top of page

Mar 14, 2024

New Guidance Offers Insight on Old Regulation

The FDA made the task of interpreting the multitude of regulations that apply to clinical trial sponsors a bit easier when it published updated guidance on charging patients for drugs used in clinical trials on February 14, 2024.  The purpose of this article is not to provide legal advice but to present the guidance and regulations applicable to clinical trial sponsors considering charging patients for the drugs used in clinical trials.


I. Background


The FDA’s updated guidance, Charging for Investigational Drugs Under an IND applies the FDA regulation of the same name: 21 C.F.R. § 312.8 Charging for investigational drugs under an IND.  The regulation and the guidance are divided into four primary sections: a) general criteria, b) charging for drugs used in a clinical trial, c) charging for expanded access to investigational drug for treatment use, and d) understanding what costs are recoverable when charging for an investigational drug.


A sponsor may charge for use of its investigational drug in a clinical trial and/or expanded use trial as long as the sponsor obtains prior written authorization from FDA.[1]  Sponsors should be aware that the FDA will withdraw its authorization “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.”[2]


Any sponsor that anticipates charging for its investigational drug undergoing a clinical trial must also “[p]rovide 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.”[3]  The sponsor must also:


(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. . .[4]


One of these burdens alone might be insurmountable for many clinical trial sponsors, but the structure of the regulation indicates that the conditions are inclusive of each other, and all of the elements must be satisfied for this regulation to apply. 


In addition, the regulation requires sponsors to “provide reasonable assurance that charging will not interfere with developing the drug for marketing approval.”[5]  Finally, part (d) of the regulation allows the sponsor to only “recover only the direct costs of making its investigational drug available.”[6] The full text of the regulation is not covered here, but it provides clarification on what constitutes “reasonable assurance” under subsection (c) and what may qualify as “direct costs” under subsection (d).

 

II. Updated FDA Guidance


The updated guidance takes the form of FAQs (i.e., “Frequently Asked Questions”) posed by a sponsor seeking authorization to charge patients for use of an investigative drug in a clinical trial. It includes a list of 23 questions directed to the specific areas of the regulation outlined above.  Some of the information covered in the guidance may be found directly in the regulations, and some of the information is new in anticipation of questions that sponsors and manufacturers may ask. 


For instance, the guidance restates the position from the regulation that a sponsor may receive authorization to charge for an investigational drug for one year, or less or more if the FDA specifically allows for this in its authorization.[7] This information can be found directly in 21 C.F.R. § 312.8(c)(4), so the guidance does not provide any clarification on this point.


In other instances, however, the guidance does expand upon the regulations.  For example, it illustrates when a sponsor may amortize the costs of its monitoring program for an intermediate-sized patient population or treatment IND over the course of the clinical study.[8]  The guidance also describes how a sponsor may amortize the costs of manufacturing a new drug over the course of the study.[9]  Neither of these scenarios are explicitly addressed in the regulations.


III. Practical Implications


Taken together, the regulatory requirements imposed on sponsors seeking FDA authorization to charge for drugs used in clinical trials pose considerable burdens on the sponsors.  The ability to collect these costs could result in reduced costs of a clinical trial for sponsors, which could mean the difference between whether or not they proceed with a clinical trial.  However, because the regulatory requirements serve to limit who may receive this authorization, not all sponsors who would like to charge for use of their drug in a clinical trial may do so.


The FDA’s updated guidance provides helpful clarification.  Clinical trial sponsors would be well-advised to read and understand the guidance because it might apply to their circumstances.  But even the updated guidance may not answer all the questions a sponsor might have on the application of 21 C.F.R. § 312.8 to their specific circumstances.  Sponsors should also reach out to Thompson PLLC if they are considering seeking authorization to charge patients for their drug in a clinical trial.


[1] 21 C.F.R. § 312.8(a)(3).

[2] 21 C.F.R. § 312.8(a)(4).

[3] 21 C.F.R. § 312.8(b)(1)(i). Emphasis added.

[4] 21 CFR § 312.8(b)(1)(ii)-(iii).

[5] 21 C.F.R. § 312.8(c)(1).

[6] 21 CFR § 312.8(d)(1).

[7] See, Charging for Investigational Drugs Under an IND Questions and Answers Guidance for Industry at Q:14, pg. 8.

[8] See, id. at Q:22, pg. 10.

[9] Id. at Q: 23, pg. 10-11.

Reach out to see how we can help.

80 South 8th St. 

Suite 900

Minneapolis, MN 55402

612-351-2228

  • LinkedIn

Thanks for submitting!

bottom of page