Tell HN: An inside view of Montana's new biotech law — SkimNews
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- Montana's SB535 permits physicians to deliver experimental treatments outside a trial after FDA Phase 1 under an active IND, provided a state-registered private review board (ETRB) approves the protocol and the treatment is given at a state-licensed clinic — with sponsors and clinics explicitly allowed to charge.
- The author's company formed Montana's first ETRB, funded by review fees like an IRB, with no equity in applicants, no payment by outcome, a public COI policy, published decision letters, and an annual outcome report requirement.
- Federal right-to-try and expanded-access programs do not let sponsors charge, creating a risk-plus-expense structure that SB535 reverses, according to the source.
- Economist Alex Tabarrok called SB535 "the most important regulatory innovation in drug approval in my lifetime," per the author's citation of Marginal Revolution.
- The source cites Williams et al. (PLOS ONE 2015) finding that 68% of failed trials fail for commercial reasons rather than safety or efficacy, while overall only ~10% of post-Phase 1 drugs reach approval and drug-development costs have roughly doubled every 9 years under Eroom's Law.
- Trial recruitment today runs $50,000-$100,000 per patient, with federal rules capping what patients can be paid ("undue inducement") and forbidding profit; SB535 removes both constraints in Montana.
- Phase 1 biotechs stuck in the "Valley of Death" can now treat patients, negotiate payment, and collect real-world data to sharpen Phase 2/3 trial designs — the author's stated goal, not to skip FDA, but to lower the cost of evidence.
Why it matters: SB535 creates the first state-law pricing mechanism for experimental medicine in the US, letting Phase 1-stage biotechs monetize assets before full FDA approval. For the 68% of trials that fail commercially rather than for safety/efficacy, it offers a parallel revenue path that could reshape early-stage financing — though it depends on biotechs willing to operate ahead of full federal assurance.
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