Navigating the clinical trial landscape requires balancing groundbreaking innovation with extreme financial burden, particularly when manufacturing costs threaten to stall development. The FDA offers a formal pathway to recover direct costs for investigational drugs and devices without triggering allegations of premature commercialization, whereby the sponsor can get FDA’s approval to charge for its investigational drugs or devices. However, the federal Right to Try (RTT) laws allow another way for sponsors to charge patients and bypass agency’s cost recovery oversight entirely, creating a major regulatory loophole in how investigational products are monetized.
The FDA’s processes establish clear boundaries: cost recovery is meant to prevent extraordinary expenses from halting promising therapies, not to generate commercial profit or inappropriately shift standard development costs onto subjects. For Investigational New Drugs (INDs), obtaining authorization involves a rigorous, step-by-step regulatory workflow:
- Application Submission & Evidence: Sponsors must submit a formal charging request via an IND amendment (or as part of an original expanded access IND). The request must prove three clinical pillars: the drug offers a potential significant clinical advantage over existing therapies, trial data is essential for marketing approval or labeling changes, and the trial could not proceed without charging due to “extraordinary costs” stemming from manufacturing complexity, resource scarcity, or required volume.
- Financial Justification & CPA Verification: Sponsors can only recover direct costs, such as raw materials, direct labor, non-reusable supplies, and shipping, while excluding indirect costs like facility overhead or routine R&D. Furthermore, 21 CFR 312.8(d)(3) mandates that supporting financial calculations must be accompanied by an independent Certified Public Accountant (CPA) statement verifying compliance. (For third-party sourced expanded access drugs, invoices or receipts may suffice).
- Internal CBER Review Workflow: Once received, the Regulatory Project Manager (RPM) routes the submission to clinical, chemistry, manufacturing, and controls (CMC), and occasionally bioethics reviewers. CBER aims to render a decision within 30 days.
- Authorization & Duration Management: If approved, charging for a clinical trial can continue for the duration of the trial, while expanded access approvals are generally capped at one year and limited to a specific patient count. Extensions require an amendment submitted at least 60 days prior to expiration.
For Investigational Device Exemptions (IDEs), the framework is streamlined but strict. Sponsors must detail the proposed price in the original IDE application and demonstrate that it reflects only manufacturing, research, development, and handling costs, ensuring zero commercial profit. Unlike INDs, IDE cost recovery does not carry a fixed expiration date or require CPA attestation under this specific SOPP.
The FDA’s SOP for reviewing charging requests is an invaluable strategic tool for prospective sponsors seeking permission to charge for investigational products. By examining the explicit instructions given to CBER reviewers, sponsors can align their submissions directly with what agency staff are trained to look for. First, it eliminates guesswork regarding line-item eligibility by clarifying that only direct manufacturing and shipping costs are recoverable for clinical trials, whereas intermediate or large expanded access protocols can also include administrative and monitoring fees. Second, it alerts sponsors to procedural landmines, such as failing to include an independent CPA attestation or forgetting to detail participant costs in informed consent forms under 21 CFR 50.25(b)(3). Third, it provides realistic operational timelines, enabling sponsors to plan 30-day decision windows and 60-day renewal buffers into their clinical strategy.
While both the compassionate use and RTT pathways permit sponsors to charge for investigational products, they differ significantly in regulatory oversight, accounting rigor, and procedural hurdles:
| Right to Try Act | FDA Expanded Access (21 CFR § 312.8) | |
| FDA Pre-Authorization | Not required. Sponsors may charge directly without submitting a cost request to FDA. | Mandatory. Sponsors must submit a formal charging request and obtain prior written authorization from FDA. |
| Cost Verification Requirements | Self-calculated. Statutory language limits charges to direct costs, but no CPA review or submission to FDA is required prior to charging. | Independent CPA Audit. Calculation of direct costs must be audited and verified by an independent Certified Public Accountant (CPA). |
| Duration of Authorization | Indefinite (for as long as the product remains eligible under the law). | 1 Year. Authorization expires after 12 months and requires annual re-authorization submissions. |
| Scope of Recoverable Costs | Direct manufacturing and supply costs only (raw materials, dedicated labor, shipping/handling). Profit/overhead is prohibited. | Direct costs (single patient); plus monitoring, IRB, and administration costs for intermediate/treatment IND populations. Profit is strictly prohibited. |
| Development Safeguards | Minimal regulatory check; statutory rule prohibits charging from exceeding direct costs. | FDA evaluates whether charging will interfere with ongoing clinical trial enrollment or overall drug development. |
Operational Takeaways for Sponsors
- Procedural Friction: Expanded Access imposes a higher administrative burden on sponsors (CPA audits, detailed cost accounting, annual renewal filings). Right to Try bypasses FDA oversight entirely, making the charging process administratively simpler.
- Expansion / Expanded Costs: Under intermediate or treatment-level Expanded Access INDs, FDA permits sponsors to recover broader operational expenses (e.g., protocol monitoring, regulatory reporting, or third-party administration fees). Right to Try limits charges strictly to direct manufacturing and delivery costs.
- Payer / Reimbursement Reality: Neither pathway forces commercial insurers or government payors (Medicare/Medicaid) to cover the cost of the drug or its administration. Regardless of the regulatory pathway chosen, patients bear full financial responsibility unless the sponsor chooses to absorb or discount the fees.
Ultimately, the FDA’s review ensures regulatory compliance for sponsors passing through the cost of high-cost investigational products to patients through traditional FDA pathways. However, statutory mechanisms like the Right to Try loophole allow sponsors to bypass this accounting rigor and agency pre-approval altogether, creating a stark contrast in oversight. Ultimately both pathways are designed to help patients get access to expensive investigational drugs for life-threatening conditions where all other options have been exhausted. So, for sponsors prioritizing long-term regulatory credibility and agency alignment, relying on the FDA’s structured framework may be safer standard than the unmonitored RTT pathway.
