Coronavirus Relief Bill Includes OTC Drug User Fee Program

Regulatory NewsRegulatory News | 26 March 2020 |  By 

A wide-ranging $2 trillion coronavirus emergency relief bill is expected to become law tomorrow and included in it are provisions not only related to drug and medical device shortages and COVID-19 testing, but also a new user fee system for over-the-counter (OTC) drugs.

Overall, the bill is meant to provide relief to the struggling economy and to help government agencies and health facilities as more than 70,000 in the US now have COVID-19 and as the rate of new infections and death increases daily. The House is expected to pass the bill on Friday and President Donald Trump is expected to sign it soon afterwards.

On the supply chain provisions, the bill would require drug manufacturers to submit more information when there is an interruption in supply, including information about active pharmaceutical ingredients (APIs) and when APIs are the cause of the interruption. It also requires manufacturers to maintain contingency plans to ensure a back-up supply of products and to provide information about drug volume. Last month, FDA announced the first drug shortage related to COVID-19, but did not disclose what specific drug is in shortage.

On the device shortage side, which has been controversial as device manufacturers are not currently required to report shortages, the bill clarifies that during a public health emergency, a device manufacturer is required to submit information about a shortage or device component shortage upon request of the US Food and Drug Administration (FDA).

The National Academies is also called on to study the manufacturing supply chain of drugs and medical devices and to provide Congress with recommendations to strengthen the US manufacturing supply chain.

In addition, the bill clarifies that all testing for COVID-19 is to be covered by private insurance plans without cost sharing, including those tests without an emergency use authorization by FDA. For COVID-19 testing that is covered with no cost to patients, the bill requires an insurer to pay either the rate specified in a contract between the provider and the insurer or, if there is no contract, a cash price posted by the provider.

But the American Clinical Laboratory Association said in a statement: "For the third time, Congress has failed to provide the necessary funds to support ‘free testing’ for all Americans. Our members remain in an untenable situation, absorbing growing, uncompensated costs for testing specimens with no assurance that they will be appropriately or fairly reimbursed for all the tests they are performing."

The bill also includes provisions to boost the economy, as well as $1.32 billion in supplemental funding to community health centers for testing and treating patients for COVID-19.

OTC User Fees

With a surprising and unrelated addition, the bill also would create an OTC drug user fee system and allow for exclusivity for certain OTC drugs.

Similar to a bill passed by the Senate last December, the OTC user fee provisions would ensure FDA can approve OTC medicines without going through a full notice and comment rulemaking. The bill also incentivizes companies to create more innovative OTC products by providing 18 months of market exclusivity to reward a return on investment for new OTC drugs. FDA previously said the OTC reforms were a top priority for the agency.

The bill also requires an annual update to Congress regarding FDA’s progress in evaluating certain pediatric indications for certain cough and cold monograph drugs for children under the age of 6.

Liz Richardson, project director of Pew’s Health Care Products program, told Focus via email: “We’re grateful that lawmakers approved these crucial improvements to FDA’s oversight of medications that hundreds of millions of Americans use every year. This bipartisan bill sets us on a path to a modern, streamlined regulatory system that will advance safety and innovation in the over-the-counter drug market.”


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