsors
who must obtain an approved drug from another entity for use as an
active control or in combination with the sponsor's drug to obtain
authorization to charge for the drug. In addition, FDA has elected not
to require sponsors who must obtain an approved drug from another
entity for a study of the approved drug (e.g., a study of a new use) to
obtain authorization to charge for the drug. Under this final rule,
such sponsors can charge for investigational drugs under these
circumstances at their own discretion. Therefore, our original
conclusion in the proposed rule that there would not be a substantial
impact on the number of charging requests in clinical trial situations
is unchanged in the final rule.
2. Charging for Expanded Access Uses Described Under Final Subpart I
One comment submitted in response to the proposed rule provided an
estimate of the number of patients that might be affected by this final
rule. As part of our response, we have generated estimates of the
number additional patients that may be charged for investigational
drugs under this final rule. Information presented in tables in the
analysis of impacts section of the expanded access final rule,
published elsewhere in this issue of the Federal Register, will be used
to generate these estimates.
FDA estimates that the expanded access final rule will generate
between 132 and 395 additional single patient or emergency IND
submissions per year. Information presented in table 1 of this document
indicates that approximately 0.9 percent of all single patient or
emergency INDs are associated with charging requests. Thus, the agency
estimates that this final rule will generate between 1.2 (1.2 = 132 x
0.009) and 3.5 (3.5 = 395 x 0.009) additional charging requests for
single patient or emergency INDs. These figures imply that
approximately 1.2 to 3.5 additional patients may be charged each year
for investigational drugs as a result of this final rule.
Similarly, the agency estimates that the expanded access final rule
will generate between 3 and 27 additional intermediate-size patient
population IND submissions per year. Information presented in table 1
of this document indicates that approximately 28.4 percent of all such
IND submissions are associated with charging requests. Therefore, the
agency estimates that this final rule will generate between 0.85 (0.85
= 3 x 0.284) and 7.67 (7.67 = 27 x 0.284) additional charging requests
for intermediate-size patient population submissions per year. The
agency believes it is reasonable to assume that an intermediate-size
patient population will generally include between 10 and 100 individual
patients. These figures imply that approximately 8.5 (8.5 = 0.85 x 10)
to 767 (767 = 7.67 x 100) additional patients may be charged for
investigational drugs under intermediate-size patient populations each
year as a result of this final rule.
Because current regulations allowing charging for investigational
drugs under a treatment IND or protocol are not significantly altered
by this final rule, the agency does not anticipate that the final rule
will lead to a change in the number of requests to charge. Therefore,
FDA expects that between 10 (9.7 = 1.2 + 8.5) and 770 (770.5 = 3.5 +
767) additional patients may be charged for investigational drugs per
year as a result of this final rule. The results of these calculations
are summarized in table 3 of this document.
Table 3.--Approximate Number of Additional Individuals That May Be Charged for Investigational Drugs Under This
Final Rule
----------------------------------------------------------------------------------------------------------------
Number of Additional Number of Additional Number of Individuals Total Number of
Category Submissions Charging Requests per Request Individuals
----------------------------------------------------------------------------------------------------------------
Individual patient 132--395 1.2--3.5 1 1.2--3.5
or emergency IND
----------------------------------------------------------------------------------------------------------------
Small patient 3--27 0.85--7.67 10--100 8.5--767
population/other
----------------------------------------------------------------------------------------------------------------
Treatment IND or 0 0 100--10,000 0
protocol
----------------------------------------------------------------------------------------------------------------
Total 10--770
----------------------------------------------------------------------------------------------------------------
3. Costs Recoverable When Charging for an Investigational Drug
Finally, Sec. 312.8(d) of the final rule clarifies and better
explains the types of costs sponsors are permitted to recover through
charging. In particular, sponsors are limited to recovery of the direct
or marginal costs associated with making an investigational drug
available for the approved treatment use. Direct costs that are
recoverable under the final rule include per unit manufacturing costs
and shipping and handling costs. In addition, the final rule permits
sponsors to recover the costs of monitoring an expanded access
protocol, complying with IND reporting requirements, and other
administrative costs directly associated with expanded access for an
intermediate-size patient population and for a treatment IND or
treatment protocol.
