Congress Takes First Look at User Fee Program for OTC Drugs

Regulatory NewsRegulatory News | 13 September 2017 |  By 

The House Energy & Commerce committee on Wednesday held its first hearing on a bill to reform the US Food and Drug Administration's (FDA) over-the-counter (OTC) drug monograph process by creating a new user fee program and offering marketing exclusivity for innovations to monograph products.

A bipartisan discuss draft of the bill, developed by Reps. Bob Latta (R-OH), Diana DeGette (D-CO), Brett Guthrie (R-KY), Debbie Dingell (D-MI), Gene Green (D-TX) and Subcommittee on Health Chairman Michael Burgess (R-TX), was released ahead of the hearing.


The OTC monograph program was created in 1972 to allow for the hundreds of thousands of marketed OTC medicines to conform to a monograph rather than undergoing individual review under a new drug application (NDA) to show that they were effective.

Today, FDA says there are more than 300,000 OTC monograph drugs available in the US with some 800 different active ingredients that make $32 billion annual market.

Need for Reform

According to Center for Drug Evaluation and Research Director Janet Woodcock, OTC monograph drugs are used by millions of Americans each day.

"I believe there's more exposure of Americans to these OTC monograph drugs than there is to prescription drugs," she said.

But, compared with FDA's other drug programs, funding for its OTC monograph efforts has remained low at around $8 million annually in recent years. What's more, Woodcock said that much of the program's resources are being dedicated to implementing the Sunscreen Innovation Act and to meet court ordered deadlines for certain monographs.

"We literally have no other resources," Woodcock said, emphasizing that the agency would not be able to manage any new authorities without additional funding.

Under the proposed program, FDA would collect an annual facility fee from OTC manufacturers and one-time fees of $100,000 or $500,000 for requests to change a monograph. The fees for those requests, referred to as OMORs (over-the-counter monograph order requests), would be based on the complexity of the request, though FDA envisions that most requests would be assessed at the higher fee level.

FDA says it expects to collect $22 million in fees in the program's first year, which will increase to $34 million by the fourth year.

Some of the biggest challenges surrounding the agency's existing OTC monograph program stem from its multi-step notice and comment rulemaking process, which can take years—or decades—to work through.

"The rulemaking process that was put in place has become lengthy, burdensome, and there are huge delays—there are 88 monographs that are not finalized," Woodcock said, adding that the program was not designed for innovation as it is geared towards products that already on the market in 1972.

Instead, the bill would give FDA the authority to run the program by issuing administrative orders, rather than through notice and comment rulemaking.

The process would also be opened up to new products and ingredients and would not be limited to pre-1972 ingredients and would allow industry to request for FDA to amend a monograph or submit new types of products to the program.

The bill proposes to incentivize those requests by giving companies whose OMORs lead to a final order from FDA a 24 month period of marketing exclusivity, so long as the request is for an active ingredient not previously marketed under a monograph or is for changes to the conditions of use of a drug that required clinical studies to support.

The bill would also allow for confidential meetings between FDA and companies requesting changes to monographs to discuss potential products before moving to a public process.

Woodcock also said that FDA is currently limited in its ability to respond to new safety issues for products marketed under a monograph.

For example, Woodcock said the agency was unable to require OTC monograph acetaminophen products to add new safety information about potential severe skin reactions to their labels. Instead, FDA issued a safety communication warning about the reactions and provided guidance detailing recommended labeling, which many—but not all—manufacturers voluntarily complied with.

Under the draft bill, Woodcock said that FDA would be able to respond more quickly by issuing interim final orders for safety labeling changes. Those orders, she said, would still be subject to public comment and discussion, but would stand during that time.

And, the bill would give FDA greater control over the types of packaging required for specific types of monograph products, such as unit-dose packages for products meant for children to reduce the risk of overdose.

Currently, FDA has just 30 employees working on the OTC monograph program. Under the proposed user fee program that number would grow by more than 100 new employees over a five year period.

But, despite the increased staff and funding, Woodcock cautioned that the program will not be fully up to speed in the first five years, but rather would require "managed growth" over time to meet its goals.



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