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

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

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

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

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

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

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

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

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

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

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.

    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.

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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

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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.
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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.

* * * * *
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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

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