4. Summary
The agency does not expect the number of requests to charge for a
sponsor's drug in a clinical trial, or to charge for an investigational
drug under a treatment IND or treatment protocol, to be affected
because the final rule does not significantly change the 1987 charging
rule. We estimate that final provisions allowing charging for single
patient or emergency INDs and intermediate-size patient populations
will affect between 10 and 770 individuals.
F. Benefits of the Final Rule
Because FDA currently has no data that will allow us to predict the
extent
[[Page 40896]]
to which the final amendments to existing regulations will generate
direct benefits for consumers, it is not possible to accurately
quantify the magnitude of any expected incremental benefits at this
time. We expect the number of requests to charge for investigational
drugs for expanded access use to increase somewhat. However, the number
of additional patients who will gain access to investigational drugs as
a result and the extent to which these patients will benefit from such
access are highly uncertain. Establishing in regulation all of the
situations in which charging is permissible and clearly specifying the
types of costs that are eligible for recovery will ease the
administrative burdens associated with obtaining authorization to
charge and will improve patient access to investigational drugs for
treatment use. Private benefits will accrue to individual patients
receiving the drugs, whereas additional social benefits will accrue if
others in society also value these individual patient benefits. Because
the overall impact of the final rule is expected to be small, the
potential for any new regulatory benefits is somewhat limited.
In formulating the final rule, FDA considered the interests of
patients, drug sponsors, and the general public. Concerning charging
for investigational drugs in expanded access settings, the agency
concluded that seriously ill patients could often benefit from
increased access to investigational drugs that have not yet been
approved for marketing. On the other hand, greater patient access to
investigational drugs outside of the clinical trial setting could have
the potential to delay approvals of drugs to treat serious diseases
(e.g., by reducing incentives for potential subjects to enroll in
clinical trials). If allowing charging were to adversely affect the
drug approval process, the general population will experience
diminished social benefits due to the reduced or delayed availability
of new therapies approved for marketing by FDA.
The final rule addresses this tension by allowing sponsors to
charge for investigational drugs in expanded access settings as long as
the sponsor provides reasonable assurance that charging will not
interfere with development of the drug for marketing approval. In this
way, the final rule will address the interests of those patient
populations that will benefit from having greater access to
investigational drugs and the broader interests of society in having
safe and effective therapies approved for marketing and widely
available.
The final rule limits sponsors to recovery of the direct or
marginal costs associated with making the drug available. Direct costs
that are recoverable under the final rule include per unit
manufacturing costs and shipping and handling costs. Indirect or fixed
costs incurred for joint or common objectives and physical plant and
equipment expenditures for producing marketable quantities of the drug
are specifically excluded under the cost recovery provisions of the
final rule. The agency believes that these cost recovery provisions
will prevent sponsors from inappropriately shifting the normal
financial risks associated with new drug development onto patients when
they charge for drugs in clinical trial settings. For expanded access
use, the limitation to direct cost recovery will also ensure that drug
development costs that properly belong to sponsors are not shifted to
patients.
G. Costs of the Final Rule
Although the final rule largely clarifies current agency practice,
some additional paperwork costs will be incurred to the extent that the
rule increases the total number of sponsor requests to charge patients
for investigational drugs. The information requirements associated with
the final rule are not expected to impose a significant burden. Drug
sponsors who wish to charge for investigational drugs will need to
review the rule to become familiar with its provisions and to gather
the evidence and information necessary to support charging requests.
Because of the lack of data described previously in this document, we
are unable to generate quantitative estimates of compliance costs at
this time. The agency expects that any incremental cost burdens will
likely be small and widely dispersed among affected entities for a
number of reasons.
