Last week, FDA announced the rates for over-the-counter (OTC) monograph drug facility fees for fiscal year (FY) 2024 with a noticeable 31% marked rate increase from FY 2023 rates: FY 2024 rates include $34,166 for a Monograph Drug Facility (MDF), and $22,777 for a Contract Manufacturing Organization (CMO). As a reminder, OTC monograph drug facility fees for FY 2024 are due on Monday June 3, 2024.
While regulations reforming and modernizing the regulation of OTC monograph drugs have been in effect for a few years now, there is still some confusion as to what the new provisions are and how businesses should comply.
We’ll briefly look back here on the background of the OTC Monograph Drug User Fee Program and recommendations for compliance.
Understanding the OTC Monograph Drug User Fee Program
FDA plays a crucial role in ensuring the safety and efficacy of OTC medications consumed by millions of Americans daily. To streamline the regulatory process and expedite the approval of OTC monograph drugs, the FDA introduced the OTC Monograph Drug User Fee Program. This program, established under the Over-the-Counter Monograph Drug User Fee Amendments (OMUFA) and the Coronavirus Aid, Relief and Economic Security Act (or the CARES Act, passed March 27, 2020), provides funding for the FDA to review and regulate OTC drugs efficiently.
The OTC Monograph Drug User Fee Program was enacted as part of the FDA Reauthorization Act of 2017, aiming to enhance the FDA’s ability to oversee OTC monograph drug products. It operates similarly to the Prescription Drug User Fee Act (PDUFA) and the Generic Drug User Fee Amendments (GDUFA), which provide resources for the FDA to review prescription and generic drugs, respectively.
Under the OTC Monograph Drug User Fee Program, manufacturers and distributors of OTC monograph drugs are required to pay user fees to the FDA. These fees help finance the agency’s activities related to the regulation, review, and approval of OTC monograph drugs. By providing additional resources, the program aims to expedite the approval process, reduce backlogs, and ensure the safety and effectiveness of OTC medications available to consumers.
Preparing for Compliance
Businesses involved in the manufacturing, distribution, or marketing of OTC monograph drugs should be aware of their obligations under the OTC Monograph Drug User Fee Program. The Agency assesses the facility fee for qualifying persons who own an OTC monograph drug facility, including contract manufacturing organization facilities.
What is an OTC monograph drug facility?
Under Section 744L of the Federal Food, Drug & Cosmetic Act (FDCA), an OTC monograph drug facility is generally defined as a foreign or domestic business or other entity that is:
- under one management, either direct or indirect, and at one geographic location or address engaged in manufacturing or processing the finished dosage form of an OTC monograph drug;
- includes a finished dosage form manufacturer facility in a contractual relationship with the sponsor of 1+ OTC monograph dugs to manufacture or process such drugs; and
- does not include a business or other entity whose only manufacturing or processing activities are one or more of the following: production of clinical research supplies; testing; or placement of outer packaging on packages containing multiple products, e.g. for creating multipacks, when each monographed drug contained within the overpackaging is already in a final packaged form prior to placement in the outer overpackaging.
What is an OTC monograph drug contract manufacturing organization?
As provided in Section 744L of the FDCA, a CMO facility is defined as an OTC monograph drug facility where neither the owner of such manufacturing facility not any affiliate of such owner or facility sells the OTC monograph drug produced at such facility directly to wholesalers, retailers or consumers in the U.S.
To comply with the program requirements, companies must:
- Determine Fee Obligations: Identify whether your products are subject to user fees based on their classification as OTC monograph drugs. Note that facilities that only manufacture the active pharmaceutical ingredient (or API) of an OTC monograph drug, and which do not meet the definition of an OTC monograph drug facility as outlined above, are not required to comply with the OMUFA facility fees.
- Register with FDA: Manufacturers and distributors of OTC monograph drugs must register their facilities with the FDA and provide accurate product and establishment information.
- Submit User Fees: Ensure timely payment of user fees as required by the FDA. Fees are typically assessed annually and vary based on factors such as the size of the business and the number of covered products.
- Maintain Compliance: Adhere to FDA regulations and guidelines governing the manufacturing, labeling, and marketing of OTC monograph drugs to avoid penalties or enforcement actions.
For companies that received a fee notice but believe they should not be charged an OMUFA facility fee for FY 2024, please contact us for further assistance.
Stay Informed
As the FDA works to implement the OTC Monograph Drug User Fee Program, businesses should be aware of FDA’s fee schedule and budget estimates for the following fiscal year to understand their financial obligations and budget accordingly. The new fees applicable for fiscal year 2024 have been determined based on the FDA’s cost estimates for conducting OTC monograph drug activities and may vary depending on factors such as inflation and program enhancements.
By staying informed and proactive, companies can ensure compliance with the OTC Monograph Drug User Fee Program and contribute to the timely review and approval of OTC medications for the benefit of consumers while mitigating regulatory enforcement.
For more information on OMUFA facility fees and FDA OTC drug compliance or enforcement matters, please contact us at info@garg-law.com.
