The United States Food and Drug Administration (FDA) has announced that it will start to gather information on creating a new user fee program for nonprescription, over-the-counter (OTC) drugs. The user fee program would provide funding to supplement congressional non-user-fee appropriations, and would support timely and efficient FDA review of the efficacy and safety of ingredients included in or proposed for inclusion in a monograph.
A monograph is a kind of “recipe book,” covering the acceptable ingredients, doses, formulations, and labeling for OTC drugs. Sponsors of OTC drugs that rely on monographs are not required to seek FDA approval prior to marketing a product under a monograph. According to the FDA, “the OTC monograph process is ingredient-based, as opposed to product-based, and is done through a multi-step public rulemaking process. The monograph allows industry to market a drug product that contains a monograph ingredient as long as the manufacturer complies with all applicable regulations, including the conditions of the monograph.”
However, lately, due to a lack of resources, finalization of OTC monographs has been slow in many therapeutic areas, with the result that there are OTC drugs currently on the market with still-pending monographs and for which the FDA has not made the final determination of safety and effectiveness.
The FDA currently has eighteen full-time employees that are devoted to overseeing the OTC market, which is typically the same number of employees it takes to review one novel prescription drug application.
The FDA estimates that at the current funding level, it would take multiple decades to review and finalize the spectrum of drug monographs that are currently in non-final status. Because the FDA prioritizes activities by public health need, it is likely that, in the absence of additional funding, most of the FDA’s monograph review resources would need to go toward addressing urgent safety issues, with definitive action on the general safety and effectiveness of non-final monograph drugs and innovation review occurring only as strained resources permit.
On June 10, 2016, the FDA held a public meeting to gather stakeholder input on the development of the new user fee program for OTC drugs. The Agency sought input on (1) what types of user fees might be appropriate for a potential monograph user-fee program and (2) what types of performance goals might be important to consider from a public health and sponsor perspective? What parameters could be measured to gauge the success of a user-fee program?
Much of the meeting focused on background information on what a user fee program is and why it may or may not be necessary from economic and public health perspectives. Attendees of the public meeting heard from various FDA officials, including a panel on consumer perspectives, health care professional perspectives, industry perspectives, and scientific community perspectives.
Details of any specific user fee system were not really discussed at the public meeting, likely in part because the OTC monograph system is unique, the OTC market is a fraction of what the brand name, generic, biosimilar and medical device industries are, and that OTC drug companies may not see expedited FDA reviews of particular products, or financial benefits from a new system.
Dr. Diana Zuckerman of the National Center for Health Research suggested that the user fee program be structured as a sliding scale with product fees based on the amount of resources needed for FDA’s review. Diane McEnroe of Sidley Austin suggested that her clients might favor a system where innovation is prioritized and that user fees should not be used to finalize pending monographs.
Jethro Ekuta with Johnson and Johnson offered support for the user fees, but also suggested that the FDA explore other sources of revenue. Cornell Stamoran of the Pharma and Biopharma Outsourcing Association recommended one-time licensing fees and small annual product fees for the monographs to be maintained, but no facility fees for the manufacturers. The CFO of Humco, Steven Woolf, however, recognized that the economic impact of a user fee system for OTC products will eventually be passed down to the consumer and such a concern should be at the top of their minds.
The Consumer Healthcare Products Association expressed cautious optimism on the impact OTC monograph user fees may have on OTC innovation. to Barbara Kochanowski, the Vice President of Regulatory and Scientific Affairs,
Unlike other drugs subject to user fees, nonprescription drugs under the Monograph system are not subject to FDA approval prior to marketing. Many of these ingredients have been marketed for more than 40 years, with a long history of safe use. There is no backlog of applications. Therefore, we must define value differently than industries subject to FDA approval prior to marketing.
The FDA also put together a Frequently Asked Questions document on monograph user fees, which can be found here.
Before the FDA, companies can make claims about a product without evidence that it was safe or even that worked. This made it extremely vulnerable to consumers.