First, regulations covering charging for investigational drugs in
clinical trials and under treatment INDs or treatment protocols have
been in place since 1987. As a result, the primary incremental impact
of the final rule will be limited to the new charging provisions for
the new types of expanded access for treatment use described under
final subpart I of part 312. Second, the agency does not expect that
these final charging provisions will lead to a large increase in the
total number of charging requests. Because it is not usually
extraordinarily expensive to make an investigational drug available to
a single patient or a limited number of patients, the agency does not
anticipate that the number of charging requests for expanded access to
investigational drugs for single patients or intermediate-size patient
populations will increase substantially. Finally, requests to charge
are relatively infrequent and the expense necessary to prepare a
charging request will ordinarily be small compared to the overall cost
of preparing the expanded access submission.
The agency estimates that, on average, 48 hours will be needed to
prepare a request to charge under the final rule. This estimate is
based on FDA's experience in reviewing charging requests under the 1987
charging rule and on a projection of the increased paperwork burden
associated with the final rule.
FDA's experience implies that 80 percent, or about 38 hours, of
this burden will be associated with establishing that the amount
proposed to be charged is limited to the direct costs of making the
drug available. The agency believes that the cost justification portion
of the charging request will need to be performed by a cost accountant
qualified to assess the direct costs of charging. Information available
on the Internet indicates that median total compensation for a Cost
Accountant IV (senior level) is approximately $117,000 per year in 2008
or about $56 per hour ($116,857 / 2,080 hours).\3\ Thus the cost
associated with certifying the amount to be charged is expected to be
about $2,130 ($56 per hour x 38 hours) per charging request.
---------------------------------------------------------------------------
\3\ See http://swz.salary.com/salarywizard/layoutscripts/swzl_newsearch.asp, last viewed 7/10/08. (FDA has verified the Web site
address, but FDA is not responsible for any subsequent changes to
the Web site after this document publishes in the Federal Register.)
---------------------------------------------------------------------------
The remaining burden (20 percent or about 10 hours) for the
preparation of a charging request will consist of a brief demonstration
that the criteria for charging that are not related to the amount to be
charged have been met. When the request is to charge for a drug used in
a clinical trial, this information will ordinarily be available as part
of the normal drug development process. When the request is to charge
for a drug for expanded access, the primary criterion is to show that
charging will not interfere with development of the drug for marketing.
FDA believes that preparation of this portion of the charging request
will likely be performed by a mid-level regulatory affairs specialist.
Information available on the Internet indicates that the total median
compensation for a Regulatory Affairs Specialist II (intermediate
level) is approximately $100,000 or about $48 per hour in 2008
($99,930/2,080
[[Page 40897]]
hours).\4\ Thus, the cost to demonstrate that a charging request meets
appropriate criteria is about $480 (10 hours x $48 per hour) per
charging request.
---------------------------------------------------------------------------
\4\ See http://swz.salary.com/salarywizard/layoutscripts/swzl_newsearch.asp, last viewed 7/10/08. (FDA has verified the Web site
address, but FDA is not responsible for any subsequent changes to
the Web site after this document publishes in the Federal Register.)
---------------------------------------------------------------------------
Based on the figures presented previously in this document, FDA
estimates the cost to prepare and submit a charging request will thus
be about $2,610 ($2,130 + $480). The total costs associated with this
final rule will probably be widely dispersed among affected entities
because charging requests are rare, and thus, a particular sponsor will
be expected to submit such a request very infrequently.
A significant concern with the final rule relates to the potential
effect on access to investigational therapies for economically
disadvantaged individuals and the uninsured. Allowing sponsors to
charge could impose a significant financial burden on many seriously
ill individuals who lack therapeutic alternatives and could preclude
access by some needy patients. However, in the past, many companies
that have provided investigational drugs for treatment use have often
included assistance programs to cover the costs for those who could not
otherwise afford them. FDA expects this practice will continue.
