Montana passed a law called SB535. It builds on right-to-try (pre-approval access with informed consent, Phase 1 safety data etc.) but goes much further, fixing problems with those laws.
I contributed ideas to the law and am now implementing it through my company. I invested in biotech for years and watched companies struggle. I built the biotech ecosystem in Prospera as an alternative, concluded it was too early, and now think Montana is the best place to prove this.
Why this exists: When FDA approves a bad drug, heads roll. When it delays a good one, the deaths are statistical and nobody gets blamed ("invisible graveyard"). So the incentive is overcaution, which is why the cost per approved drug has roughly doubled every 9 years for decades ("Eroom's Law"). Founders are in the "Valley of Death" around Phase 1: grants are no longer available, and commercial money wants assurance the drug will pass the next trial. Only ~10% of post-Phase 1 drugs get approved, but 68% of failed trials don’t stop because they found lack of safety or efficacy but commercial reasons (Williams et al., PLOS ONE 2015). Federal Right to Try and Expanded Access haven't fixed this. Federal reform is super-hard.
What Montana allows: A physician can give an experimental treatment outside a trial if: it completed FDA Phase 1 under an active IND; a state-registered private review board (ETRB) approved the protocol; it's delivered at a state-licensed clinic; consent exceeds the federal standard & adverse events need to be reported. The key is: sponsors and clinics can charge.
Why this time it's different: The risk-reward ratio is what's broken. Right to Try and Expanded Access don't let sponsors charge, so treating a patient is risk plus expense. Montana is the first state law where sponsors of IND-stage drugs can price in that risk. Trial recruitment today is a price-control system: per-patient cost is around $50-100k, typically has a ceiling upward on what it can pay patients ("undue inducement") and a floor downward (no profit, only at cost in RTT / EA). Montana removes both (I know this will lead to lots of debate, let’s have it.)
So this is not a free for all, the additional liberties come with tough oversight. An ETRB is Montana's version of an IRB: safety review, consent, mandatory outcome reporting, and you can't withhold safety information from patients. That’s the truth-funding mechanism.
What companies can do now: If you have a Phase 1 asset stuck in the Valley of Death: treat patients, negotiate payment, get real-world data, use it to sharpen your Phase 2/3 design.
Disclosure: my company formed the first ETRB. The model is review fees, like an IRB; no equity in applicants, no payment by outcome; COI policy and board bios public; decision letters published with applicant consent; annual outcome report required.
Objections:
- Someone gets hurt? Same as trials and ordinary care: US legal system, legal recourse.
- FDA shuts it down? They haven't said they won't, but historically FDA goes after grey-market clinics, not state laws; we're asking for safe harbor, but some companies aren't waiting.
- Snake oil? Bad actors want to fly under the radar, and Montana makes that hard.
What's needed: Biotechs with Phase 1+ assets willing to move before full FDA assurance, to build the evidence that gets the agency on board - the point is not to skip FDA, but to reduce the cost of data. And ex-FDA reviewers, IND operators, IRB members telling us where this breaks.
Wouldn't you be asking the physicians to risk their licenses to administer these drugs? The state can't waive the Food, Drug, and Cosmetics act, so a physician doing so is breaking federal law unless they get a single-patient IND or EUE. I guess if the experimental drug is manufactured in the state, maybe you could claim the FDCA doesn't apply, but... that's a big risk.
I think what you're describing is a risk to the sponsor/biotech, not the physician. It is not a clear-cut question though for the sponsor, because US states regulate medical practice. Federal jurisdiction applies when there is interstate commerce, and that risk exposure depends largely e.g. on how you do manufacturing and past FDA enforcement history. Also there are options where some of the activities you need to do you can do through federal right-to-try. So it depends on what you're trying to do but is not "you can't use it" by default.
In what way does the Montana law make snake oil salesmanship hard? Why can't a bad actor just repeatedly file INDs, go through Phase 1 (soon will be close to trivial given AI-enabled drug discovery/design), then sell to unsuspecting consumers as a panacea, then rinse and repeat?
Well that'll be a pretty sophisticated scheme, requiring $5-10m funding per phase-1 trial. I suppose that's possible but it would be a highly legible scheme.
