US OTC Monograph Facilty Fees Increase With Pandemic-Inspired Sanitizer Makers Exempted
Source : 'HBW Insight'
Businesses that began making hand sanitizers in response to the COVID-19 pandemic won’t pay US OTC drug monograph program facility fees but firms subject to the requirement will pay $6,000 more than initially was calculated.
The Food and Drug Administration on 25 March published a second notice on rates for its OTC monograph drug user fee (OMUFA) program for fiscal year 2021, the program’s first year, after withdrawing its initial notice published in December.
With fewer firms required to pay OMUFA facility fees, those still subject to the fee will pay more so the total collected still will reach the amount Congress authorized the agency to collect to support its monograph work, nearly $23.3m.
“Due to this change in fee assessment, we acknowledge that firms subject to the OMUFA facility fees will see an increase in the fiscal year 2021 facility fees, compared to fees shown in the withdrawn fee notice. However, by supporting OTC monograph reform efforts, these fees will aid in improving the efficiency, timeliness, and predictability of the review process for OTC monograph drugs,” said Patrizia Cavazzoni, FDA Center for Drug Evaluation and Research acting director, in a same-day announcement.
Acting CDER Director Patrizia Cavazzoni: “We appreciate and understand the concerns raised by these manufacturers."
OMUFA facility fees for firms manufacturing or processing OTC monograph drugs in finished dosage forms were increased from $14,060 in the initial calculation to $20,322 in the updated notice, and for contract manufacturers from $9,373 to $13,458.
Fees also are required for OTC monograph order requests (OMORs), a two-tiered system based on the type of request. Those fee levels were not changed as the total of OMORs that will be submitted in a year is unknown and the fees aren’t factored in calculating the FDA’s annual monograph workload costs.
Tier 1 OMORs require $500,000 fees and are requests to develop monographs for new ingredients or add new medical conditions to existing monographs.
Tier 2 OMORs have $100,000 fees and seek modifications to drug facts labels of monograph drugs, standardization of the concentration or dose of a specified finalized ingredient within a finalized monograph, or a change to ingredient nomenclature, among other asks specified by the law.
The Consumer Healthcare Products Association, which led OTC drug industry discussions with the FDA on OTC monograph program reform, says the fee levels align with the requirements set for the agency to "ensure FDA has the resources it needs to protect and advance public health."
"'The fee arrangement was written carefully, after many years of deliberation, distinguishing between manufacturers and contract manufacturers and allowing these FDA-regulated entities to clarify their standing with the Agency regarding their manufacturing practices and production," CHPA said in a statement.
The FDA is not assessing facility fees on companies that entered the OTC drug market to produce only hand sanitizer products on or after Jan. 27, 2020, during the COVID-19 Public Health Emergency declared by the Department of Health and Human Services.
The FDA in December published a Federal Register notice with its initial OMUFA FY2021 rates for firms registered as manufacturers of OTC drugs available under the agency’s monograph program. ()
However, businesses that responded to the pandemic by making hand sanitizers and no other drugs protested being subjected to OMUFA; members of Congress also questioned the decision.
“We appreciate and understand the concerns raised by these manufacturers, especially the small businesses that stepped up during the COVID-19 pandemic to help meet the increasing demand for alcohol-based hand sanitizers,” Cavazzoni added in the FDA announcement.
The facility fees are due 45 days after publication of the notice planned for the 26 March Federal Register.
The HHS in early January withdrew the initial notice. The department said the 2020 legislation establishing FDA's OTC monograph program reform including a user fee program also included a separate provision that temporarily exempted excise taxes for distilled spirits used for or contained in hand sanitizers produced under the agency’s FDA guidance related to the COVID-19 pandemic. ()
HHS officials said it was unlikely that Congress would exempt those businesses from excise taxes but leave them subject to “tens of thousands of dollars in facility fees from an unfamiliar regulator.”
The monograph legislation, included in the Coronavirus Aid, Relief and Economic Security Act Congress passed in April — Public Law No: 116-136 –granted the FDA authority to make OTC drug monograph changes with administrative orders rather than public notice-and-comment rulemakings; set timelines for agency decisions on industry proposals; and established a process for firms to appeal rejections. ()
The agency also indicated to Congress that it aims to hire 30 full-time equivalent staff in the first year of the overhauled OTC monograph program.
The FDA in March 2020 published temporary guidances on manufacturing or compounding alcohol-based hand sanitizer products, and on manufacturing alcohol for those products, stating it will not enforce certain regulations to combat a shortage of these products during the COVID-19 pandemic.
Some of the distilleries and other businesses that entered the sanitizer market after the FDA eased its production standards were sources of some problems the agency found in the US marketplace. ()
Among the early problems were sanitizer intended for topical use sold in containers resembling liquor bottlers and products containing lower concentrations of alcohol than labeled.
The FDA also has found methanol, rather than ethanol or isopropyl alcohol stated on labels as the active ingredient, in numerous brands of sanitizers made by Mexican firms that began providing the products under the temporary guidance. Microbial contamination also has been found in sanitizers, including products made by a Florida business the FDA identified in a same-day consumer alert (see box).
In response, the FDA updated its guidances on multiple occasions to improve compliance. It clarified that each lot of ethanol or isopropyl alcohol obtained from another source should be tested for methanol. It also added to the temporary guidances another formula for denaturing alcohol in sanitizers.
CHPA acknowledges that additional suppliers of hand sanitizers were needed due to the pandemic and that firms making only those products should be exempted from OMUFA. However, the FDA should consider withdrawing its temporary guidances. The trade groups says it continues "to see hand sanitizers with dangerous ingredients entering the US market from other countries, which both jeopardizes public health and requires additional FDA oversight."
“Now that supplies have stabilized, CHPA will be looking for more equitable solutions moving forward since the law is clear that these products are OTC drugs and therefore should be treated like any other OTC monograph category,” CHPA added in its statement to HBW Insight.
By Malcolm Spicer