H. Minimizing the Impact on Small Entities
The agency does not believe that the final rule will have a
significant economic impact on a substantial number of small entities.
Nevertheless, in the proposed rule, we recognized our uncertainty
regarding the number and size distribution of affected entities, as
well as the economic impact of the final rule on those entities, and
requested detailed comment on these important issues. We received no
comments that would cause us to change our determination that the final
rule will not have a significant economic impact on a substantial
number of small entities.
According to agency records, the majority of treatment INDs and
treatment protocols (approximately 92 percent) are submitted by
commercial sponsors and government agencies that are not likely to meet
Small Business Administration (SBA) criteria defining a small entity in
the relevant industry sector. Thus, the agency believes that the vast
majority of requests to charge under expanded access submissions will
not be submitted by small entities. Most single patient INDs are for
treatment use and are submitted by individual physicians, and these
entities will be classified as small entities. However, for reasons
discussed previously, we do not anticipate that the volume of requests
to charge for individual patient expanded access will increase
substantially. Because expanded access for intermediate-size patient
populations is not currently tracked by the agency, no data exist that
will allow the agency to identify either the number of sponsors in this
category or the number that will qualify as small entities. FDA
believes that requests to charge for investigational drugs in clinical
trials of a sponsor's drug will generally be submitted by large
commercial drug sponsors. In sum, the agency believes that some
entities submitting charging requests will meet SBA small businesses
criteria. As discussed in section VI.E of this document, the agency
expects that any incremental burden associated with the final rule will
be small and widely dispersed among affected entities.
I. Alternatives
FDA considered several alternatives to the final rule. Each is
discussed in the following paragraphs:
Do not revise the 1987 charging rule.
FDA considered and rejected this alternative because the 1987
charging rule does not address all of the types of expanded access to
investigational drugs for treatment use specified under final subpart I
of part 312. Furthermore, the cost recovery provisions in the 1987
charging rule were vague and ambiguous and thus in need of
clarification.
Retain the proposed requirements that would have required
sponsors who must obtain an approved drug from another entity for use
in the study evaluation to obtain authorization from FDA to charge.
FDA considered this alternative. However, FDA believes the comments
made a persuasive case for not requiring authorization to charge in
these settings. The most common requests to charge are for approved
drugs in trials when the drugs must be obtained from another company.
For reasons discussed in section VI.C of this document, FDA believes
that charging for investigational drugs in these situations is
appropriate without prior authorization from FDA.
Do not permit charging for expanded access for individual
patients or for intermediate-size patient populations.
FDA considered not revising the 1987 charging rule concerning
charging for treatment use and thus permitting charging only for
treatment INDs and treatment protocols. However, elsewhere in this
issue of the Federal Register, the agency is finalizing its regulations
concerning the treatment use of investigational drugs to specifically
authorize expanded access for individual patients and for intermediate-
size patient populations. The purpose of those regulations is to expand
access to investigational drugs. In some situations, permitting
sponsors to charge for investigational drugs to be used by individual
patients or by intermediate-size patient populations may be the only
way that such patients can receive access to these therapies because
sponsors may not be willing to provide the drugs free of charge. Thus,
consistent with the philosophy of the expanded access rule, the agency
decided to permit charging for investigational drugs in all expanded
access settings to improve access to investigational drugs for patients
with serious diseases who lack other therapeutic options and who may
benefit from such therapies.
VII. Paperwork Reduction Act of 1995
This final rule contains information collection requirements that
are subject to review by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (the
PRA). The title, description, and respondent description of the
information collection provisions are shown in the following paragraphs
with an estimate of the annual reporting burden. Our estimate includes
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
each collection of information.
Title: Charging for Investigational Drugs Under an IND
Description: The final rule describes the types of investigational
uses for which a sponsor may be able to charge, including uses for
which charging was not previously expressly permitted, and the criteria
for allowing charging for the identified investigational uses. The rule
authorizes sponsors to request to charge for investigational drugs used
in clinical trials and for investigational drugs for expanded access
for treatment use. The rule also describes the types of costs that can
be recovered when charging for an investigational drug.
