UPDATE (1/4/2021): The Department of Health and Human Services has withdrawn FDA’s Federal Register notice establishing the FY2021 OTC Monograph Drug User Fees discussed in this Insight. Read more about the withdrawal here.
Back in March 2020, Congress established the Over-the-Counter (OTC) Monograph Drug user fee program through the CARES Act under which FDA is authorized to assess and collect user fees from qualifying manufacturers of OTC monograph drugs and submitters of OTC monograph order requests (OMORs). Since then, we (along with the OTC drug industry) have been closely monitoring FDA’s notices for the to-be-announced fee rates.
The time has come: FDA has announced the fiscal year 2021 (FY2021) fee rates for OTC monograph drug manufacturing facilities and submission of an OMOR. We provide a brief summary below. To read more on our coverage of the OTC drug provisions of the CARES Act, check out here, here, and here.
OTC Monograph Drug Facility Fees
The below fee rates are effective as of October 1, 2020, and will remain in effect through September 30, 2021. The OTC Monograph Drug Facility fees are due annually and it is expected that FDA will announce the FY2022 facility fee rates later in 2021.
Monograph Drug Facility (MDF) fee – $14,060
A MDF is a foreign or domestic business or entity that is engaged in manufacturing or processing the finished dosage form of an OTC monograph drug. The following facilities are not subject to the MDF fee:
- Facilities that ceased OTC monograph drug activities and updated their registration with FDA reflecting the same prior to December 31, 2019.
- Facilities manufacturing solely the active pharmaceutical ingredient (API) of an OTC monograph drug.
- Facilities that carry out only the following manufacturing or processing activities: (a) production of clinical research supplies, (b) testing, or (c) 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.
Contract Manufacturing Organization (CMO) facility fee – $9,373
A CMO facility is an OTC monograph drug facility where neither the owner nor any affiliate of the owner or facility sells the OTC monograph drug produced at such facility directly to wholesalers, retailers, or consumers in the United States.
Facilities are required to pay the fees within 45 days after the publication date of FDA’s notice. The notice is scheduled to be published on December 29, 2020, so facility fees must be paid by February 12, 2021.
OTC Monograph Order Request (OMOR) Fees
To further refresh our collective memories, the CARES Act also established the OMOR pathway under which requestors may request that FDA determine that any drug or combination, or any change to a condition of use of a currently authorized drug (i.e., a drug that is already considered generally recognized as safe and effective (GRASE)), is a lawful OTC drug.
For FY2021, the fee for an OMOR “Tier 1” request is $500,000 and for an OMOR “Tier 2” request is $100,000. “Tier 2” requests are minor changes (e.g., the modification of directions for use due to changes that do not affect safety or effectiveness, or the reordering of information in the Drug Facts box); “Tier 1” requests are all others. OMOR fees are due on the date of the submission of the OMOR.
Of note, FDA will not assess fees for certain safety changes where the change would add 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.
FDA provides detailed information on how to pay the above fees in its Notice. Please contact us if you need any further information on the OTC Monograph Drug User Fee Program or other related OTC drug reform issues.