Regulatory Focus™ > News Articles > FDA Draft Guidance: When is it Acceptable to Charge for an Investigational Drug?

FDA Draft Guidance: When is it Acceptable to Charge for an Investigational Drug?

Posted 09 May 2013 | By Alexander Gaffney, RAC

What is an investigation drug worth? In a philosophical sense, an investigational drug may be priceless to a patient facing the prospect of certain death, offering them additional time, reduced suffering or a new chance at life. But for companies in the process of studying an investigational product, that drug has a very real cost. Now a new draft guidance published by the US Food and Drug Administration (FDA) wants to answer a basic question: Can a company charge a patient for taking an investigational drug?


The pharmaceutical industry is generally not in the practice of charging patients for access to its investigational therapies, particularly when they are enrolled into an approved clinical trial for a product. With rare exception, companies want to make it easier, not harder, to enroll in a trial, and charging for an investigational therapy would raise significant barriers for some patients.

But that's the general practice of the industry. Some sponsors of investigational drugs operating under an FDA-approved investigational new drug (IND) application do charge consumers for their products. While the practice is frowned upon by some, it is nevertheless used in some cases to charge patients for access to therapies that occur under a compassionate use program, and in others when the cost of providing the product is prohibitively high in relative terms for the company.

FDA explains in its draft guidance that FDA has permitted sponsors to charge for an investigation drug since 1987 ("the 1987 charging rule"), but in 2009 revised that rule for what it said were three main reasons: Clinical trials had changed significantly in the last two decades, criteria needed to be developed to allow for expanded access programs, and the types of costs that could be recovered from patients needed to be narrowed.

New Guidance

The new draft guidance, Charging for Investigational Drugs under an Investigational New Drug Application, is set up as a question-and-answer document meant to give a brief overview of some of the more common questions that come out of FDA's 2009 Charging Rule.

Some of the questions covered in the document (and summary answers):

  • May a sponsor charge for its own investigational drug, and under what circumstances? (Yes. It must meet a four-part test: Evidence of clinical benefit, data from the trial is of essential use to approval, trial could not be conducted without charging, and the amount being charged is reasonable)
  • How long does FDA take to respond to requests to charge for an investigational drug? (No regulatory timeframe, but the practice is 30 days)
  • Who must submit a request to charge for an investigational drug? (Only the sponsor)
  • Once a request is approved by FDA, who may the sponsor charge? (FDA doesn't decide; Could include patients, government payors or insurance providers)
  • When is a drug of "extraordinary cost" to the sponsor? (The cost of providing a drug can be extraordinary if the drug is complex to manufacture, uses scarce materials, must be manufactured in large quantity, or a combination thereof)
  • Does FDA consider the resources of a company when considering whether to allow it to charge? (Yes)
  • Must a company obtain approval to charge for its drug? (Yes)
  • If the sponsor purchases another drug for use in the trial, must it obtain FDA approval to charge for that drug? (No)
  • If the sponsor's drug is used as one part of a concomitant therapy, must it obtain FDA approval to charge for the drug? (Not if it's used for an approved use, otherwise it must do so)
  • How can the sponsor charge for a drug if the study is blinded? Wouldn't that potentially break the blind? (Figure out ways to do so without compromising the blind)
  • How long may a sponsor charge for a drug? (The duration of the trial and no longer)
  • Can a sponsor charge for expanded access (aka compassionate use) schemes? (Yes. Sponsors must provide FDA with assurance that charging won't interfere with its existing trials and that its calculated cost is reasonable)
  • For what amount of time may a sponsor charge for an expanded access drug? (One year after FDA's authorization unless a shorter timeframe is authorized)
  • Can an expanded access charging scheme be extended? (Yes. Sponsors must submit a request to FDA satisfying the same original conditions)
  • What costs are reasonable to recover when charging for access? (Only the direct costs-manufacturing, shipping, monitoring, third-party administration, etc-of making the drug available)
  • What documentation needs to be made available to support a cost calculation? (See 21 CFR 312.8(d)(3))

The entire document may be found here. Comments on the draft guidance are due by 8 July 2013.

Regulatory Focus newsletters

All the biggest regulatory news and happenings.