OMUFA 2022 features fee spike for some facilities

Certain over-the-counter drug manufacturers will see an almost 20% bump in fees under the FY2022 over-the-counter (OTC) monograph drug user fee program (OMUFA). The US Food and Drug Administration (FDA) aims to rake in almost $24 million under the new fee schedule, after inflation and other adjustments.

On 14 March the FDA released its “Over-the-Counter Monograph Drug User Fee Rates for Fiscal Year 2022.” The fee schedule applies to OTC monograph drugs which are certain nonprescription drugs that don’t have an approved new drug application (NDA).

Under OMUFA, the FDA collects two types of OTC monograph fees. The first are OTC Monograph Order Request (OMOR) fees that are broken down into two tiers depending on the types of drugs the request is for. Those fees are only set to go up 1.4% to account for inflation.

The second type of fees are for monograph drug facilities (MDFs) and contract manufacturing organizations (CMOs) which are set to see a much bigger fee spike (see chart).

Fee Category	FY2021 Fee Rates	FY2022 Fee Rates	Increase
OMOR Tier 1	$500,000	$507,021	1.40%
OMOR Tier 2	$100,000	$101,404	1.40%
MDF Facility Fee	$20,322	$24,178	18.97%
CMO Facility Fee	$13,458	$16,119	19.77%

The FDA estimates it will receive OMUFA fees from 1,118 facilities in FY2022 down from 1,184. It estimates 65% of such facilities will be MDF and 35% will be CMO.

“FDA recognizes that the fiscal year (FY) 2022 facility fee rates are an increase of 19 percent in comparison to the FY 2021 facility fee rates,” the agency said. FDA noted that facility fee rates were calculated according to statutory requirements. That includes factors such as the number of facilities that are liable to pay an OMUFA fee, the ratio of MDF to CMO facilities, and meeting its total target revenue based on inflation and other adjustments.

Industry was expecting maybe a 5%-10% fee increase, but not 20%, a source who works for an OTC drug maker said in an interview with Focus, adding that the larger increase seems to be based on an initial overestimate by FDA of how much revenue the agency could generate through user fees.

“It's not something surprising because I know FDA overestimated the number of facilities and now, they’re trying to compensate for the overestimation,” the industry source said. “Most of us expected this.”

The agency explained the reason for its massive fee increase is due to the target revenue set in statute, 66 fewer fee-liable facilities in FY2022 compared to FY2021, the ratio of MDFs to CMOs, and inflation as well as operating reserve adjustments.

The industry source said while larger OTC drug makers may be able to absorb the cost, the fee schedule may put smaller companies out of business or force them to change their business model. They said smaller OTC makers may initially try passing on the costs to retailers who then pass it on to customers.

The situation might have been different had FDA first discussed the fee hike with industry, to come to a better compromise, according to the source, who added that FDA was under a lot of pressure from Congress to publish the already-late fee schedule.

During the last OMUFA fee schedule, the FDA pulled back the fee schedule and updated it because there was concern the agency was going to unfairly charge makers of hand sanitizers during the COVID-19 pandemic (RELATED: FDA increases OTC monograph facility fees in reissued notice, Regulatory Focus 26 March 2021).

The source said they wouldn’t be surprised if the FDA again decides to pull back the fee schedule after seeing how it affects OTC drug makers in order to come up with more manageable fees.

The FY2022 OMUFA fees are effective between 1 October 2021 and 30 September 2022 however the fees are not due until 1 June 2022.

FDA notice

OMUFA 2022 features fee spike for some facilities

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