Also what would be the bad outcomes here? If those drugs end up not being safe (that is prevented by the requirement to not withhold safety data), or being effective?
If effectiveness is what you're thinking of, keep in mind things like off-label are already allowed, so even in the current system you have drugs that aren't proven effective for what they're used and we don't call the physicians that prescribe off-label bad actors necessarily.
Also what would be the bad outcomes here? If those drugs end up not being safe (that is prevented by the requirement to not withhold safety data), or being effective?
Barring a time machine, safety data reporting is gonna lag at least some of the bad outcomes.
Maybe, but if it's GRAS and supplements/non-drug interventions, can't you do it anyway? This law is addressed at products that are regulated as drugs, biologics and medical devices
Thanks for posting - have been following from afar and very interested in this area. Sorry for the naive questions, I am a software guy new to biotech.
- How have things looked since passage? Has there been a lot of interest from companies and patients or is demand the bottleneck? Not that many people in Montana...
- What sort of new business models does this open up? e.g. Roivant for abandoned phase 1 assets?
- Does this lower the barrier for treating new indications, e.g. age related conditions like sarcopenia?
- Strong demand from biotechs (first approval decision made and public, Parley Neurotech), we're talking several dozens with $5-300m in funding each
- Clinics a bit more lagging, because licensing takes up to 90 days; in a few weeks we hopefully see the first clinic
- Business models: I'd personally be very excited about open-sourcing phase-1 assets to encourage further development to better drugs by more people
- Yes, this was an explicit hope from the geroscience community to address gaps e.g. in frailty, age-induces diseases with multiple possible endpoints
- No explicit rules on telehealth, but administration needs to be in Montana under a brick-and-mortar clinic; telehealth probably possible within those limits
Alex Tabarrok called it "the most important regulatory innovation in drug approval in my lifetime" (https://marginalrevolution.com/marginalrevolution/2026/06/mo...). Was posted here but died in /new (https://news.ycombinator.com/item?id=48559525). The mods suggested this post.
I contributed ideas to the law and am now implementing it through my company. I invested in biotech for years and watched companies struggle. I built the biotech ecosystem in Prospera as an alternative, concluded it was too early, and now think Montana is the best place to prove this.
Why this exists: When FDA approves a bad drug, heads roll. When it delays a good one, the deaths are statistical and nobody gets blamed ("invisible graveyard"). So the incentive is overcaution, which is why the cost per approved drug has roughly doubled every 9 years for decades ("Eroom's Law"). Founders are in the "Valley of Death" around Phase 1: grants are no longer available, and commercial money wants assurance the drug will pass the next trial. Only ~10% of post-Phase 1 drugs get approved, but 68% of failed trials don’t stop because they found lack of safety or efficacy but commercial reasons (Williams et al., PLOS ONE 2015). Federal Right to Try and Expanded Access haven't fixed this. Federal reform is super-hard.
What Montana allows: A physician can give an experimental treatment outside a trial if: it completed FDA Phase 1 under an active IND; a state-registered private review board (ETRB) approved the protocol; it's delivered at a state-licensed clinic; consent exceeds the federal standard & adverse events need to be reported. The key is: sponsors and clinics can charge.
Why this time it's different: The risk-reward ratio is what's broken. Right to Try and Expanded Access don't let sponsors charge, so treating a patient is risk plus expense. Montana is the first state law where sponsors of IND-stage drugs can price in that risk. Trial recruitment today is a price-control system: per-patient cost is around $50-100k, typically has a ceiling upward on what it can pay patients ("undue inducement") and a floor downward (no profit, only at cost in RTT / EA). Montana removes both (I know this will lead to lots of debate, let’s have it.)
So this is not a free for all, the additional liberties come with tough oversight. An ETRB is Montana's version of an IRB: safety review, consent, mandatory outcome reporting, and you can't withhold safety information from patients. That’s the truth-funding mechanism.
What companies can do now: If you have a Phase 1 asset stuck in the Valley of Death: treat patients, negotiate payment, get real-world data, use it to sharpen your Phase 2/3 design.