Section 312.8(a)(1) provides that a sponsor who wishes to charge
for an investigational drug must meet the criteria applicable to the
specific sections of the proposal relating to
[[Page 40898]]
charging in a clinical trial or charging for expanded access.
Section 312.8(b) describes the requirements for charging in a
clinical trial.
Section 312.8(b)(1) describes criteria for charging for the
sponsor's own drug in a clinical trial. To charge in this situation,
the sponsor must show the following three things. The sponsor must:
Provide evidence that the drug has a potential clinical
benefit that, if demonstrated in the clinical investigations, would
provide a significant advantage over available products in the
diagnosis, treatment, mitigation, or prevention of a disease or
condition;
Demonstrate that the data to be obtained from the clinical
trial would be essential to establishing that the drug is effective or
safe for the purpose of obtaining initial approval of a drug, or would
support a significant change in the labeling of an approved drug (e.g.,
new indication, inclusion of comparative safety information); and
Demonstrate that the clinical trial could not be conducted
without charging because the cose of the drug is extraordinary to the
sponsor.
Section 312.8(c) describes criteria for charging for an
investigational drug in an expanded access setting. The general
criterion to charge for expanded access for treatment use is that the
sponsor provide reasonable assurance that charging will not interfere
with developing the drug for marketing approval.
For treatment use under a treatment IND or treatment protocol, the
sponsor must also provide the following:
Evidence of sufficient enrollment in any ongoing clinical
trial(s) needed for marketing approval to reasonably assure FDA that
the trial(s) will be successfully completed as planned,
Evidence of adequate progress in the development of the
drug for marketing approval, and
Information submitted under its general investigational
plan (Sec. 312.23(a)(3)(iv)) specifying the drug development
milestones the sponsor plans to meet in the next year.
Section 312.8(a)(2) provides that a sponsor who wishes to charge
for an investigational drug must justify the amount to be charged.
Section 312.8(d) describes more specifically the costs that are
potentially recoverable. Section 312.8(d)(1) provides that a sponsor
may recover only the direct costs of making the investigational drug
available. Section 312.8(d)(1)(i) defines direct costs as costs
incurred by a sponsor that can be specifically and exclusively
attributed to providing the drug for the investigational use for which
FDA has authorized cost recovery. Direct costs include costs per unit
to manufacture the drug (e.g., raw materials, labor, and nonreusable
supplies and equipment used to manufacture the quantity of drug needed
for the use for which charging is authorized) or costs to acquire the
drug from another manufacturing source and direct costs to ship and
handle (e.g., store) the drug.
Section 312.8(d)(1)(ii) states that indirect costs include costs
that are incurred primarily to produce the drug for commercial sale.
Such costs include, for example, costs for facilities and equipment
that are used to manufacture the supply of investigational drug but
that are primarily intended to produce large quantities of drug for
eventual commercial sale and research and development, administrative,
labor, or other costs that would be incurred even if the clinical trial
or expanded access for which charging is authorized did not occur.
Section 312.8(d)(2) provides that when the sponsor is charging for
making the drug available for expanded access for an intermediate-size
patient population or for a treatment IND or protocol under subpart I,
the sponsor may also recover the costs of monitoring the protocol,
complying with IND reporting requirements, and other administrative
costs directly associated with the expanded access in addition to the
sponsor's direct costs.
Description of Respondents: Licensed physicians and manufacturers,
including small business manufacturers.
Estimates of Reporting Burden: Table 4 of this document presents
the estimated annualized reporting burden for the total number of
charging requests we expect to receive under the final rule. The
estimates in table 4 have been derived in the following manner. Based
on baseline data presented in section VI of this document, ``Analysis
of Economic Impacts,'' we estimate that we will receive a total of
approximately 34 charging requests annually under the final rule. This
estimate is the sum of the average number of charging requests we
currently receive annually (i.e., 22.6), plus the additional charging
requests, as described in the analysis of economic impacts, that we
expect to receive annually as a result of the amendments in the final
rule (i.e., 3.5 + 7.67). Concerning the number of respondents, our
experience has been that, in general, a single sponsor does not make
multiple requests to charge for investigational drugs in the same year.
