UPDATE 03/26/21:
On March 26, 2021, the FDA republished the OTC Monograph Drug user fee rates for the fiscal year 2021 under the OTC Monograph Drug User Fee Program (OMUFA). While most OTC facilities will now be required to pay a significant fee to support the FDA’s OTC monograph reform efforts, certain hand sanitizer facilities are still exempt. These new fees are due 45 days from the date of publication. See our recent blog for more information: OTC Drug User Fees Officially Republished for FY 2021
UPDATE 01/12/21:
FDA issued a statement on January 12, 2021, about new OTC drug user fees. The statement reaffirms that they will eventually be enacted (rates to be announced) and that companies that came on board as a drug manufacturer only in response to COVID will be exempt. This was originally missing from the original language. https://public-inspection.federalregister.gov/2021-00237.pdf?utm_medium=email&utm_source=govdelivery
UPDATE 01/04/21: HHS Revokes New OTC User Fees.
HHS directed FDA to cease enforcement of the OTC user fees announced late last week. They are withdrawing FDA’s December 29, 2020 Federal Register Notice entitled “Fee Rates Under the Over-the-Counter Monograph User Fee Program for Fiscal Year 2021.”
Original Post: December 30, 2019
On December 29, 2020, FDA published fee rates for the over-the-counter (OTC) monograph drug user fee program. As we’ve reported, a new OTC Monograph User Fee Program (OMUFA) was enacted in March of 2020 as part of the CARES Act, which authorizes FDA to assess and collect annual user fees for OTC drugs.
Fiscal Year 2021 Fees
FDA has set two types of OTC monograph drug facility fees, depending on the type of entity.
- A Monograph Drug Facility (MDF) is an OTC monograph drug facility that “is a foreign or domestic business or other entity that, in addition to meeting other criteria, is engaged in manufacturing or processing the finished dosage form of an OTC monograph drug.” The fee for an MDF is $14,060 for Fiscal Year 2021.
- A Contract Manufacturing Organization (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.” The fee for a CMO is $9,373 for Fiscal Year 2021.
These fees are due to FDA 45 days after today’s Federal Register publication date, or February 12, 2021. In subsequent years FDA may adjust the fees for inflation, and future fees may also differ based on the number of OTC MDFs and CMOs participating in the market and based on certain statutory provisions in the CARES Act that reduce the total OTC drug user fees collected by FDA each year through fiscal year 2025. Starting with fiscal year 2022 (which begins October 1, 2021), these facility fees will be due when the facility submits its annual registration between October 1 and December 31.
These fees do not apply to OTC drug active pharmaceutical ingredient (API) manufacturers and manufacturers of clinical research supplies, testing, or multipack packaging of products already in their final packaged form. Additionally, facilities that have stopped operations prior to December 31, 2019, will not be assessed a fee.
Impact of These New Fees
Although these fees amounts were largely set by Congress, Attorney Ben England is disappointed in how these fees were assessed and how they are being enforced, “It’s disappointing that Congress and the FDA imposed the highest possible fees in 2021 when there are so many new suppliers entering the hand sanitizer space. COVID shows little intention of receding. These fees could have been introduced gradually. And it is particularly troubling that there are no exceptions for small businesses or businesses that entered the 2020 OTC drug market to accelerate much needed hand sanitizer (as HHS and FDA requested under the EUA). Still, in the absence of any action by Congress or an implementation of enforcement discretion, OTC MDFs and CMOs must pay the fee by the deadline or risk their OTC drugs being deemed misbranded by the FDA, whether imported or domestically produced.”
For new manufacturers who entered the US market during COVID-19 with hand sanitizers and other OTC products, these drug fees represent a significant cost burden. Medical device manufacturers and distributors have long paid annual user fees, with the FY 2021 fees set at $5,546.
What You Should Do Now
If you have registered a facility as an OTC monography drug facility or CMO, then you will need to pay the fee to FDA by the due date. However, certain facilities may have registered as an MDF when they should have registered as a manufacturer of a drug subject to an NDA or of an OTC animal drug product. If you have any questions as to the registration and product listings for your facility, contact us today.
This blog is provided for informational and educational purposes only and does not constitute legal advice, and is not intended to form an attorney-client relationship. Please contact your regular FDAImports representative for additional information.