Disclosure: my company formed the first ETRB. The model is review fees, like an IRB; no equity in applicants, no payment by outcome; COI policy and board bios public; decision letters published with applicant consent; annual outcome report required.
Objections:
- Someone gets hurt? Same as trials and ordinary care: US legal system, legal recourse.
- FDA shuts it down? They haven't said they won't, but historically FDA goes after grey-market clinics, not state laws; we're asking for safe harbor, but some companies aren't waiting.
- Snake oil? Bad actors want to fly under the radar, and Montana makes that hard.
What's needed: Biotechs with Phase 1+ assets willing to move before full FDA assurance, to build the evidence that gets the agency on board - the point is not to skip FDA, but to reduce the cost of data. And ex-FDA reviewers, IND operators, IRB members telling us where this breaks.
Happy to answer anything.
Wouldn't you be asking the physicians to risk their licenses to administer these drugs? The state can't waive the Food, Drug, and Cosmetics act, so a physician doing so is breaking federal law unless they get a single-patient IND or EUE. I guess if the experimental drug is manufactured in the state, maybe you could claim the FDCA doesn't apply, but... that's a big risk.
Super substantive comment that should definitely not be `dead`. Vouched. Curious for OP's answer.
I think what you're describing is a risk to the sponsor/biotech, not the physician. It is not a clear-cut question though for the sponsor, because US states regulate medical practice. Federal jurisdiction applies when there is interstate commerce, and that risk exposure depends largely e.g. on how you do manufacturing and past FDA enforcement history. Also there are options where some of the activities you need to do you can do through federal right-to-try. So it depends on what you're trying to do but is not "you can't use it" by default.
(Not legal advise.)
In what way does the Montana law make snake oil salesmanship hard? Why can't a bad actor just repeatedly file INDs, go through Phase 1 (soon will be close to trivial given AI-enabled drug discovery/design), then sell to unsuspecting consumers as a panacea, then rinse and repeat?
Well that'll be a pretty sophisticated scheme, requiring $5-10m funding per phase-1 trial. I suppose that's possible but it would be a highly legible scheme.
Also what would be the bad outcomes here? If those drugs end up not being safe (that is prevented by the requirement to not withhold safety data), or being effective?
If effectiveness is what you're thinking of, keep in mind things like off-label are already allowed, so even in the current system you have drugs that aren't proven effective for what they're used and we don't call the physicians that prescribe off-label bad actors necessarily.
Barring a time machine, safety data reporting is gonna lag at least some of the bad outcomes.
That is the same with all post-market monitoring for drugs. And maybe we can do better because more nimble/startup approach in a small state
Isn't this pre-market, though?
Relative to the federal approval it's pre-market. In Montana, if your treatment is approved by a review board it's in market
Very interesting. I work in Parkinson’s space so I am familiar with the problem!
Does this also work for GRAS so things like supplements or other non-drug interventions can be tried in the new model?
Maybe, but if it's GRAS and supplements/non-drug interventions, can't you do it anyway? This law is addressed at products that are regulated as drugs, biologics and medical devices
Thanks for posting - have been following from afar and very interested in this area. Sorry for the naive questions, I am a software guy new to biotech.
- How have things looked since passage? Has there been a lot of interest from companies and patients or is demand the bottleneck? Not that many people in Montana...
- What sort of new business models does this open up? e.g. Roivant for abandoned phase 1 assets?
- Does this lower the barrier for treating new indications, e.g. age related conditions like sarcopenia?
- Any particular rules on telehealth?
- Strong demand from biotechs (first approval decision made and public, Parley Neurotech), we're talking several dozens with $5-300m in funding each
- Clinics a bit more lagging, because licensing takes up to 90 days; in a few weeks we hopefully see the first clinic
- Business models: I'd personally be very excited about open-sourcing phase-1 assets to encourage further development to better drugs by more people
- Yes, this was an explicit hope from the geroscience community to address gaps e.g. in frailty, age-induces diseases with multiple possible endpoints
- No explicit rules on telehealth, but administration needs to be in Montana under a brick-and-mortar clinic; telehealth probably possible within those limits