However, we anticipate that multiple requests may increase somewhat if,
as we expect, the number of individual patient treatment uses
increases. Thus, we have assumed that the number of annual respondents
will be approximately 30.
The largest portion of the paperwork burden associated with the
final rule is to justify the request to charge by showing that the
amount proposed to be charged is limited to the direct costs of making
the drug available (Sec. 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 (Sec. 312.8(d)(2)). The sponsor also needs to
support its suggested charge for these expenses. The remaining portion
of the paperwork burden associated with the final rule is to show that
the criteria applicable to the specific type of charging request (i.e.,
the type of clinical trial (Sec. 312.8(b)) or type of expanded access
(Sec. 312.8(c))) have been met. Thus, we estimate that the average
number of hours needed to prepare a request to charge for an
investigational drug under the final rule is 48. This estimate is based
on our experience in reviewing charging requests in the past and, as
explained previously, on a projection of the increased paperwork burden
associated with the final rule.
Table 4.--Estimated Annual Reporting Burden\1\
----------------------------------------------------------------------------------------------------------------
Number of Number of Responses Total Annual Hours per
21 CFR Section Respondents per Respondent Responses Response Total Hours
----------------------------------------------------------------------------------------------------------------
312.8 30 1.13 34 48 1,632
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection.
[[Page 40899]]
The information collection provisions of this final rule have been
submitted to OMB for review. Prior to the effective date of this final
rule, FDA will publish a notice in the Federal Register announcing
OMB's decision to approve, modify, or disapprove the information
collection provisions in this final rule. An agency may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless it displays a currently valid OMB control number.
VIII. Federalism
FDA has analyzed this final rule in accordance with the principles
set forth in Executive Order 13132. FDA has determined that the rule
does not contain policies that have substantial direct effects on the
States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Accordingly, the agency has concluded
that the rule does not contain policies that have federalism
implications as defined in the Executive order and, consequently, a
federalism summary impact statement is not required.
List of Subjects in 21 CFR Part 312
Drugs, Exports, Imports, Investigations, Labeling, Medical
research, Reporting and recordkeeping requirements, Safety.
0
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
312 is amended as follows:
PART 312--INVESTIGATIONAL NEW DRUG APPLICATION
0
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.
0
2. Section 312.7 is amended by removing paragraph (d) and by revising
the section heading to read as follows:
Sec. 312.7 Promotion of investigational drugs.
* * * * *
0
3. Section 312.8 is added to subpart A to read as follows:
Sec. 312.8 Charging for investigational drugs under an IND.
(a) General criteria for charging. (1) A sponsor must meet the
applicable requirements in paragraph (b) of this section for charging
in a clinical trial or paragraph (c) of this section for charging for
expanded access to an investigational drug for treatment use under
subpart I of this part, except that sponsors need not fulfill the
requirements in this section to charge for an approved drug obtained
from another entity not affiliated with the sponsor for use as part of
the clinical trial evaluation (e.g., in a clinical trial of a new use
of the approved drug, for use of the approved drug as an active
control).
(2) A sponsor must justify the amount to be charged in accordance
with paragraph (d) of this section.
(3) A sponsor must obtain prior written authorization from FDA to
charge for an investigational drug.
(4) FDA will withdraw authorization to charge if it determines that
charging is interfering with the development of a drug for marketing
approval or that the criteria for the authorization are no longer being
met.
