The Wait is Over: FDA Publishes Fiscal Year 2021 User Fees for the Over-the-Counter Monograph Drug User Fee Program

Footnotes for this article are available at the end of this page.

With only a few days left in 2020, a year that has been mostly focused on the Food and Drug Administration’s (FDA) Coronavirus pandemic response, the agency has taken another step to further implement the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that modernized the Over-the-Counter (OTC) Drug Review.  On December 29, 2020, the FDA published a long-awaited Federal Register notice announcing the fee rates under the OTC Monograph user fee program for fiscal year 2021.¹

As discussed in previous bulletins (here, here, and here), the CARES Act, among other things, amended the Federal Food, Drug, and Cosmetic Act (FD&C Act) to allow FDA to assess and collect user fees from manufacturers of OTC monograph drugs and submitters of OTC monograph order requests (OMORs).²  The fees are “to support FDA’s OTC monograph drug activities . . . . and inspection of facilities associated with such products.”³  FDA refers to the OTC Monograph Drug User Fee Program as “OMUFA.”

Facility Fees

The agency will assess and collect facility fees for the following types of facilities:

1. OTC monograph drug facilities (MDFs), defined as:

A foreign or domestic business or other entity that, in addition to meeting other criteria, is engaged in manufacturing or processing the finished dosage form of an OTC monograph drug (see section 744L(1) of the FD&C Act).⁴

2. Contract manufacturing organizations (CMOs), defined as:

An OTC monograph drug facility where neither the owner nor any affiliate sells the OTC monograph drug product at such facility directly to wholesalers, retailers, or consumers in the United States (see section 744L(2) of the FD&C Act).⁵

The following types of facilities are not required to pay the facility fees:

• Facilities that only manufacture the active pharmaceutical (or API) of an OTC monograph drug;
• A facility whose manufacturing or processing activities include one or more of the following:
  • Production of clinical research supplies;
  • Testing; or
  • Placement of outer packaging on packages containing multiple products, for such purposes as creating multipacks, when each monograph drug product contained within the overpackaging is already in a final packaged form prior to placement in the outer overpackaging (see section 744L(10)(A)(iii) of the FD&C Act).⁶

In addition, certain OTC monograph drug facilities are exempt from facilities fees.  Under the CARES Act, a facility fee will not be assessed if the identified OTC monograph drug facility:

• has ceased all activities related to OTC monograph drugs prior to December 31 of the year immediately preceding the applicable fiscal year; and
• has updated its eDRLS registration to reflect that change.⁷

As explained by the agency, because December of FY 2020 (i.e., the year prior to the applicable fiscal year) was really December 2019, a facility fee will not be assessed “with respect to an OTC monograph drug facility that, prior to December 31, 2019, had ceased all activities related to OTC monograph drugs and updated its eDRLS registration to that effect.”⁸

For FY 2021, the OMUFA facility fees are as follows:

• MDF Facility Fee – $14,060
• CMO Facility Fee – $9,373

The new fee rates are effective from October 1, 2020, through September 30, 2021, for FY 2021.  The fees may be adjusted for inflation for FY 2022.

Payment is due within 45 days of the publication date of the Federal Register notice or around February 12, 2021.  In order to pay the fees, MDFs and CMOs must create an OTC Monograph User Fee Cover Sheet.  The cover sheet is available here.  Details on how to pay the fee after creating the cover sheet are found in the Federal Register notice.

OMOR Fees

FDA will also be collecting fees for the submissions of an OMOR, which is a request for an administrative order submitted to the agency under section 505G(b)(5) of the FD&C Act.   There are two levels of OMOR fees, based on whether the OMOR at issue is a Tier 1 or Tier 2 OMOR.⁹

The OMOR fees for FY 2021 are as follows:

• Tier 1 OMOR fees – $ 500,000
• Tier 2 OMOR fees – $ 100,000

An OMOR fee is generally assessed to each person that submits an OMOR to the agency and is due on the date of the submission of the OMOR.^[0  An OMOR fee will not be assessed if:

FDA finds that the OMOR seeks to change the drug facts labeling of an OTC monograph drug in a way that would add to or strengthen: (1) a contraindication, warning, or precaution; (2) a statement about risk associated with misuse or abuse; or (3) an instruction about dosage and administration that is intended to increase the safe use of the OTC monograph drug.¹¹

AGG Observations

• The Federal Register notice does not specify when companies will be notified of any fees that are due; however, it provides instructions for companies to submit payment to the agency. Therefore, companies should not wait to be notified by FDA before submitting payment to make sure that the fees are paid within 45 days (or on or before February 12, 2021).
• Companies will be required to pay a fee based on whether they are currently registered as an MDF or CMO. While fees are based on the company’s registration status as of December 2019 for FY 2021, companies should review their registrations before December 31, 2020, to make sure that the correct fees are assessed for FY 2022.
• Under OMUFA, the annual base revenue amount for facility fees may be adjusted for inflation for FY 2022 and each subsequent FY. Companies should expect to pay higher fees for both OMORs and facility fees in the next few years.  Given that FDA has not established the new Monograph Drug Review process yet, it is unclear whether any companies will be able to submit OMORs at the current fee amounts.
• The Federal Register notice does not address a reduced fee for companies that may qualify as a small business.

 

[1] See Federal Register notice titled, “Fee Rates Under the Over-the-Counter Monograph User Fee Program for Fiscal Year 2021,” 85 Fed. Reg. 85,646 (December 29, 2020) available here.

[2] See Section 744M of the FD&C Act (21 U.S.C. § 379j-72).

[3] See 85 Fed. Reg. 85,646.

[4] Id.

[5] Id.

[6] Id. at 85,647.

[7] Id.

[8] Id.

[9] The term “Tier 1 OTC monograph order request” is defined under the statute as any OTC monograph order request not determined to be a Tier 2 OTC monograph order request.  The term “Tier 2 OTC monograph order request” is defined as an OTC monograph request for “(i) the reordering of existing information in the drug facts label of an OTC monograph drug; (ii) the addition of information to the other information section of the drug facts label . . . . (iii) modification to the directions for use section of the drug facts label of an OTC monograph drug, . . . .(iv) the standardization of the concentration or dose of a specific finalized ingredient without a particular finalized monograph; (v) a change to ingredient nomenclature to align with nomenclature of a standards-setting organization; or (vi) addition of an interchangeable term.”  See sections 744L(8) and 744L(9) of the FD&C Act.

[10] See 85 Fed. Reg. 85,647.

[11] Id.