First, this could be a confused reference to the fact that if the FDA allows a Phase 2 registrational trial and then subsequently approves the drug, it is possible to market the drug while still undertaking the Phase 3 trial required to confirm the Phase 2 results.
Of course, sometimes the Phase 3 trial doesn’t confirm the Phase 2 results. For example, earlier this year Sarepta received accelerated approval for a (once-only) gene therapy for DMD which it then priced at US$3.2m. This week, the company has announced that it failed to meet statistical significance on the Phase 3 trial’s primary endpoint.
The other possibility is it’s referring to the charging of participants for an investigational drug they are accessing during a clinical trial. This is rare, FDA authorization needs to be obtained, there are various conditions that need to be met and only drug manufacturing costs can be recovered.
This is what the FDA has to say on the matter…
Q4. When a sponsor uses its own investigational drug in a clinical trial, what requirements must the sponsor satisfy to charge for the drug?
A4: When a sponsor is using its own investigational drug, including an investigational use of its approved drug, in a clinical trial, a sponsor must do all of the following to obtain authorization to charge for the drug:
Provide evidence to FDA that the drug has a potential clinical benefit that, if demonstrated in clinical investigations, would provide a significant advantage over available products in the diagnosis, treatment, mitigation, or prevention of a disease or condition (21 CFR 312.8(b)(1)(i)).
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, or would support a significant change in the labeling of an approved drug (e.g., a new indication, inclusion of comparative safety information) (§ 312.8(b)(1)(ii)).
Demonstrate that the clinical trial could not be conducted without charging because the cost of the drug is extraordinary to the sponsor (§ 312.8(b)(1)(iii) (see also Q5 regarding extraordinary cost).
Provide documentation to support its calculation for cost recovery to show that the calculation is consistent with the requirements of § 312.8(d)(1). The documentation must be accompanied by a statement that an independent certified public accountant has reviewed and approved the calculation (§ 312.8(d)(3)).
Sponsors must meet all of these requirements and must obtain written authorization from FDA to charge before they begin to charge for an investigational drug (§ 312.8(a)(3)).
Q5: What constitutes extraordinary cost?
A5: As noted in A4, 21 CFR 312.8(b)(1)(iii) requires that the sponsor demonstrate that it could not conduct the clinical trial without charging for the investigational drug because the cost of the drug is extraordinary to the sponsor. Section 312.8(b)(1)(iii) also describes the reasons that the cost of a drug may be extraordinary. The cost of a drug may be considered extraordinary to a sponsor because of manufacturing complexity, scarcity of a natural resource, the large quantity of the drug needed (e.g., based on the size or duration of the trial), or some combination of these or other extraordinary circumstances (e.g., resources available to a sponsor) (§ 312.8(b)(1)(iii)).
Q6: Does FDA consider the financial resources available to a sponsor when determining whether the cost of providing its investigational drug in a clinical trial is extraordinary?
A6: Yes. The provision in 21 CFR 312.8(b)(1)(iii) describes the reasons that the cost of a drug might be extraordinary to the sponsor, including the resources available to a sponsor. For example, a cost that is considered extraordinary to a small start-up company may not be considered extraordinary to a large established company.
PTX Price at posting:
5.7¢ Sentiment: Hold Disclosure: Held