(b) Charging in a clinical trial--(1) Charging for a sponsor's
drug. A sponsor who wishes to charge for its investigational drug,
including investigational use of its approved drug, must:
(i) Provide evidence that the drug has a potential clinical benefit
that, if demonstrated in the clinical investigations, would provide a
significant advantage over available products in the diagnosis,
treatment, mitigation, or prevention of a disease or condition;
(ii) Demonstrate that the data to be obtained from the clinical
trial would be essential to establishing that the drug is effective or
safe for the purpose of obtaining initial approval of a drug, or would
support a significant change in the labeling of an approved drug (e.g.,
new indication, inclusion of comparative safety information); and
(iii) Demonstrate that the clinical trial could not be conducted
without charging because the cost of the drug is extraordinary to the
sponsor. The cost may be extraordinary due to manufacturing complexity,
scarcity of a natural resource, the large quantity of drug needed
(e.g., due to the size or duration of the trial), or some combination
of these or other extraordinary circumstances (e.g., resources
available to a sponsor).
(2) Duration of charging in a clinical trial. Unless FDA specifies
a shorter period, charging may continue for the length of the clinical
trial.
(c) Charging for expanded access to investigational drug for
treatment use. (1) A sponsor who wishes to charge for expanded access
to an investigational drug for treatment use under subpart I of this
part must provide reasonable assurance that charging will not interfere
with developing the drug for marketing approval.
(2) For expanded access under Sec. 312.320 (treatment IND or
treatment protocol), such assurance must include:
(i) Evidence of sufficient enrollment in any ongoing clinical
trial(s) needed for marketing approval to reasonably assure FDA that
the trial(s) will be successfully completed as planned;
(ii) Evidence of adequate progress in the development of the drug
for marketing approval; and
(iii) Information submitted under the general investigational plan
(Sec. 312.23(a)(3)(iv)) specifying the drug development milestones the
sponsor plans to meet in the next year.
(3) The authorization to charge is limited to the number of
patients authorized to receive the drug under the treatment use, if
there is a limitation.
(4) Unless FDA specifies a shorter period, charging for expanded
access to an investigational drug for treatment use under subpart I of
this part may continue for 1 year from the time of FDA authorization. A
sponsor may request that FDA reauthorize charging for additional
periods.
(d) Costs recoverable when charging for an investigational drug.
(1) A sponsor may recover only the direct costs of making its
investigational drug available.
(i) Direct costs are costs incurred by a sponsor that can be
specifically and exclusively attributed to providing the drug for the
investigational use for which FDA has authorized cost recovery. Direct
costs include costs per unit to manufacture the drug (e.g., raw
materials, labor, and nonreusable supplies and equipment used to
manufacture the quantity of drug needed for the use for which charging
is authorized) or costs to acquire the drug from another manufacturing
source, and direct costs to ship and handle (e.g., store) the drug.
(ii) Indirect costs include costs incurred primarily to produce the
drug for commercial sale (e.g., costs for facilities and equipment used
to manufacture the supply of investigational drug, but that are
primarily intended to produce large quantities of drug for eventual
commercial sale) and research and development, administrative, labor,
or other costs that would be incurred even if the clinical trial or
treatment use for which charging is authorized did not occur.
(2) For expanded access to an investigational drug for treatment
use under Sec. Sec. 312.315 (intermediate-size patient populations)
and 312.320 (treatment IND or treatment protocol), in
[[Page 40900]]
addition to the direct costs described in paragraph (d)(1)(i) of this
section, a sponsor may recover the costs of monitoring the expanded
access IND or protocol, complying with IND reporting requirements, and
other administrative costs directly associated with the expanded access
IND.
(3) To support its calculation for cost recovery, a sponsor must
provide supporting documentation to show that the calculation is
consistent with the requirements of paragraphs (d)(1) and, if
applicable, (d)(2) of this section. The documentation must be
accompanied by a statement that an independent certified public
accountant has reviewed and approved the calculations.
Dated: July 20, 2009.
Jeffrey Shuren,
Associate Commissioner for Policy and Planning.
[FR Doc. E9-19004 Filed 8-12-09; 8:45 am]
BILLING CODE 4160-01-S